Netflix’s senior management on Tuesday defended its proposed $82.7 billion acquisition of Warner Bros. Discovery’s studios and streaming assets, describing it as a key opportunity to enhance offerings for subscribers.
Greg Peters and Ted Sarandos, Co-CEOs of Netflix, alongside Spence Neumann, CFO of Netflix, used the company’s fourth-quarter earnings call to pitch the pending deal as an accelerant to its strategy rather than a defensive move amid concerns over stagnant engagement and future growth. Peters emphasised that the acquisition would serve as “another mechanism to improve our offering for our members,” aligning with Netflix’s focus on identifying the best opportunities, whether organic or through selective mergers and acquisitions, to strengthen its service while remaining flexible and disciplined.
Netflix released reports with 2025 earnings at $45.2 billion in revenue, a 16 percent increase from 2024. The streamers hit 325 million global subscribers in the year, and in Q4 2025 alone made an all-time single quarter record of $12.05 billion in revenue, an 18 percent increase from Q4 2024.
The executives addressed investor scepticism following a solid earnings report, where Netflix shares fell nearly 1 percent amid worries over a projected 10 percent rise in content spending for 2026, which could pressure profitability.
The stock has declined more than 25 percent since the deal surfaced last fall. Sarandos provided context for the shift in stance, noting that Netflix’s default position before due diligence was that it was “not buyers.” However, after reviewing Warner Bros. Discovery’s (WBD) data room alongside rivals like Paramount and NBC Universal, the team became very excited about this amazing opportunity.
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Netflix recently amended its offer to an all-cash structure from the original cash-and-stock mix, aiming to provide greater certainty for WBD shareholders and accelerate the path to a vote. The transaction, valued at $27.75 per WBD share (implying an equity value of about $72 billion and an enterprise value of $82.7 billion), is expected to close after WBD spins off its Global Networks division (including CNN and Discovery channels) into a separate entity, Discovery Global, targeted for the third quarter of 2026.
A key point of discussion was Netflix’s entry into theatrical film distribution, given Sarandos’ past comments viewing theatres as secondary to streaming. He described the approach as pragmatic, “This is a business and not a religion. Conditions change, and insights change. And we have a culture that we re-evaluate things when they do.”
Sarandos cited prior pivots such as advertising, live events, and sports as evidence of adaptability. He noted that building a theatrical engine had not previously made the priority list due to resource constraints, but the deal would deliver a scaled world-class theatrical distribution business with over $4 billion in global box office.
Warner-branded films will retain a 45-day theatrical window post-release. The deal faces competition from Paramount Skydance, which has pursued a hostile bid for all of WBD at a higher valuation, launched a proxy fight for board seats, and argued for better regulatory prospects. WBD’s board has repeatedly favoured Netflix’s proposal as superior, citing risks in Paramount’s approach.
Analysts and investors continue to debate the merits, with some viewing the acquisition as a way to bolster Netflix’s content pipeline and studio capabilities amid intensifying streaming competition, while others question the high price tag and integration challenges, particularly in managing a major theatrical operation. Regulatory scrutiny across multiple jurisdictions remains a hurdle.
