Netflix has agreed to buy Warner Bros. Discovery's TV and film studios and streaming division for $72 billion, a blockbuster deal that would give the streaming pioneer control of one of Hollywood's most prized and oldest assets.

The agreement, announced Friday, Dec. 5., follows a weekslong bidding war in which Netflix seized the lead with a nearly $28-a-share offer that eclipsed Paramount Skydance's nearly $24 bid for the whole of Warner Bros Discovery, including the cable TV assets slated for a spinoff.

Warner Bros. Discovery shares closed at $24.5 on Thursday, Dec. 4, giving it a market value of $61 billion.

Netflix-Warner Bros. Discovery Deal set to reshape media landscape

Founded in 1997 as a DVD rental company, Netflix has grown as a streaming giant with shows such as "Bridgerton" and "Stranger Things" and Oscar-winning movies "Parasite" and "Roma." Now, the California-based company finds itself on the verge of acquiring one of the most iconic movie studios, home to "Casablanca" and "Bugs Bunny" as well as "Batman," "Superman" and "Wonder Woman."

Along the way, Netflix has traditionally built its own catalog of franchises, but acquiring marquee franchises such as "Game of Thrones" and "Harry Potter" represents "a rare opportunity," Netflix co-CEO Ted Sarandos said in a call about the deal. "It's going to help us achieve our mission to entertain the world and to bring people together through great stories."

"Together, we can give audiences more of what they love and help define the next century of storytelling," Sarandos said in a statement.

A combined Netflix and Warner Bros. Discovery could further tilt the power balance in Hollywood in favor of the streaming giant, helping it ward off competition from Walt Disney and the Ellison family-backed Paramount.

"If this deal makes it through regulatory approval, Netflix will cement itself as the Goliath of streaming services now with the combined weight of HBO Max and the content studios behind it all," said Mike Proulx, research director at Forrester, a tech advisory firm. "This deal changes the calculus of the streaming wars, representing a seismic shift in the entertainment industry."

Will Netflix-Warner Bros. Discovery deal happen? Strong antitrust scrutiny likely

Analysts have said Netflix is driven by a desire to lock up long-term rights to hit shows and films and rely less on outside studios as it expands into gaming and looks for new avenues of growth after the success of its password-sharing crackdown.

But the deal probably will face strong antitrust scrutiny in Europe and the United States. The combination would give the expanded company Netflix's 300 million or so subscribers with HBO Max's nearly 130 million streaming subscribers.

Paramount, led David Ellison, the son of Oracle founder Larry Ellison, had been the expected leader in the fight for Warner Bros. Discovery after it kicked off the bidding war with a series of unsolicited offers. Ellison and Paramount have close ties with the Trump administration and questioned the sale process earlier this week in a letter alleging favorable treatment to Netflix.

Paramount had offered $30 a share for Warner Bros. Discovery, CNBC reported on Dec. 5. After the merger deal was announced, the Trump administration said it viewed the deal with "heavy skepticism," CNBC reported.

But Sarandos stressed that "this deal is pro-consumer, pro-innovation, pro-worker, pro-creator and pro-growth."

Consumers would be able to subscribe to Netflix and HBO Max and other Warner Bros. Discovery packages, increasing "value for consumers," Sarandos said.

Netflix would continue releasing Warner Bros. Discovery films going forward, fending off fears that the deal would eliminate another studio and major source of theatrical films.

But a group of "concerned feature film producers" sent a letter to Congress on Dec. 4 expressing concern that a Netflix-Warner Bros. Discovery deal could "destroy" the theatrical movie business, Variety reported. Netflix could "effectively hold a noose around the theatrical marketplace" with its clout, the letter said, according to Variety.

Netflix acquiring Warner Bros. Discovery, one of its top competitors, is akin to having let Facebook acquire Instagram and WhatsApp, Ross Benes, a senior analyst for research firm Emarketer, said in a statement sent to USA TODAY.

"Despite whatever the company says, this is not a win for consumers. Netflix has already aggressively raised prices, increased ad load, and stopped people from sharing passwords," he said. "Absorbing a competitor with strong content will only lead to its service becoming more expensive and give consumers less choice. This is the pattern of large scale industry consolidation and deregulated media."

Facts about Netflix's cash-and-stock deal for Warner Bros. Discovery

Shares of Netflix, which has a market cap of $424 billion, were down nearly 3% in early trading Friday, while Paramount was down about 5%. Comcast, the third suitor, was trading up about 1%.

Under the deal, each Warner Bros. Discovery shareholder would get $23.25 in cash and about $4.50 in Netflix stock per share, valuing Warner at $27.75 a share, or about $72 billion in equity and $82.7 billion, including debt.

The deal is expected to close within 12 to 18 months, Sarandos said, after Warner Bros. Discovery spins off its global networks unit, Discovery Global, which includes CNN, TBS, TNN and other channels, into a separate listed company, a move now set for completion in the third quarter of 2026.

David Zaslav, president and CEO of Warner Bros. Discovery, will run the company until the transaction is complete, the companies said.

Netflix said it expects to generate at least $2 billion to $3 billion in annual cost savings by the third year, after the deal closes.

Contributing: Reuters

Mike Snider is a national trending news reporter for USA TODAY. You can follow him on Threads, Bluesky, X and email him at mikegsnider & @mikegsnider.bsky.social & @mikesnider & msnider@usatoday.com

What's everyone talking about? Sign up for our trending newsletter to get the latest news of the day

This article originally appeared on USA TODAY: What we know about Netflix's blockbuster deal with Warner Bros.

Reporting by Mike Snider, USA TODAY / USA TODAY

USA TODAY Network via Reuters Connect