Netflix’s $82.7 Billion Bid for Warner Bros. and HBO Draws DOJ Second Request and Senate Scrutiny

The fight over who will control a major slice of the streaming era has moved squarely into Washington, as Netflix’s $82.7 billion agreement to buy the Warner Bros. film and television studios and the HBO and HBO Max businesses has triggered a deep antitrust probe and a rare Senate hearing that mixed competition law with culture-war politics.

On Dec. 5, 2025, Netflix and Warner Bros. Discovery Inc. announced the deal in a transaction valued at about $82.7 billion, including debt. The equity value for Warner Bros. Discovery shareholders was pegged at roughly $72 billion, or $27.75 per share.

The companies describe the transaction as a way to marry Netflix’s global streaming platform with one of Hollywood’s most storied content engines. Federal regulators, lawmakers and a rival bidder are challenging how much power that combination would give a single company in a market where streaming has overtaken traditional television.

The U.S. Department of Justice Antitrust Division issued “Second Requests” for information to both Netflix and Warner Bros. Discovery on Jan. 16, extending the waiting period under the Hart-Scott-Rodino Act and signaling an in-depth investigation. The move came weeks before the Senate Judiciary antitrust subcommittee hauled executives to Capitol Hill for a Feb. 3 hearing titled “Examining the Competitive Impact of the Proposed Netflix–Warner Brothers Transaction.”

The outcome will help determine whether updated federal merger guidelines—which make it easier for regulators to presume a deal is illegal when a firm’s market share tops 30%—have real force in court, and how much consolidation Washington is willing to tolerate in the streaming business.

What Netflix is buying—and what it isn’t

The transaction is not a clean sale of Warner Bros. Discovery. Under the terms, Netflix will acquire the Warner Bros. film and TV studios and the HBO and HBO Max operations—the group the companies collectively refer to as “Warner Bros.”

Before the sale closes, Warner Bros. Discovery plans to separate its global linear networks, including CNN, TNT Sports, Discovery Channel and other cable and international brands, into a new publicly traded company called Discovery Global. That spin-off, now targeted for the third quarter of 2026, must be completed before Netflix can close its purchase of the studios and premium streaming assets.

The original agreement contemplated a mix of cash and Netflix stock. On Jan. 20, the companies amended the terms to make the consideration all cash at the same $27.75 per-share price, a change both boards approved unanimously. The revised structure, executives said, provides “value certainty” for Warner Bros. Discovery shareholders and insulates them from swings in Netflix’s share price.

Netflix has said it will fund the acquisition with cash on hand, new debt and committed bank financing while maintaining an investment-grade balance sheet. People familiar with the financing say the company has lined up more than $40 billion in bank commitments. The merger agreement also includes a reverse break-up fee of roughly $5.8 billion that Netflix would owe Warner Bros. Discovery if the deal fails under certain regulatory conditions—one of the largest such protections seen in media.

A tougher antitrust climate

The Justice Department’s Second Requests require detailed internal documents, data and analyses from both companies and pause the deal’s statutory waiting period until 30 days after they certify substantial compliance.

The review is unfolding under merger guidelines the Justice Department and Federal Trade Commission finalized in 2023. Those guidelines state that an acquisition is presumed to substantially lessen competition when the post-merger firm has more than a 30% share of a relevant market and the deal increases concentration by a specified amount. They also lower the thresholds at which regulators view a market as highly concentrated.

Netflix and Warner Bros. Discovery portray the deal as a response to intense competition across the broader TV and video landscape, where streaming, linear television and user-generated platforms all vie for attention.

In testimony before the Senate subcommittee, Netflix co-Chief Executive Ted Sarandos said that, taken together, Netflix and HBO Max would still account for “about 10% of total TV viewing time” in the United States.

“This is a highly competitive space,” Sarandos said, pointing to Disney, Amazon, YouTube and Paramount as formidable rivals. “We’re not talking about a company that dominates what people watch.”

Several senators pushed back, arguing that the relevant market is subscription streaming, not all forms of television. If regulators focus on subscription video services, the combined company’s share could surpass the 30% level that the new guidelines flag as presumptively illegal, they said.

Assistant Attorney General Gail Slater, who leads the Antitrust Division, has not commented publicly on the specifics of the case. In earlier remarks about merger enforcement, she has said the department will apply the new guidelines “faithfully to the facts of each transaction” and will challenge deals that risk higher prices, lower quality or reduced innovation, including in digital markets.

