Netflix announced significant developments regarding its acquisition of Warner Bros. Discovery, converting the deal into an all-cash transaction valued at $27.75 per share while simultaneously revealing robust growth in its advertising business. The streaming giant disclosed that its ad revenue reached $1.5 billion in 2025, representing more than 2.5 times growth from the previous year, signaling the increasing importance of its advertising-supported tier to overall revenue generation.
The amendment to the WBD acquisition agreement marks a strategic shift designed to provide greater certainty and accelerate the path to closing. Originally structured as a cash-and-stock deal valued at approximately $82.7 billion in equity value, the revised all-cash structure eliminates market-based variability and simplifies execution. By removing stock components, Netflix has addressed concerns about market fluctuations that could have complicated the transaction’s completion.
“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 stated in communications to shareholders. The company expects WBD shareholders to vote on the proposal by April 2026, an accelerated timeline that reflects Netflix’s commitment to moving the transaction forward despite competitive pressures and regulatory scrutiny. WBD filed its preliminary proxy statement with the Securities and Exchange Commission on January 20, 2026, to support this expedited process.
Netflix co-CEO Ted Sarandos emphasized the strategic rationale behind the acquisition, describing WBD’s century-old entertainment legacy and extensive library as an “accelerant” to Netflix’s broader content strategy. The deal encompasses Warner Bros.’ studios and streaming assets, excluding the linear television business, which will separate as Discovery Global prior to closing. The transaction is expected to conclude within 12 to 18 months from the original agreement date, subject to regulatory approvals and customary closing conditions.
The all-cash approach reflects Netflix’s financial strength and disciplined capital allocation framework. The company will finance the transaction through a combination of cash on hand, available credit facilities, and committed financing from financial partners including Wells Fargo, BNP, and HSBC. Notably, the financing structure is not subject to Committee on Foreign Investment in the United States (CFIUS) review, streamlining the approval process.
For out-of-home advertising stakeholders, Netflix’s growing ad revenue carries particular significance. The company’s advertising tier has emerged as a substantial revenue driver, and the WBD acquisition would integrate HBO’s premium content and subscriber base with Netflix’s advertising platform. Sarandos highlighted plans to develop WBD’s intellectual property and leverage HBO Max to create personalized, flexible subscription plans, indicating that advertising monetization will play a central role in the combined entity’s strategy.
Netflix and WBD have both submitted Hart-Scott-Rodino filings and are actively engaging with competition authorities, including the U.S. Department of Justice and the European Commission. Both company boards unanimously approved the amended transaction, reinforcing their commitment despite ongoing takeover attempts by Paramount Skydance, which has pursued a hostile acquisition of WBD through multiple unsuccessful bids rejected by WBD’s board.
The all-cash amendment strategy appears designed to create execution certainty in a complex entertainment landscape. By locking in value at $27.75 per share in cash, plus value from Discovery Global’s planned separation, Netflix provides WBD stockholders with financial clarity while maintaining its own balance sheet strength and investment-grade credit ratings.
Netflix’s revised approach demonstrates how the company is leveraging its balance sheet strength and financial discipline to pursue transformative acquisitions while simultaneously building its advertising business into a meaningful revenue stream. The convergence of these developments—the accelerated all-cash deal structure and robust advertising growth—reflects Netflix’s evolving business model and its ambitions to compete across multiple revenue channels in the increasingly competitive media landscape.