In December, Netflix reached an agreement to acquire the streaming, television and movie production assets of Warner Bros. Discovery for an enterprise value of $82.7 billion. The deal transfers control of landmark franchises—including the Harry Potter and DC Comics libraries—into Netflix’s content portfolio, positioning the company to boost its global market share in the increasingly competitive over-the-top video space. As part of the transaction, Netflix will receive operational control of HBO Max, Discovery+ and other flagship channels, while Warner Bros. Discovery shareholders will retain newly spun-off cable assets under the name Discovery Global.

To fund the takeover, Netflix has committed to adding roughly $60 billion of new debt to its balance sheet, a level that would mark one of the largest leveraged financing packages in streaming history. Credit agencies have already begun reviewing the company’s ratings, with at least one major provider placing Netflix on negative watch due to potential covenant pressures. Management has signaled that it will refinance existing bonds and pursue new term loans to lock in favorable rates, but higher leverage could strain free cash flow in the near term and limit financial flexibility for original production spending.

Since the formal announcement of the Warner Bros. Discovery transaction on December 5, Netflix’s share price has fallen by nearly 10 percent, reflecting concerns over integration risks and the increased leverage burden. Trading volume spiked by more than 25 percent on announcement day, and option-adjusted implied volatility shot up to multi-year highs. Several sell-side analysts cut earnings forecasts for fiscal 2026, trimming operating income projections by an average of 8 percent as they model higher interest expense and one-time acquisition costs.

Netflix’s proposed deal faces substantial antitrust scrutiny in both the United States and Europe, where regulators have already opened preliminary inquiries into the combined firm’s market share in scripted television and direct-to-consumer streaming. U.S. authorities are examining whether the acquisition would violate competition laws by concentrating too much intellectual property under a single platform. In the European Union, requests for additional economic impact studies have extended the review timeline by at least three months. A protracted approval process could delay closing past the second quarter of 2026, or require divestitures of overlapping content rights.