The acquisition of Warner Bros Discovery by Netflix marks a definitive shift in the media era: goodbye cable, hello streaming. Netflix is planning an all-cash offer for WBD’s studio and streaming businesses, valued at $83 billion, while leaving traditional cable networks like CNN and the Discovery Channel to be spun off.
This separation underscores the diverging fortunes of the two media models. Netflix is paying a premium for the high-growth assets of HBO and Warner Bros Pictures, while the declining linear networks are excluded. The move is designed to speed up the deal and defeat a hostile bid from Paramount Skydance.
Paramount has offered $108.4 billion for the whole company, but the bid relies on debt and has been rejected by WBD’s board. Paramount is now trying to replace the board to force the sale. Netflix’s all-cash offer allows WBD shareholders to cash out on the future of media while retaining a stake in its past.
The consolidation of streaming power has raised alarms in Washington. Politicians fear that a Netflix-WBD merger will create a monopoly, controlling nearly half the market. This regulatory scrutiny highlights the magnitude of the shift taking place.
The market reaction confirms the trend. WBD shares rose 1.6% on the news, signaling that investors value the streaming assets far more than the cable bundle. For Netflix, the deal is the final nail in the coffin of the old media order.