Netflix reaffirms Warner Bros Discovery asset deal amid rival bid and regulatory questions

Netflix has reiterated that its plan to acquire key assets from Warner Bros Discovery remains firmly in place, despite a rival takeover attempt and growing scrutiny over regulatory approvals. In a letter sent to employees on Monday, Netflix co-CEOs Greg Peters and Ted Sarandos said the company’s strategy had not changed following recent developments around Warner Bros Discovery.

Earlier this month, Netflix secured shareholder approval from Warner Bros Discovery for a $72 billion equity transaction covering the company’s television, film studio and streaming businesses. The agreement was reached shortly before Paramount, backed by Skydance, launched a hostile bid valuing Warner Bros Discovery at $108.4 billion on an enterprise basis.

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In their message to staff, Peters and Sarandos acknowledged the competing offer but said it was anticipated. They also outlined how the deal would expand Netflix’s business model, particularly in theatrical distribution. Netflix has historically focused on streaming-first releases, but the leadership said Warner Bros’ long-standing presence in cinemas would change that approach.

“Theatrical releases are an important part of Warner Bros’ business and legacy,” the executives wrote, adding that Netflix would enter the theatrical space once the transaction is completed.

The company also addressed concerns that the deal could face intense regulatory examination. Netflix said it remains confident of securing approvals, arguing that the scale of the transaction is necessary to compete in a media landscape increasingly dominated by platforms such as YouTube.

However, legal experts have cautioned that regulators may not accept Netflix’s comparison with YouTube, pointing out differences in content formats, audiences and revenue models. In the letter, Netflix sought to downplay market concentration concerns, noting that its share of U.S. viewership would rise only marginally, from about 8% to 9%, after combining with Warner Bros Discovery, still trailing YouTube and a potential Paramount–Warner Bros Discovery combination.

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Netflix also attempted to reassure employees about job security, saying the transaction would not lead to studio closures, amid wider industry fears over layoffs and the impact of artificial intelligence on production and creative roles. Paramount has made similar assurances, stating it does not plan to reduce content spending and would operate studio units independently if its bid were successful.

The competing offers highlight the accelerating consolidation pressures across the global media and entertainment industry, as traditional studios and streaming platforms seek scale to offset rising production costs, intensifying competition and shifting viewer habits.