425: Netflix CEO Defends WBD Deal Amid Antitrust Scrutiny

Netflix co-CEO Greg Peters reaffirmed confidence in the Warner Bros. Discovery acquisition, addressing antitrust concerns and emphasizing the deal's pro-consumer and pro-creator benefits.

Summary

• Netflix co-CEO Greg Peters discussed the proposed acquisition of Warner Bros. Discovery (WBD) in a CNBC interview on December 17, 2025.
• The WBD Board has reaffirmed its belief that Netflix's offer is the best value and most certain path forward.
• Netflix is confident the regulatory process will approve the deal, citing facts that support it as pro-consumer, pro-creator, pro-worker, pro-growth, pro-innovation, and pro-competition.
• Netflix argues that its combined TV view share with HBO Max would still be behind YouTube and Disney, countering claims of market dominance.
• Over 75% of HBO Max members also subscribe to Netflix, indicating complementary services and an opportunity for tailored subscription plans.
• Netflix plans to maintain Warner Bros. operations, including its theatrical film division, world-class television studio, and HBO brand, committing to industry-standard theatrical windows.
• Netflix has created over 140,000 jobs in the U.S. in the last four years, supporting small businesses and local communities.
• The deal is expected to accelerate Netflix's double-digit organic growth trajectory.
• Netflix has a market cap of over $400 billion and a strong investment-grade balance sheet.
• The deal offers flexibility for WBD to separate its Discovery Global business.
• Netflix is prepared to defend the deal in court if necessary.

Sentiment

Score: 7

Explanation: The sentiment is largely positive, driven by management's strong confidence in the deal's strategic rationale, regulatory approval, and financial benefits. Netflix emphasizes the complementary nature of the assets, job creation, and commitment to preserving valuable brands like HBO. However, acknowledged antitrust hurdles, shareholder concerns about the offer structure, and integration risks temper the overall sentiment, preventing a higher score.

Positives

• The WBD Board reaffirmed the deal, signaling confidence in Netflix's offer as the best value and most certain path.
• Netflix believes the deal is pro-consumer, pro-creator, pro-worker, pro-growth, pro-innovation, and pro-competition.
• High complementarity between Netflix and HBO Max, with over 75% of HBO Max members also subscribing to Netflix, creating opportunities for tailored plans and more value.
• The acquisition provides Netflix with an incredible library of content from the Warner Bros. catalog, expanding global reach.
• Netflix intends to preserve and double down on the HBO brand and its prestige TV reputation.
• Netflix is committed to maintaining Warner Bros. operations, including its successful theatrical film division and world-class television studio, with industry-standard theatrical windows.
• The deal is expected to accelerate Netflix's organic double-digit growth path.
• Netflix highlights its strong financial position with an over $400 billion market cap and an investment-grade balance sheet.
• The deal supports American industry, creating over 140,000 jobs in the U.S. in the last four years, including union jobs and production staying in the U.S.

Negatives

• Shareholder Mario Gabelli expressed a desire for a higher cash portion in the offer and elimination of the collar, indicating potential dissatisfaction with the current terms.
• Concerns exist that the deal could negatively impact Netflix's multiple, given its historical envy in the media business, and that it represents a departure from Netflix's organic growth strategy.
• The deal involves significant integration challenges, as Netflix has not undertaken an acquisition of this size before.
• Concerns from the Hollywood community about the impact on the creative ecosystem, particularly regarding film releases and the potential for Netflix to follow its own model rather than traditional theatrical releases.

Risks

• Antitrust objections from regulators (DOJ, EU Commission) due to combining the number one and number three streamers (Netflix and HBO).
• Failure to obtain stockholder and regulatory approvals on anticipated terms and timing.
• Failure to realize the anticipated benefits of the proposed transaction, including delays in completion or integration.
• Potential litigation relating to the proposed transaction that could be instituted against Netflix, WBD, or their respective directors.
• Disruptions from the proposed transaction harming Netflix's or WBD's business, plans, and operations.
• Inability to retain and hire key personnel.
• Potential adverse reactions or changes to business relationships resulting from the announcement, pendency, or completion of the transaction.
• Uncertainty as to the long-term value of WBD's common stock.
• Legislative, regulatory, and economic developments affecting businesses.
• General economic and market developments and conditions.
• Evolving legal, regulatory, and tax regimes.
• Potential business uncertainty and restrictions during the pendency of the transaction impacting business opportunities or strategic transactions.
• Failure to receive approval from WBD stockholders.

Future Outlook

Netflix expects the regulatory process to conclude in its favor, leading to deal approval within 12 to 18 months. The company anticipates the acquisition will accelerate its double-digit organic growth trajectory, unlock more value for consumers and creators through WBD's content catalog and HBO brand, and maintain Warner Bros. operations including theatrical releases. Netflix is prepared to defend the deal in court if necessary.

