Just one day after Netflix announced its 82.7 billion dollar deal to acquire Warner Bros., the acquisition is already being described as sending Hollywood into full-blown panic mode. Critics are calling it a possible death blow to theatrical filmmaking and maybe even the end of Hollywood itself.
Some of the firmest opposition has come from the Writers Guild of America, which issued a statement declaring this merger must be blocked. The guild argued that the world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent. They warned the outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers.
While statements from other Hollywood unions were not quite as unequivocal, they still suggested there are many serious questions about the acquisition’s impact on the future of the entertainment industry, as the actors union SAG-AFTRA put it.
The deal came after a competitive process in which Paramount and Comcast also submitted bids. Paramount was trying to acquire the entire company, while Netflix will only buy the film and television studios, as well as the streaming business, after Warner Bros. moves forward with a plan to spin off its TV networks division.
Initially, Paramount was seen as the frontrunner, with its ties to the Trump administration easing the way for regulatory approval. But even before the Netflix deal was announced, Paramount’s lawyers sent an angry letter complaining about a tilted and unfair process, and Netflix soon emerged publicly as the winner.
This deal, which is expected to close in the third quarter of 2026, would presumably face significant regulatory scrutiny, and not just from Trump appointees. Senator Elizabeth Warren, a Democrat from Massachusetts and longtime critic of Big Tech, put out a statement describing the deal as an anti-monopoly nightmare. She argued a Netflix-Warner Bros. merger would create one massive media giant with control of close to half of the streaming market, threatening to force Americans into higher subscription prices and fewer choices. She also stated that antitrust enforcement must be conducted fairly and transparently rather than used to invite influence-peddling and bribery.
If the government ultimately blocks the acquisition, Netflix would be required to pay a 5.8 billion dollar breakup fee. It is not clear whether Warner Bros. would then continue operating as an independent company or would reconsider the previous acquisition offers.
Netflix held an analyst call to discuss the deal, and while many questions focused on the financial impact, executives also attempted to address larger concerns. Co-CEO Ted Sarandos said he is highly confident in the regulatory process, calling the deal pro-consumer, pro-innovation, pro-worker, pro-creator, and pro-growth. He stated Netflix plans to work closely with all appropriate governments and regulators to get the necessary approvals.
Sarandos also said Netflix intends to keep HBO operating largely as it is. He added that Warner Bros. would continue producing TV shows for other networks and streaming services, something Netflix has not done in the past, because they want to keep that successful business operating.
Regarding how HBO and HBO Max would be integrated into the Netflix app, co-CEO Greg Peters said it is too early for specifics. He noted the HBO brand is very powerful for consumers and would constitute a part of their plans.
Beyond general consolidation concerns, perhaps the biggest question is to what extent Netflix will support theatrical releases for the combined entity’s films. This comes after Warner Bros. had a record-setting run of box office success this year, while Netflix’s theatrical releases typically last only a couple weeks and skip major chains due to limited exclusive windows. This issue was reportedly the deciding factor when the creators of Stranger Things signed an exclusive deal with Paramount.
Sarandos said he would not look at this as a change in approach for Netflix movies or for Warner movies. He noted Netflix has released 30 movies in theaters this year, though usually on fewer screens for a limited time. He stated everything planned for theatrical release through Warner Bros. will continue to go to theaters. But in the long term, he suggested the windows will evolve so that movies come to streaming more quickly, as he views long exclusive windows as not consumer friendly.