The Rundown Deep Dive: The Economics Behind Netflix’s Warner Bros. Acquisition
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Dec 7, 2025 Netflix's monumental $83 billion acquisition of Warner Bros and HBO is under the microscope. The discussion explores the implications of taking on $75 billion in debt and the mixed reactions from Wall Street. Zaid delves into competitive pressures, particularly from Paramount, and potential regulatory hurdles. Insights into subscriber growth, iconic intellectual property, and advertising opportunities present both optimistic and cautious perspectives. Ultimately, the analysis balances bullish potential against long-term risks for investors.
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From DVDs To Hollywood Powerhouse
- Zaid Admani recounts Netflix's rise from DVDs to streaming and original hits like House of Cards.
- He uses the history to show how Netflix evolved into a Hollywood powerhouse before the Warner deal.
Targeted Acquisition Of High-Value Assets
- Netflix's $82.7B enterprise bid buys studios, HBO and IP but not cable channels.
- The deal isolates high-value content while shedding declining cable assets into Discovery Global.
Expensive Purchase And Heavy Debt Load
- Netflix paid roughly 27x EBITDA to acquire Warner's entertainment division, far above peers.
- That high multiple plus $75B total debt materially raises investor risk and interest obligations.