Among the issues Justice Department lawyers are expected to examine are whether a combined Netflix–Warner Bros. would have the power to raise subscription prices, limit output or harm quality in streaming; whether owning both the largest subscription streaming platform and a major studio with franchises such as DC and Harry Potter would enable the firm to disadvantage rival platforms by withholding or delaying content licenses; and whether consolidation among major content buyers would weaken the bargaining position of writers, actors and independent producers.

Senate hearing mixes antitrust and ideology

The Feb. 3 hearing in the Dirksen Senate Office Building drew bipartisan scrutiny of the deal—and sharp detours into cultural politics.

Subcommittee Chair Sen. Mike Lee, a Utah Republican, pressed Sarandos on whether the combined company’s market share would cross the threshold that the Justice Department’s guidelines treat as presumptively anticompetitive. Other lawmakers asked whether past media mergers, such as Disney’s acquisition of most of 21st Century Fox and Discovery’s 2022 combination with WarnerMedia, offered a cautionary tale of job cuts and content consolidation.

Sarandos sought to reassure lawmakers that Netflix would not shutter Warner’s theatrical operation or collapse HBO Max into the Netflix app.

“We intend to maintain robust theatrical releases for Warner Bros. films, with a theatrical window of around 45 days before streaming,” he said. “We also plan to keep HBO Max as a distinct brand and service.”

At several points, the hearing turned from economics to program content. Sen. Josh Hawley, a Missouri Republican, accused Netflix of pushing “transgender ideology” and “woke” themes in children’s programming, claiming that “nearly half” of its kids’ catalog promoted such views. He did not provide sourcing for the figure.

Sarandos rejected that characterization.

“We don’t have a political agenda,” he said. “We offer a wide range of programming to reflect the diversity of our audience.”

Democratic Sen. Cory Booker of New Jersey raised concerns about the independence of merger enforcement in a second Trump administration, noting the former president’s public clashes with media and technology companies. President Donald Trump said in a recent television interview that he would “stay out of” the fight between Netflix and its rival bidder and “leave it to DOJ.”

A rival bid from Paramount Skydance

The regulatory review is playing out against a backdrop of a hostile bidding war.

Paramount Skydance, a new entity combining Paramount Global with Skydance Media and controlled by David Ellison, has made an all-cash offer of $30 per share to acquire all of Warner Bros. Discovery, a proposal that implies an enterprise value of about $108 billion. Paramount has said the bid is fully financed and backed by an irrevocable personal guarantee from Oracle co-founder Larry Ellison.

Warner Bros. Discovery’s board has rejected Paramount Skydance’s advances eight times, according to letters the company has sent shareholders. Directors say that once the costs of terminating the Netflix agreement—including an estimated $2.8 billion break-up fee to Netflix and roughly $1.5 billion in debt-exchange penalties and other financing costs—are taken into account, the Paramount offer does not represent a “Superior Proposal” under the Netflix merger contract.

Paramount Skydance has launched a proxy campaign urging Warner Bros. Discovery shareholders to vote against the Netflix deal at a special meeting expected this spring and has filed suit in Delaware, alleging that Warner Bros. Discovery failed to provide complete information in its responses to the tender offer. Some hedge funds, including Pentwater Capital, have said publicly they may oppose the Netflix transaction unless the board engages more fully with Paramount’s bid.

As of early February, Warner Bros. Discovery shares were trading below Netflix’s $27.75 per-share offer, suggesting investors see a meaningful chance the Netflix deal will be delayed or blocked.

What comes next

Under the companies’ current timetable, Warner Bros. Discovery aims to complete the Discovery Global spin-off in the third quarter of 2026. If regulators approve the Netflix acquisition, closing could follow in late 2026 or 2027. The Justice Department, however, could seek to block the deal in court or negotiate conditions that require divestitures or ongoing behavioral commitments, such as non-discriminatory content licensing.

For Hollywood workers, rival studios and tens of millions of subscribers, the stakes are significant. The combined company would bundle Netflix’s distribution scale with Warner’s century of film and television franchises and HBO’s prestige pipeline, concentrating creative and commercial power in one of the largest entertainment companies ever assembled.

Whether that scale will be allowed—and under what conditions—now rests with antitrust officials and, ultimately, the courts. Their decision will not only determine the fate of a single transaction, but also set the boundaries for how much bigger the biggest players in streaming are allowed to become.