Netflix has reportedly retained Moelis & Co. to evaluate a potential acquisition bid for Warner Bros. Discovery’s studio and streaming business, according to Reuters. The streamer has been granted access to WBD’s financial data room, a signal that this exploration has moved well beyond casual interest.
Netflix’s co-CEO Big Ted Sarandos, recently told investors last week that the company remains “more builders than buyers,” but added that it “evaluates acquisitions based on the size of the opportunity and whether it would strengthen the company’s entertainment offerings.”
The distinction matters. Netflix is not interested in WBD’s full portfolio, specifically, not its legacy cable networks like CNN or HGTV, but rather its studio and streaming operations, which include:
- Warner Bros. Pictures (home to the Harry Potter, DC, Barbie, and Dune franchises)
- HBO and HBO Max (premium scripted television and library depth)
- Warner Bros. Television (producer of You, Abbott Elementary, and Shrinking)
WBD, led by David Zaslav, has confirmed inbound interest from multiple parties, including Netflix, Comcast, and Skydance Media’s David Ellison, whose own $23.50/share offer was recently rejected.
Netflix’s inflection point: from disruptor to consolidator
Historically, Netflix has prided itself on organic growth and internal innovation. Its DNA is about scaling fast, iterating content based on audience data, and controlling global distribution without the baggage of legacy assets.
But Netflix is now operating in a saturated, slower-growth environment:
- Ads have launched.
- Password sharing has been cracked down on.
- Subscriber expansion in mature markets has plateaued.
With fewer levers left to pull, Netflix may be re-evaluating its long-held allergy to M&A. The WBD studio catalog represents something Netflix has always lacked: permanent IP gravity.
As Skip recently put it:
“Stranger Things is a hit. Harry Potter is a religion.”
Buying WBD would give Netflix a century of cinematic heritage, turning it from a content factory into a global IP house. The move isn’t just about adding franchises; it’s about acquiring the kind of brand permanence that algorithmic hits can’t provide.
Cultural collision course: HBO vs. Netflix
While the logic is clear, the creative and cultural friction would be enormous. HBO’s brand is built on scarcity, craftsmanship, and editorial curation. Netflix’s model is abundance, velocity, and data-driven production.
Skip’s observation captures the paradox:
“HBO is curated. Netflix is manufactured. Merging those cultures isn’t synergy. It’s schizophrenia.”
This isn’t a plug-and-play deal. Integrating Warner’s theatrical pipeline, HBO’s creative culture, and Netflix’s technology-led decision-making could easily dilute both brands. Netflix risks becoming the very thing it once disrupted: a legacy studio burdened by creative bureaucracy and debt.
Deal structure and strategic calculus
A full acquisition of WBD is unlikely; a carve-out of the studio and streaming divisions is the plausible scenario. This structure would:
- Allow Netflix to avoid WBD’s declining linear cable networks.
- Enable Zaslav to monetize the studio/streaming assets while retaining a leaner, cash-flow-positive legacy business.
- Face fewer antitrust issues than a complete merger.
Yet, even a partial deal would be massive (likely in the $50–70 billion range), depending on debt assumptions and carve-out terms. Integration risk, content licensing complexities, and overlapping subscriber bases remain key challenges.
If Netflix hesitates, Ellison and Comcast are waiting in the wings. Ellison’s Skydance already controls Paramount Global, while Comcast’s Versant spin-off could free it to pursue streaming acquisitions with fewer regulatory constraints.
The Streaming Wars Take
This is an identity test for Netflix.
- If it proceeds, Netflix would complete its transformation from tech disruptor to full-fledged media conglomerate, owning not just distribution but Hollywood’s creative canon. That would redefine the company’s power and permanence in global entertainment.
- If it walks away, Netflix risks watching competitors consolidate the very IP ecosystems it has relied on to license, remix, and compete.
For the industry, the implications are sweeping:
- IP ownership is the ultimate competitive advantage; content velocity alone no longer sustains global streaming growth.
- M&A boundaries are blurring, as tech-driven platforms and legacy studios begin to swap identities.
- Cultural integration will become the new strategic differentiator; success won’t hinge on who buys what, but on who can effectively fuse creative and algorithmic DNA.
