Netflix Explores Potential Bid for Warner Bros. Discovery, Hires Investment Bank

Netflix is reportedly considering a bid for Warner Bros. Discovery’s studio and streaming businesses, according to multiple sources familiar with the matter.

The streaming giant has brought in investment bank Moelis & Co to advise on a potential offer and has been given access to financial information needed to evaluate a deal.

Owning Warner Bros. would give Netflix control over some of Hollywood’s most popular franchises, including Harry Potter and DC Comics.

The studio’s television division also produces hits that stream on Netflix, such as You, Maid, and Running Point. In addition, HBO and its streaming service could add premium content and subscribers to Netflix’s platform.

Netflix CEO Ted Sarandos spoke about acquisitions during the company’s investor call last week.

While he said the company is usually “more builders than buyers,” he explained that Netflix does consider deals that could expand its entertainment offerings. However, he made it clear that the company has no interest in cable networks like CNN, TNT, Food Network, or Animal Planet. “We’ve been very clear in the past that we have no interest in owning legacy media networks. There is no change there,” Sarandos said.

Warner Bros. Discovery announced last week that it is reviewing its options after receiving multiple offers, including one from Paramount and Skydance. The company’s board is deciding whether to split the business, separating its studios and streaming service from its television networks, or pursue a full or partial sale.

Paramount CEO David Ellison is reported to be preparing a cash bid for the company. According to Dylan Byers of Puck, Ellison’s move has prompted other companies, including Netflix, to review their options. “Ellison’s seemingly limitless cash and ambition have accelerated Hollywood’s consolidation process, and his decision to bid for all of WBD now—in an attempt to preempt potential rivals—is forcing nearly everyone to dust off their models,” Byers wrote.

Despite Warner Bros.’ success with films like Barbie, Superman, Sinners, and Weapons, some analysts see limits to how high WBD’s stock can rise. Wells Fargo analyst Steven Cahall told Puck that he does not expect the stock to go much beyond $19 per share, and he said major players like Apple and Amazon are unlikely to buy the entire company.

Netflix Co-CEO Greg Peters also commented on the possibility of a deal at the Bloomberg Screentime conference. “We come from a deep heritage of being builders rather than buyers. I also think that one should have a reasonable amount of skepticism around big media mergers, they don’t have an amazing track record over the history of time,” Peters said.

He added, “I would say it’s our responsibility to evaluate all our options.” Peters emphasized that Netflix’s focus remains on growth. “Our job is to figure out what’s the best way to grow our business? And we have to think really carefully, how do we invest our capital, our time and our attention, and if that’s the best way to do it, great, and if it’s not, then we should do something else.”

Netflix considering Warner Bros. Discovery shows how much Hollywood is shifting toward consolidation. Owning a major studio and its streaming service could give Netflix a huge boost in content and subscriber growth. But big acquisitions always carry risks, and it will be interesting to see if the streaming giant decides to go through with a bid. What do you think about Netflix potentially buying Warner Bros.? Share your thoughts in the comments.