How Netflix outplayed Hollywood’s power brokers to seize Warner Bros

Netflix upends Hollywood’s old studio order

For more than a decade, Hollywood’s traditional studios regarded Netflix as a flashy pretender — a company that mailed DVDs, uploaded shows and spent too much money chasing subscribers. Executives scoffed when analysts predicted the streamer would one day rival the major studios.

Yet this week, in a turn of events that even seasoned industry hands describe as “unthinkable,” Netflix clinched an $83bn agreement to acquire Warner Bros and its parent assets, upending a century of studio dominance. The surprise victory caps a whirlwind six-week auction that pitted the streamer against some of the most deep-pocketed forces in media, including David Ellison’s Paramount-backed bid, Saudi capital, and Comcast’s institutional firepower, the Financial Times reported.

Polymarket bettors gave Netflix less than a 5 per cent chance of success as recently as Monday. By Friday, it was the undisputed buyer of one of Hollywood’s crown jewels.

The appeal of Warner Bros is obvious inside the industry. The studio’s vault contains some of the world’s most lucrative franchises: Harry Potter, Batman, DC Comics, alongside HBO’s powerhouse television slate — Game of Thrones, The Sopranos, The White Lotus — and a global streaming service in HBO Max.

Controlling those assets gives Netflix something it has long coveted: a library with the cultural durability of the old studio system, and a way to deepen its ambitions in theatrical distribution, consumer products and franchise-building.

Behind the scenes, Warner Bros Discovery chief executive David Zaslav engineered the kind of boardroom drama that could itself become a streaming series.

When David Ellison — fresh from closing his $8bn Paramount takeover — turned his attention to Warner, many insiders assumed the 42-year-old billionaire was the inevitable winner. He had backing from his father, Oracle co-founder Larry Ellison, plus commitments from Apollo and Saudi investors ready to bankroll a major acquisition.

Trump, speaking publicly, even appeared to endorse the Ellison camp.

But Zaslav had no intention of relinquishing control. He had already unveiled a plan to split the company that would allow him to retain leadership of the studio, HBO and streaming — while jettisoning traditional TV networks dragging down the share price. Ellison’s entrance threatened that strategy.

To wrest back control, Warner’s board launched a formal auction on an extraordinarily compressed timeline. Internally, the process ran under the codename “Project Sterling,” with bidders assigned aliases — Netflix was “Noble,” Paramount “Prince,” Comcast “Charm.”

Directors were summoned into near-daily emergency meetings. Drafts flew back and forth at 3am. Over Thanksgiving weekend, negotiations stretched into all-night sessions.

Publicly, Netflix insisted it wasn’t in the market for giant mergers. Co-CEO Greg Peters told a conference in October: “We’re builders, not buyers.”

Privately, the company was constructing a bid that would ultimately win the board’s unanimous support.

What distinguished Netflix had little to do with headline price and everything to do with readiness. While rivals were still revising deal terms, Netflix submitted a package the board could sign immediately — every covenant tightened, every clause finalized, every regulatory scenario mapped out.

The company agreed to a $5.8bn break fee, one of the largest ever seen in media M&A, signalling confidence that it could weather antitrust scrutiny under a Trump administration already wary of mega-mergers.

“Netflix was simply ready to close,” said one person familiar with the board’s deliberations. “The paperwork was executable that night. No one else was at that point.”

Minutes after directors concluded their vote, contracts were signed.

In a twist worthy of a prestige drama, Zaslav leaves the process with something close to a personal victory. Netflix’s offer reportedly allows him to continue running the studio, a concession neither Ellison nor Comcast was willing to make.

For a chief executive whose job once looked precarious, securing operational control under new ownership is a stunning reversal.

Netflix expects the deal to close within 12 to 18 months, though those close to regulators warn the timeline could stretch longer. Combining two of America’s largest streaming platforms will inevitably attract antitrust scrutiny, particularly given Netflix’s dominance in digital viewership.

The creative community has also reacted with alarm. James Cameron called the sale “a catastrophic loss” for cinema, fearing Netflix’s emphasis on streaming will weaken theatrical commitments. Cinema United, representing more than 30,000 US screens, vowed to oppose the deal, warning it could erase a quarter of the domestic box office if Warner’s traditional release strategy is disrupted.

Netflix has promised to honour Warner’s theatrical pipeline — but scepticism remains deep in Hollywood.

For all the hand-wringing, the takeover marks an extraordinary moment for a company once dismissed as a novelty. Ted Sarandos reminded investors on Friday that Netflix has reinvented itself repeatedly: “We started with DVDs by mail. Then streaming. Then originals. Then live programming. From US-only to global. We can’t stand still.”

Inside his home sits a replica of Rosebud, the sled from Citizen Kane — a symbol of old Hollywood myth-making. With Warner Bros now within reach, Netflix seems poised to inherit not just a studio, but the narrative throne of the entertainment industry itself.