WHAT began as a routine fact-finding exercise for Netflix ultimately led to one of the largest media takeovers of the past ten years — a US$72 billion (about RM296 billion) agreement to acquire Warner Bros Discovery — in a move that insiders say will reshape the global entertainment landscape.
Reuters reported on Saturday, Netflix confirming yesterday that it had struck a binding deal to purchase Warner Bros Discovery.
While the company had publicly dismissed the notion of buying a major Hollywood studio as recently as October, it entered the fray after Warner Bros Discovery launched a formal auction on 21 October, having already rejected three unsolicited approaches from Paramount’s Skydance.
Interviews with seven advisers and executives reveal for the first time how Netflix’s bid gathered momentum and why the Warner Bros board ultimately favoured it over competing proposals.
Netflix executives initially approached Warner Bros out of curiosity, but soon recognised the strategic potential of acquiring the century-old studio.
Beyond adding its vast library of films and television series — which, according to one person familiar with streaming metrics, can account for up to 80% of viewer engagement — Netflix saw strong complementarities across the company’s core operations, including its theatrical distribution, marketing apparatus and studio infrastructure.
The streaming giant also believed that HBO Max could rapidly accelerate its trajectory by adopting lessons Netflix had refined over years of global streaming leadership, according to a source with knowledge of internal discussions.
Momentum gathered after June, when Warner Bros Discovery announced plans to divide itself into two publicly listed entities: one holding its declining but cash-yielding cable television networks, and the other comprising the Warner Bros studio, HBO and the HBO Max streaming service.
This restructuring prompted Netflix to seriously consider acquisition of the studio and streaming assets, said a person familiar with the process.
Both Netflix and Warner Bros declined to comment when approached.
The competition intensified in the autumn as Netflix went head-to-head with Comcast, parent of NBCUniversal, and Paramount.
Paramount had submitted the first of three rising offers in September, hoping to pre-empt Warner Bros’ planned split, which would diminish its ability to merge traditional television assets and expose the studio to competing bids from deeper-pocketed players like Netflix.
Around this time, JPMorgan, advising Warner Bros Discovery CEO David Zaslav, suggested reversing the order of the proposed corporate separation by divesting the Discovery Global cable networks first. Doing so, advisers believed, would give the company “strategic flexibility”, including the option of selling the studio, streaming service and content divisions outright — assets expected to attract aggressive offers.
Netflix’s internal preparations intensified in parallel. Its executives and advisory team — including Moelis & Company, Wells Fargo and legal advisers Skadden, Arps, Slate, Meagher & Flom — held daily morning calls for two months. Work continued through Thanksgiving week, with multiple calls even on Thanksgiving Day itself, to ensure the company could submit a fully developed bid ahead of the 1 December deadline.
Ultimately, the Warner Bros Discovery board judged Netflix’s proposal to provide more immediate and concrete benefits than Comcast’s, whose bid was seen as offering a longer-horizon financial return.
Concerns about the financing structure of Paramount’s offer, which reportedly valued the company at US$30 per share, also contributed to the board’s decision to reject it, according to sources.
The result was one of the most consequential shifts in modern media history — a strategic pivot that could redefine the competitive balance in Hollywood for years to come. - December 6, 2025
