In a high-stakes move that underscores its determination to reshape the entertainment landscape, Netflix has ramped up its financial preparations for the proposed $72 billion acquisition of Warner Bros. Discovery's (WBD) core assets.
Despite pushback from rival bidders like Paramount Skydance and skeptical investors questioning the strategic fit, Netflix's latest SEC filings reveal a robust funding strategy designed to make its all-cash-and-stock offer ironclad. This comes as the streaming giant navigates antitrust scrutiny and a competitive landscape where media consolidation is both a boon and a battleground.
The Deal at a Glance
Announced on December 4, 2025, Netflix's agreement to acquire Warner Bros. - encompassing WBD's film and TV studios, HBO, Max streaming service, and iconic franchises like DC Comics and Harry Potter—carries an enterprise value of $82.7 billion (equity value $72 billion).
The transaction excludes WBD's linear networks (e.g., CNN, Discovery), which will spin off as "Discovery Global" in Q3 2026, paving the way for closure. Shareholders would receive $23.25 in cash plus approximately $4.50 in Netflix stock per share, subject to a collar mechanism.
This mega-merger would create a content powerhouse, combining Netflix's global subscriber base (over 280 million as of Q3 2025) with Warner's premium IP, potentially dominating the $200 billion+ streaming market.
However, it faces headwinds: Disney CEO Bob Iger has warned it could harm consumers and theaters by consolidating pricing power.
Financing Firepower: Loans and Refinancing
To fund the cash-heavy portion, Netflix has amassed a formidable debt portfolio.
As detailed in its December 22, 2025, SEC 8-K filing, the company secured up to $25 billion in new bank financing on December 19:
- A $5 billion senior unsecured revolving credit facility for flexible liquidity.
- Two $10 billion senior unsecured delayed-draw term loan facilities (one maturing in two years, the other in three).
This package refinances a chunk of the original $59 billion bridge loan - arranged by a syndicate including Wells Fargo, BNP Paribas, and HSBC - to provide more permanent, cost-effective funding.
The bridge loan, one of the largest ever for an investment-grade borrower, was initially committed to cover Netflix's promise of substantial cash payout.
Netflix's co-CEO Greg Peters has expressed confidence in the deal's approval, citing no major competitive overlaps. Jefferies analysts maintain a "Buy" rating on Netflix stock, viewing the acquisition as accretive despite investor concerns over debt levels.
The Bidding Rivalry: Paramount Skydance and Ellison's Gambit
Netflix isn't unchallenged. Paramount Skydance, led by David Ellison (son of Oracle founder Larry Ellison), launched a hostile $30-per-share all-cash tender offer for the entire WBD, later upping the ante.
On December 22, Paramount amended its bid with a $40.4 billion personal guarantee from Larry Ellison himself (shifting from the family trust), matching Netflix's $5.8 billion breakup fee, and extending the tender deadline to January 21, 2026.
WBD's board has rejected this as "inferior," urging shareholders to favor Netflix's proposal. This escalation highlights the fierce competition for WBD's assets, with Ellison's involvement adding tech billionaire intrigue to the Hollywood drama.
Regulatory and Investor Hurdles
Antitrust regulators, including the FTC and DOJ, are scrutinizing the deal amid concerns over market dominance. The final word rests with WBD's board and authorities, but Netflix's financing maneuvers signal unwavering intent. Investors remain divided: Some see synergies in content and distribution, while others question the debt burden on Netflix's balance sheet, already carrying $14-15 billion in long-term obligations pre-deal.
If successful, this could be the largest media merger since Disney-Fox ($71B in 2019), potentially valuing the combined entity over $500 billion. As Peters noted, the acquisition aligns with Netflix's growth strategy, but the path forward involves navigating investor skepticism and regulatory gates.
In an industry where content is king, Netflix's bold financing play aims to dethrone rivals and secure a streaming empire—leaving Ellison and Paramount in the dust.
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Author: Slava Vasipenok
Founder and CEO of QUASA (quasa.io) - Daily insights on Web3, AI, Crypto, and Freelance. Stay updated on finance, technology trends, and creator tools - with sources and real value.
Innovative entrepreneur with over 20 years of experience in IT, fintech, and blockchain. Specializes in decentralized solutions for freelancing, helping to overcome the barriers of traditional finance, especially in developing regions.
