How might the agreement between Netflix and Warner Bros. transform the Hollywood landscape?

Netflix’s Acquisition of Warner Bros. Sparks Industry Turmoil

Just a day after Netflix revealed its staggering $82.7 billion agreement to purchase Warner Bros., the entertainment world is already reeling. Industry insiders are calling the move a potential catastrophe for traditional filmmaking, with some even suggesting it could signal the downfall of Hollywood as we know it.

Strong Backlash from Industry Unions

The Writers Guild of America (WGA) has emerged as one of the most vocal opponents, issuing a statement demanding that the merger be halted. According to the WGA, “Antitrust laws exist to prevent exactly this scenario: the largest streaming platform absorbing a major rival.” The guild warns that such a merger would lead to job losses, lower wages, deteriorating working conditions for entertainment professionals, increased costs for viewers, and a reduction in both the quantity and variety of available content.

Other Hollywood unions, while less direct, have also voiced apprehension. SAG-AFTRA, representing actors, highlighted numerous unresolved issues regarding how the acquisition might shape the future of the entertainment sector.

Details of the Acquisition Process

The deal followed a competitive bidding process involving Paramount and Comcast. Paramount aimed to purchase the entire company, whereas Netflix’s acquisition focuses on Warner Bros.’ film and television studios, along with its streaming operations. This comes as Warner Bros. prepares to separate its TV networks division.

Initially, Paramount appeared to have the upper hand, partly due to its connections with the Trump administration—David Ellison, son of Oracle co-founder and Trump supporter Larry Ellison, now leads the studio. However, Paramount’s legal team soon accused the process of being biased, and Netflix ultimately secured the deal.

Regulatory Hurdles and Political Reactions

Set to finalize in the third quarter of 2026, the acquisition is expected to undergo intense regulatory examination. Senator Elizabeth Warren, a prominent critic of large tech companies, labeled the deal “an anti-monopoly nightmare.” She warned that a combined Netflix-Warner Bros. entity would dominate nearly half of the streaming market, potentially resulting in higher subscription costs, fewer viewing options, and jeopardized jobs for American workers.

Warren also emphasized the need for a fair and transparent antitrust review, cautioning against any process that could open the door to undue influence or corruption.

If regulators ultimately reject the merger, Netflix would owe a $5.8 billion breakup fee. It remains uncertain whether Warner Bros. would continue independently or revisit previous acquisition offers.

Netflix Responds to Concerns

During a call with analysts, Netflix executives addressed both financial and broader industry concerns. Co-CEO Ted Sarandos expressed strong confidence in the regulatory process, describing the deal as beneficial for consumers, creators, workers, and innovation. He assured stakeholders that Netflix intends to collaborate closely with authorities to secure all necessary approvals.

Sarandos also stated that HBO would largely maintain its current operations. Furthermore, Warner Bros. will continue producing television content for other platforms, a practice Netflix has not previously engaged in but plans to support moving forward.

Future of HBO and Streaming Integration

Regarding the integration of HBO and HBO Max into Netflix’s platform, co-CEO Greg Peters indicated that it is too soon to provide specifics. However, he acknowledged the strength of the HBO brand and suggested it would play a significant role in Netflix’s future offerings.

Questions About Theatrical Releases

Amid broader worries about media consolidation, a key issue is whether Netflix will support theatrical releases for films from the combined company. Warner Bros. has enjoyed major box office success recently, while Netflix typically offers only brief theatrical runs, often bypassing major cinema chains. This difference in approach reportedly influenced the Duffer Brothers’ decision to sign an exclusive deal with Paramount.

Sarandos clarified that the acquisition would not alter Netflix’s or Warner Bros.’ approach to movie releases. He noted that Netflix has already released 30 films in theaters this year, albeit usually on a limited scale and for short durations.

He added that Warner Bros. titles slated for theatrical release would continue to debut in cinemas. However, he hinted that the traditional window between theatrical and streaming releases may shorten over time, arguing that lengthy exclusive periods are not in the best interest of consumers.