Netflix announced it will buy Warner Bros. Discovery’s studios and streaming assets.
In this podcast, Motley Fool contributors Travis Hoium and Lou Whiteman and analyst Jason Moser discuss:
- Netflix‘s Warner Bros. Discovery deal.
- Mark Zuckerberg cuts metaverase spending.
- Where will disruption come from next?
- Stocks on their radar.
Editor’s note: This podcast was recorded before Paramount Skydance launched its competing bid to acquire Warner Bros. Discovery.
To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. When you’re ready to invest, check out this top 10 list of stocks to buy.
This podcast was recorded on Dec. 05, 2025.
Travis Hoium: Welcome to Motley Fool Money I’m Travis Hoium joined by Lou Whiteman and Jason Moser. Guys, we got to start with the news of the day. That is Netflix buying Warner Brothers Discovery or at least part of Warner Brothers’ Discovery. They’re going to be spinning off WBDs Global Networks their Discovery Global. That’s the old TV station, CNN, TNT, stuff like that. But Netflix is gonna pay $82.7 billion in total Warner Brothers Discovery shareholder. If you are a shareholder, you’re going to get $23.25 worth of cash, $4.50 in Netflix stock. Netflix is also taking out $59 billion worth of debt to finance this deal. It’s a $5.8 billion breakup fee? There’s a lot going on here, Lou. But what is your first reaction? This news came out early on Friday, and I think it was frankly surprising because it wasn’t Netflix it seemed like they were in the lead. It was paramount and paramount Sundance and Skydance? I can’t get these names correct. Suddenly, Netflix is the winner.
Lou Whiteman: In 2013, Netflix CEO Ted Sarandos said the goal is to become HBO faster than HBO can become us. Spoiler alert or what is this? Is this a surprise ending or something like what? They are going to become HBO in a weird way. But yeah, the first reaction is, wow. I think it makes sense. I can’t help but make the stupid joke. About 25 years ago, there was a market defining deal where the target had Warner in the name, and it marked the top. I think this is different, though, because I do think that AOL might have been coming from a place of desperation. Netflix sees an opportunity here. Netflix sees, I think, an amazing opportunity to get a great content library in a world where it’s getting harder for them to license because everybody has a competing product. Nobody wants to give Netflix their content anymore. Yes, it’s a lot of debt. Yes, it’s a lot of risk. Yes, we’ll see what regulators have to say. But this makes sense. I think as a consumer, I probably like this outcome, too. There’s a lot of Wow here, but I think a lot to like.
Travis Hoium: Jason, what were your thoughts when you saw this deal? I guess it made me think these annual price increases for Netflix probably even going to go a little bit further because they now really take that top position of what if you have streaming? I haven’t had cable for, I think, over a decade now. Netflix is one of those you have to have if you don’t have a cable subscription.
Jason Moser: I agree. It’s a bedrock streaming subscription for virtually every household, and I think that only becomes more the case with a deal like this. It’s funny you saw Ted Sarandos saying, I know that some of you were surprised we made this deal. We tend to like to build things rather than buy them, but they just view this as a unique opportunity as Lou said there, to go ahead and get a catalog of just some very valuable IP. Very valuable content that they know customers like. You look at Netflix, around 300 million subscribers there with HBO Max and all of this, that’s a little bit less than half of that. They’re going to add some subscribers. There’s clearly some overlap there, but they’re going to bring some new subscribers into the mix there. And more so they will have just a ton of additional content that comes with it. I think the one thing, I’m not as excited about the deal. I understand why they’re doing it. But it also makes me a little nervous from what we were talking about earlier, Travers like the Disney perspective. What I mean by that is, you think about this. Disney has a market capitalization today around $186 billion. That’s on $94.5 billion dollar in revenue and $12.3 billion in net income. Netflix, on the other hand, has around $435 billion market cap on just over $43 billion in revenue and $10.5 billion in net income. I think one of the things that’s really held Disney back over the last several years, one, I think, a few, I think they relate to the streaming game, but better late than ever, that Fox acquisition, I think, kind of set them back a little bit because it was such a large commitment. I just worry about this from Netflix’s perspective in that it is such a large commitment. It could take some time to really flow through the financials and make as much sense. But generally speaking, I do understand the move.If there’s a company that’s going to be able to execute this, I think it’s Netflix, so I get why they’re doing it.
See More