Management Comments

• "We believe the regulatory process will ultimately conclude based on the facts, and we feel those facts really support the approval of the deal."
• "We're confident regulators will ultimately see this as pro-consumer, pro-creator, pro-worker, pro-growth, pro-innovation and pro-competition."
• "More than 75% of HBO Max members also subscribe to Netflix, so this creates actually an opportunity to offer consumers a more tailored, better optimized subscription plan. More value."
• "We think there's a tremendous value in HBO and its an amazing brand. It says prestige TV. We're excited to double down on that promise."
• "We have a great story that we've created over 140,000 jobs in just the last four years in the United States."
• "We like our organic growth path. We're on a great trajectory to deliver double-digit growth still, we see that coming for many years. But, we saw as we got into looking at this opportunity, basically the opportunity to accelerate that."
• "It's probably irresponsible for us not to actually bid on this and bid on it in a disciplined way."
• "We will maintain Warner Bros. operations. That means we're 100% committed to releasing Warner Bros. films in theaters with industry standard windows."
• "We've been looking at this as a 12-to-18-month process."
• "We have a good case, and we believe that we should defend that case and make that case strongly."

Industry Context

The proposed acquisition of Warner Bros. Discovery by Netflix represents a significant consolidation in the highly competitive streaming and media content industry. Netflix, traditionally known for its organic growth and in-house content, is now pursuing a major M&A strategy to acquire a vast content library and established studio operations. This move comes amidst increasing competition from tech giants like Amazon and Apple, as well as traditional media players like Disney, Comcast, and Paramount, all vying for TV view share and subscriber numbers. The deal also highlights the ongoing debate around market definition in the streaming era, with Netflix arguing for a broader view that includes YouTube and other services, rather than just subscription video-on-demand (SVOD) competitors.

Comparison to Industry Standards

• Netflix's combined TV view share with HBO Max would still rank behind Google/YouTube and Disney, indicating that even with the acquisition, it would not dominate the broader TV viewing market.
• The market for content buyers is expanding with new entrants like Amazon and Apple, and the rise of free ad-supported streaming television (FAST) services like Tubi, suggesting a competitive landscape for creators.
• Netflix's commitment to maintaining Warner Bros. theatrical film division and releasing films with industry-standard windows aligns with traditional studio practices, contrasting with its historical direct-to-streaming model and potentially easing concerns from the Hollywood community and comparing favorably to studios that have experimented with shorter windows.

Legal Proceedings

• Potential litigation relating to the proposed transaction that could be instituted against Netflix, WBD, or their respective directors.
• Netflix is prepared to fight in court if taken there, believing they have a good case.

Stakeholder Impact

• Shareholders (Netflix): Potential for accelerated double-digit growth and value creation, but also concerns about the impact on Netflix's multiple and integration risks.
• Shareholders (WBD): The WBD Board believes Netflix's offer provides the "best value" and "most certain path forward," but some shareholders (e.g., Mario Gabelli) desire a higher cash portion and elimination of the collar.
• Consumers: Expected to benefit from a more tailored, better optimized subscription plan, more value, and access to a broader content library.
• Creators: Expected to benefit from more opportunities to tell stories and reach a bigger global audience, with Netflix maintaining Warner Bros. operations and theatrical releases.
• Workers/Employees: The deal is presented as pro-worker, supporting American jobs (over 140,000 created by Netflix in the last four years), including union jobs, and keeping production in the U.S.
• Hollywood Community: Concerns exist about the impact on the creative ecosystem, but Netflix commits to maintaining Warner Bros. theatrical releases and operations.

Next Steps

• Continued engagement with competition authorities, including the DOJ and EU Commission, to explain the deal's benefits.
• Filing of a registration statement on Form S-4 by Netflix, including a prospectus and proxy statement for WBD stockholders.
• Filing of a proxy statement by WBD.
• Filing of a registration statement for the newly formed subsidiary of WBD to be spun off.
• Mailing of the definitive proxy statement to WBD stockholders.
• Potential litigation if the deal is challenged in court, which Netflix is prepared to defend.
• Closing of the deal, expected within 12 to 18 months.

Key Dates

Recommendation

The filing provides a strong defense of the Warner Bros. Discovery acquisition by Netflix's co-CEO, emphasizing strategic benefits, regulatory confidence, and commitment to preserving key assets like HBO and theatrical releases. This suggests a positive long-term outlook if the deal closes. However, significant antitrust hurdles, potential shareholder dissatisfaction with the offer terms, and the inherent risks of a large-scale integration for a company new to such acquisitions warrant a cautious "hold" recommendation. Investors should await further clarity on regulatory approvals and the final deal structure before making more aggressive moves.

Keywords

Netflix, Warner Bros. Discovery, WBD, Acquisition, Merger, Antitrust, SEC Filing, Streaming, Media Industry, HBO, Regulatory Approval, Corporate Strategy, Content Library, Theatrical Release, Shareholder Value