Netflix is splitting Warner Bros Discovery in two, taking the movies and leaving the news behind. The streaming giant is preparing an all-cash offer for WBD’s studio and entertainment assets, valued at $83 billion, while excluding linear networks like CNN and the Discovery Channel from the deal.
This strategic split is designed to streamline the acquisition and defeat a hostile bid from Paramount Skydance. Paramount has offered $108.4 billion for the entire company, but the bid relies on debt financing and has been rejected by WBD’s board. Paramount is now trying to replace the board to force the sale.
By paying cash for the entertainment assets, Netflix offers a clear path for shareholders. They get immediate value for the high-growth parts of the business—Warner Bros Pictures and HBO—while retaining ownership of the spun-off cable networks. This structure allows Netflix to avoid the complexities of the declining TV news market.
The deal has raised concerns about market dominance in the entertainment sector. Politicians warn that a Netflix-WBD merger would control nearly half of the streaming market. This concentration of power is likely to draw intense scrutiny from antitrust regulators.
Investors, however, seem to support the split. WBD shares rose 1.6% on the news, suggesting that the market agrees with Netflix’s assessment of value. By focusing on entertainment, Netflix is doubling down on its core business model while leaving the news to others.
Netflix Splits WBD: Takes Movies, Leaves News Behind
