Netflix has changed its massive offer for Warner Bros. Discovery to an entirely cash deal. This move is a direct effort to win over Warner shareholders quickly and stop a rival takeover attempt from Paramount Skydance. The new all-cash agreement keeps the price at $27.75 per share.
The change, announced on January 20, 2026, aims to give Warner’s stockholders more financial certainty and could lead to a vote on the deal as soon as April 2026. The original deal, made in December 2025, was a mix of cash and Netflix stock. This switch to all cash removes worries about the value changing if Netflix’s stock price goes up or down. Both companies say the change simplifies the process and speeds up the timeline.
The entertainment world is watching closely. The outcome will decide who controls legendary franchises like Harry Potter, Game of Thrones, and the DC Universe (Superman, Batman), and could change what you see on your TV for years to come.
The Financial Terms and Faster Timeline
The core of the deal remains the same. Netflix is offering to pay $27.75 for each share of Warner Bros. Discovery stock to buy its studio and streaming businesses. This values that part of the company at about $72 billion. When including the debt Netflix will take on, the total “enterprise value” reaches approximately $82.7 billion.
The key change is that this money will now be all cash. Netflix stated it will pay using cash it has on hand, available credit, and committed financing from banks. The company’s leadership says its strong cash flow allows it to make this move while keeping a healthy balance sheet.
โOur revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty,โ said Ted Sarandos, co-CEO of Netflix.
To make the vote happen faster, Warner Bros. Discovery filed a preliminary proxy statement with financial regulators on January 20. This sets the stage for shareholders to make their decision in the coming months.
Competing Against Paramount’s Hostile Takeover
This strategic shift by Netflix is a direct counter to a persistent campaign by Paramount Skydance. While Netflix only wants the movie studios and streaming services (like HBO Max), Paramount wants to buy all of Warner Bros. Discovery, including cable channels like CNN, TNT, and Discovery Channel.
Paramount has been making an “all-cash, hostile bid” directly to Warner shareholders, offering $30 per share. A hostile bid means they are trying to buy the company even though Warner’s board of directors does not support the offer. Paramount’s total offer is worth about $108.4 billion.
The Warner Bros. Discovery board has rejected Paramount’s offer multiple times, calling it “inadequate” and risky. They unanimously support the deal with Netflix. To push its case, Paramount has sued Warner Bros. to get more financial details about the Netflix deal and has promised a “proxy fight”. This means they will try to elect their own directors to Warner’s board to vote against the Netflix agreement.
What Netflix Would Get in the Deal
If the deal goes through, Netflix would gain control of some of the most valuable properties in entertainment history. This includes:
- The Warner Bros. film and television studios, famous for the Harry Potter films, the DC superhero movies, and classics like The Wizard of Oz.
- The HBO and HBO Max streaming services, home to award-winning series like Game of Thrones, Succession, and The White Lotus.
- A massive library of beloved TV shows, including Friends, The Big Bang Theory, and The Sopranos.
Netflix has said it plans to maintain Warner Bros.’ current operations, including continuing to release movies in theaters. The goal is to combine these iconic stories with Netflix’s own hits like Stranger Things, Wednesday, and Bridgerton to create a huge entertainment offering.
โTodayโs revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world,โ said David Zaslav, President and CEO of Warner Bros. Discovery.
The Upcoming Spinoff and Shareholder Choice
A major part of this complex situation is a planned corporate separation. Before any sale to Netflix happens, Warner Bros. Discovery will split into two separate, publicly traded companies.
- Warner Bros.: This company would contain the film studios, TV production, and the HBO Max streaming service. This is the part Netflix wants to buy.
- Discovery Global: This new company would hold the cable and linear TV networks, including CNN, Discovery Channel, HGTV, TNT Sports, and the streaming service Discovery+.
This separation is expected to happen in the next six to nine months. For Warner shareholders, this means they would own shares in both the new “Warner Bros.” company (which would then be sold to Netflix for cash) and shares in the new “Discovery Global” company. Netflix is not buying the cable networks.
Paramount has criticized this plan, suggesting the cable networks have much less value than Warner’s board believes. The value of these future Discovery Global shares is a central point in the debate over which offerโNetflix’s or Paramount’sโis actually better for shareholders.
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Regulatory Hurdles and Industry Concerns
Any deal of this size faces close examination by government regulators. Both Netflix and Warner Bros. Discovery have formally submitted their applications for antitrust review in the United States and are also talking with competition authorities in Europe.
The companies have said they expect the process to take 12 to 18 months from when they first agreed in December 2025. Paramount has argued that its deal might face easier regulatory approval than a Netflix-Warner combination.
Meanwhile, many in the film and television industry are worried. Trade groups have warned that such a large consolidation could lead to job losses, less diversity in the stories being told, and more pressure on traditional movie theaters. In response, Netflix’s Ted Sarandos has said the merger will “drive job creation and long-term industry growth” and has committed to keeping a theatrical window for Warner Bros. films.
The financial penalties for backing out are huge. If Warner Bros. Discovery accepts Paramount’s offer instead, it would have to pay Netflix a $2.8 billion “breakup fee”. If regulators block the Netflix deal, Netflix would have to pay Warner Bros. Discovery $5.8 billion.
In its recent quarterly earnings report, Netflix announced it now has over 325 million global subscribers. The company continues to frame the Warner Bros. acquisition as a way to strengthen its content library and invest more in production.
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