Netflix Just Made a Smart $25 Billion Move in Its Battle to Buy Warner Bros—Here’s Why It Matters
Netflix has quietly reshuffled its massive financing deck, swapping out a chunk of its $59 billion bridge loan with more attractive long-term debt as the streaming giant pushes forward with its blockbuster bid for Warner Bros Discovery’s entertainment empire.
The Los Gatos-based company secured three new credit facilities totaling $25 billion, according to a regulatory filing dropped on Monday. The package includes a $5 billion revolving credit line and two separate delayed-draw term loans worth $10 billion each. This strategic refinancing leaves roughly $34 billion of the original bridge facility still on the table for syndication.
Why Netflix Switched Up Its Financing Strategy
Bridge loans serve a specific purpose in the deal-making world—they plug immediate financing gaps and give companies the breathing room they need to pursue major acquisitions. But they come with a catch: higher interest rates and shorter repayment windows. Smart companies don’t keep them around longer than necessary.
Netflix originally locked in the $59 billion bridge loan on December 4 to demonstrate it had the financial firepower ready for its Warner Bros bid. Now, the company replaces portions of that temporary funding with cheaper, longer-term debt that makes more financial sense.
The new revolving credit facility gives Netflix flexibility to borrow and repay cash as needed, with a maturity date set for either 2030 or three years after the deal closes—whichever comes first. The two delayed-draw term loans mature in two and three years respectively, giving the streaming service a more manageable debt schedule.
The Warner Bros Deal That’s Reshaping Entertainment
Netflix won a competitive auction for Warner Bros Discovery’s studio and streaming assets earlier this month, agreeing to a deal that values those properties at $82.7 billion. The acquisition would hand Netflix control over HBO, HBO Max, Warner Bros Studios, and a treasure trove of film and television content that could dramatically reshape the streaming landscape.
But Netflix doesn’t have a clear path to victory just yet. Paramount Skydance Corporation threw a wrench into the works by launching an unsolicited all-cash hostile takeover bid worth $108.4 billion for the entire Warner Bros Discovery operation—offering shareholders $30 per share.
Warner Bros Discovery’s board quickly shot down Paramount’s approach, calling it “inferior and inadequate” despite the higher immediate value. The board pointed to Netflix’s superior strategic benefits and more certain financing structure, reaffirming its support for the original deal.
The Money Behind the Mega-Deal
Major financial institutions line up behind Netflix’s acquisition play. Wells Fargo, BNP Paribas, and HSBC Holdings rank among the banks providing the unsecured bridge loan financing. These lenders typically use bridge loans as relationship-building tools, positioning themselves to win more lucrative advisory roles as deals progress.
Netflix brings serious financial credibility to the table. The company carries an A3 debt rating from Moody’s and an A rating from S&P Global—both solid investment-grade scores. This stands in stark contrast to Netflix’s earlier days when it relied on the junk-bond market for funding. The company earned its blue-chip status upgrade back in 2023.
Industry watchers expect Netflix to tap capital markets soon to further reduce its bridge facility and extend its debt maturities. The company’s investment-grade ratings mean it can access cheaper financing than many competitors in the entertainment space.
Regulatory Roadblocks Loom Large
Warner Bros Discovery plans to spin off its Global Networks unit during the third quarter of 2026, separating high-growth streaming and studio assets from legacy cable networks. The deal can only close after this corporate surgery completes, giving regulators and politicians plenty of time to weigh in.
Democratic Senator Elizabeth Warren of Massachusetts already branded Netflix’s bid an “anti-monopoly nightmare,” signaling potential political opposition to the acquisition. Netflix moved quickly to reassure Warner Bros staff that the deal wouldn’t trigger studio closures, trying to ease concerns about job security.
The stakes couldn’t be higher for the entertainment industry. Whether Netflix or Paramount ultimately prevails, the outcome will fundamentally reshape Hollywood’s power structure. Both rival bids involve debt deals ranking among the largest in the past decade, underscoring just how transformative this moment could prove.
What Happens Next
Netflix’s refinancing move shows the company remains confident about its prospects for closing the Warner Bros deal. Companies don’t typically replace expensive short-term bridge loans with long-term debt unless they expect transactions to go through.
The $34 billion in remaining bridge financing still needs to be syndicated among additional lenders—a process that typically unfolds over weeks or months as banks assess risk and appetite for the deal. Netflix’s strong credit ratings should make this process smoother than it might be for companies with shakier finances.
Paramount’s hostile offer adds complexity and uncertainty to the timeline. Warner Bros shareholders will need to decide whether they prefer Netflix’s strategic vision or Paramount’s higher cash offer. Either way, one of the biggest media deals in history inches closer to resolution, with billions of dollars in debt financing serving as the fuel that powers these corporate ambitions.
Frequently Asked Questions
Netflix wants to acquire Warner Bros Discovery’s studio and streaming assets to expand its content library and production capabilities significantly. The deal gives Netflix control over HBO, HBO Max, Warner Bros Studios, and decades of premium film and television content. This acquisition strengthens Netflix’s competitive position against rivals like Disney+ and Amazon Prime Video by adding established franchises and production infrastructure that would take years to build organically.
Netflix originally secured a $59 billion bridge loan to finance its Warner Bros Discovery bid, though the company now replaces portions of this temporary financing with more favorable long-term debt. Netflix recently arranged $25 billion in new credit facilities, leaving approximately $34 billion in bridge financing that still needs syndication among lenders. The total deal values Warner Bros Discovery’s entertainment assets at $82.7 billion, making this one of the largest media acquisitions in recent history.
Netflix hasn’t announced any subscription price changes directly tied to the Warner Bros Discovery acquisition. The company maintains strong investment-grade credit ratings (A3 from Moody’s and A from S&P), which allows Netflix to access relatively affordable financing for this deal. However, Netflix regularly adjusts pricing based on content investments and market conditions, so future price changes remain possible regardless of this specific acquisition. Subscribers typically see more content value when companies merge entertainment libraries.
The Netflix Warner Bros Discovery deal can only close after Warner Bros completes its planned spinoff of the Global Networks unit during the third quarter of 2026. This timeline gives regulators plenty of time to review the acquisition, and Netflix still faces potential challenges from politicians who’ve expressed antitrust concerns. Paramount’s competing $108.4 billion hostile takeover bid adds another layer of uncertainty, though Warner Bros Discovery’s board currently supports Netflix’s offer. Expect this deal to take at least 18-24 months to resolve completely.
