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Netflix Bids for Warner Bros Discovery in Potential Streaming Shakeup

Netflix has submitted an offer to acquire Warner Bros Discovery, in a move that could reshape the streaming landscape, according to people familiar with the matter.

The auction for Warner Bros Discovery is entering its final stages, with Netflix's bid joining offers from Paramount Skydance and Comcast. The deal, if successful, would give Netflix ownership of major intellectual property like the Harry Potter and DC Comics franchises.

The potential acquisition comes at a critical juncture for the streaming industry. Earlier this year, Paramount Global and Skydance Media announced an $8 billion merger, underscoring the scale needed to compete. Now, Netflix appears willing to leverage its balance sheet to gain an edge.

According to the sources, Netflix is working to secure tens of billions in financing to fund the all-cash offer. The board of Warner Bros Discovery had previously rejected a $60 billion, $24-per-share bid from Paramount Skydance.

The outcome of the auction could have far-reaching implications. If successful, Netflix would bolster its content library and boost its competitive position against rivals like Disney+ and HBO Max. However, taking on such substantial debt to fund the deal would also add financial pressure on a company that has faced subscriber losses and a plunging stock price this year.

"This would be a transformational acquisition for Netflix, allowing them to double down on franchises and IP that could drive subscriber growth," said Michael Nathanson, a media analyst at MoffettNathanson. "But the price tag would be eye-watering, and Netflix investors will want to see a clear strategic rationale."

Warner Bros Discovery was formed last year through the merger of Discovery Inc. and the former WarnerMedia assets owned by AT&T. The new company has been exploring options to optimize its portfolio, including potential sales of certain divisions.

Representatives for Netflix, Warner Bros Discovery and the other bidders declined to comment on the ongoing auction process.