Netflix Submits Mostly Cash Bid for WBD

Netflix has submitted a predominantly cash-based bid to acquire Warner Bros. Discovery, intensifying a high-stakes auction for the struggling media giant, according to sources familiar with the matter. The streaming leader is simultaneously negotiating a bridge loan worth tens of billions of dollars to fund the potential deal, signaling strong confidence in closing a transaction that could reshape Hollywood's competitive landscape.

The offer, part of a second round of bids that kicked off the Monday, targets Warner Bros.' film and television studios along with its HBO Max streaming service, while leaving the company's cable networks—such as CNN and TNT—out of the equation. 

Warner Bros. Discovery, which has been exploring a sale since October amid mounting debt and subscriber losses, could finalize the process in days if its board approves, sources told Bloomberg. Shares of Warner Bros. Discovery edged up 0.75% in after-hours trading Monday, trading around $24.05, reflecting market optimism about a resolution.

This aggressive move by Netflix comes amid fierce competition from other suitors. Paramount Global, backed by CEO David Ellison and potential financing from Apollo Global Management and Middle Eastern sovereign wealth funds, has pitched a full takeover valued at up to $71 billion, including a prior $23.50-per-share offer that Warner Bros. rejected as too low. Comcast, parent of NBCUniversal, has also submitted a bid focused solely on the studios and streaming assets, similar to Netflix's approach. 

Netflix's decision to prioritize cash over stock—despite its robust market valuation—underscores a strategy to appeal directly to Warner Bros. shareholders wary of dilution, though it raises questions about long-term debt burdens in a high-interest environment.

Of the three suitors for WBD — Paramount, Netflix and Comcast — two of them are only interested in the studios and streaming business. That's because while the legacy cable channels like CNN or TNT remain profitable, virtually all of them are seeing declining viewership and ad revenues. Only Paramount wants the entire company, and is hoping to pair those networks with its own slate of linear TV properties.

Warner Bros. Discovery has faced headwinds since its 2022 merger, including a $40 billion-plus debt load, declining linear TV revenues, and HBO Max's uneven growth. The company had planned to spin off its cable assets into a separate entity called Discovery Global, but a sale could accelerate that timeline. Netflix, flush with $17 billion in cash reserves but eyeing expansion through premium content like Warner's DC Comics library and prestige franchises, hired investment bank Moelis & Co. in late October to advise on the deal. 

Antitrust scrutiny looms large, given past U.S. Department of Justice challenges to similar mergers, though a Trump administration may prove more lenient toward consolidation.

If successful, the acquisition would catapult Netflix into a dominant position, combining HBO's Emmy-winning originals with Netflix's global subscriber base of over 280 million. However, analysts warn of integration risks, including overlapping executive teams and content strategies. As the auction heats up, all eyes are on Warner Bros. CEO David Zaslav, who must balance shareholder value against regulatory hurdles in what could be the year's biggest media shakeup.