Netflix pushes for WBD deal with all-cash offer, reveals US$1.5B in ad revenue
Netflix moves to seal its Warner Bros deal and reveals a booming ad business
Netflix is making bold moves to lock in its acquisition of Warner Bros Discovery (WBD).
The company is pushing to finalize its acquisition of Warner Bros Discovery (WBD) by revising its original cash-and-stock proposal into a full all-cash offer, while also revealing that its advertising business generated US$1.5 billion in revenue in 2025.
This article explores Netflix’s updated acquisition strategy, what its surging ad business signals for marketers, and why brands should keep a close eye on the streaming giant’s evolving ecosystem.
Short on time?
Here’s a table of contents for quick access:
- Timeline of the Netflix-WBD offer
- What changed in the WBD deal?
- Netflix’s ad business is catching fire
- Regulatory hurdles and industry reaction
- What marketers should know
- What subscribers should expect next
Patrecia Meliana
Timeline of the Netflix-WBD offer
The path to Netflix’s landmark acquisition did not begin with its revised all-cash bid.
In October, Warner Bros Discovery revealed it was exploring strategic options after receiving unsolicited interest from multiple industry players. The move followed years of financial pressure, driven by billions of dollars in debt, declining cable viewership, and rising competition from global streaming platforms. These challenges pushed WBD to consider selling off its film, television, and streaming assets.
By early December, Netflix emerged as a serious contender, proposing a deal focused specifically on WBD’s entertainment assets rather than the entire company. This included Warner Bros’ film and TV studios, as well as HBO, HBO Max, and related properties.
The bidding process quickly intensified. Paramount and Comcast were both reported to be in contention, with Paramount initially viewed as the frontrunner. Paramount’s proposal, valued at roughly US$108 billion, aimed to acquire the entire company. However, WBD’s board ultimately favored Netflix’s more targeted offer, citing lower risk and greater deal certainty.
Most recently, Netflix amended its proposal to an all-cash offer, valuing WBD shares at US$27.75 each and bringing the total deal value to approximately US$82.7 billion. This change marked a turning point in the acquisition process.
What changed in the WBD deal?
Netflix surprised investors by scrapping its original cash-and-stock deal for WBD’s studio and streaming assets in favor of a full-cash acquisition. The new bid values WBD shares at US$27.75, backed by a US$67.2 billion bridge loan commitment, including an additional US$8.2 billion secured in January.
Netflix said the decision was driven by speed and certainty. “The revised transaction structure expedites the timeline to a WBD shareholder vote and provides greater certainty of value that will be delivered at closing,” Netflix said in a letter to shareholders.
This strategic pivot also comes amid fierce competition. Even after Netflix emerged as the preferred buyer, Paramount continued to pursue WBD’s assets. WBD’s board repeatedly rejected Paramount’s offers, citing concerns that its proposal would leave the combined company carrying US$87 billion in debt.
Last week, the rivalry escalated further when Paramount filed a lawsuit seeking additional information about the Netflix deal, claiming its offer remains superior. The legal challenge underscores just how high the stakes have become.
If finalized, the acquisition would bring marquee IP like Game of Thrones, Harry Potter, and the DC superhero universe into Netflix’s fold. That means even more firepower to compete in the high-stakes streaming wars.
Netflix's ad business is catching fire
Alongside its aggressive acquisition strategy, Netflix is rapidly scaling its advertising business.
In its 2025 earnings update, Netflix reported total annual revenue of US$45.2 billion, up 16% year over year, with its global subscriber base surpassing 325 million. Ad revenue reached US$1.5 billion in 2025, more than 2.5 times higher than the previous year.
Netflix expects ad revenue to double again in 2026, reaching US$3 billion. The company also reported its strongest ad sales quarter in Q3, along with a doubling of upfront commitments.
Key to this growth is Netflix’s ad-supported tier, which continues to attract cost-conscious subscribers while unlocking premium inventory for advertisers. The company is also rolling out AI-driven ad formats designed to improve targeting, reduce waste, and place ads closer to relevant content.
For marketers, this confirms that Netflix’s AVOD model is no longer experimental. It is becoming a meaningful revenue engine.
Regulatory hurdles and industry reaction
Despite its momentum, the Netflix–WBD deal faces intense regulatory scrutiny.
Netflix co-CEO Ted Sarandos is scheduled to testify before a US Senate committee, highlighting the level of concern among lawmakers. In November, Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal formally urged the Justice Department’s Antitrust Division to examine the deal closely, warning that it could give Netflix excessive market power, raise consumer prices, and stifle competition.
If regulators ultimately block the acquisition, Netflix would be required to pay a US$5.8 billion breakup fee. It remains unclear whether WBD would remain independent or revisit previous acquisition offers in that scenario.
Industry reaction has also been largely negative. The Writers Guild of America has publicly opposed the merger on antitrust grounds, while industry insiders have raised concerns about potential job losses, wage pressure, and reduced opportunities for independent and diverse creators.
There is also uncertainty around theatrical release strategies. While Sarandos has confirmed that all Warner Bros films currently slated for theatrical release will proceed as planned, he has suggested that release windows could shorten over time, with films moving to streaming platforms sooner.
What marketers should know
Netflix’s aggressive moves in both content and advertising have clear implications for B2B marketers and brand strategists.
1. Netflix is becoming a full-stack media platform
With the addition of HBO Max and WBD’s content library, Netflix is no longer just a streaming app. It is positioning itself as a vertically integrated studio, distributor, and ad-tech platform. Brands should watch for new opportunities in product placement, branded content, and multi-platform advertising.
2. AVOD is gaining serious momentum
The leap in ad revenue proves Netflix’s AVOD model is working. For marketers, this opens up fresh targeting options within premium video environments. Think beyond traditional broadcast placements and start exploring Netflix’s ad-tier capabilities.
3. AI-driven ads demand new creative strategies
With Netflix deploying AI ad formats, marketers will need to revisit their creative approach. Dynamic ad insertion and contextual targeting may require more flexible creative assets that align with genre, mood, or audience segments.
4. Media buyers must prepare for consolidation
A completed WBD deal could tighten the ad supply chain. Brands may gain access to broader reach, but they may also face higher costs or fewer negotiating levers. Smart marketers will diversify spend across platforms while testing Netflix's offerings early.
What subscribers should expect next
For subscribers, Netflix has said that HBO and HBO Max operations will remain largely unchanged in the near term. No immediate pricing changes are planned during the regulatory approval phase.
That said, Netflix has historically raised subscription prices every one to two years. While nothing has been announced, price increases remain a realistic possibility once the acquisition is finalized.
A WBD shareholder vote is expected around April. If approved, the deal is anticipated to close within 12 to 18 months, pending regulatory clearance.
Netflix is making it clear it wants to dominate the future of entertainment, both in content and monetization. With a massive all-cash WBD bid and skyrocketing ad revenue, the company is rewriting the playbook for media consolidation.
For marketers, this is a moment to watch closely. The streaming giant is quickly becoming one of the most important advertising channels globally. Those who act early and adapt fast will be better positioned to ride the next wave.
