Now Streaming: Netflix, Warner Bros. amend deal to all-cash transaction

“Now Streaming” is The Fly’s weekly recap of the stories surrounding the biggest content streamers.

PLAYING THIS WEEKEND: This weekend’s most notable new streaming content is science fiction body horror series “The Beauty,” which premiered on Hulu on January 21 and stars Ashton Kutcher, Rebecca Hall, and Evan Peters. Meanwhile, Amazon Prime Video (AMZN) users can watch British heist series “Steal,” starring Sophie Turner. Additionally, Netflix (NFLX) subscribers can watch live-streamed even “Skyscraper Live,” which involves “Free Solo” climber Alex Honnold attempting to scale the Taipei 101, as well as the reboot of talent competition series “Star Search.”

NETFLIX/WARNER BROS.: On Tuesday, Netflix and Warner Bros. Discovery (WBD) announced they have amended their definitive agreement for Netflix’s pending acquisition of Warner Bros. to an all-cash transaction. The revised agreement simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote. The all-cash transaction continues to be valued at $27.75 per WBD share, unchanged from the prior transaction structure. WBD stockholders will also receive the additional value of shares of Discovery Global following its separation from WBD. The transaction will be financed through a combination of cash on hand, available credit facilities and committed financing. The amended, all-cash transaction was unanimously approved by the Boards of Directors of both Netflix and WBD. Closing remains subject to completion of the Discovery Global separation, receipt of required regulatory approvals, approval of WBD stockholders and other customary closing conditions.

Meanwhile, on Thursday, Paramount Skydance (PSKY) announced it has filed preliminary proxy materials with the U.S. Securities and Exchange Commission to solicit shareholders of Warner Bros. Discovery to vote against the amended transaction with Netflix and related proposals at the special meeting of WBD stockholders. Paramount has also extended its $30 per share all-cash tender offer to February 20, 2026, reaffirming its commitment to a transaction with WBD at a $108.4B enterprise value that is “significantly greater and far more certain than the purported $82.7B enterprise value of the Netflix transaction.”

Following the announcement, the Financial Times reported that Netflix co-CEO Greg Peters said the company is on track to win the backing of Warner Bros. shareholders for its $82.7B offer for the company. In an interview with FT, Peters said Paramount’s bid “doesn’t pass the sniff test” and only a “very small” number of Warner Bros. shares have been tendered in support of Paramount’s hostile $108B offer.

NETFLIX RESULTS: In addition to the Warner Bros. news, Netflix also reported fourth quarter results this week, with earnings per share and revenue beating consensus expectations. Looking ahead, however, the company provided a conservative outlook for Q1, as well as its revenue expectations for 12%-14% growth in FY26. Additionally, Netflix said in its quarterly investor letter that it is pausing share buybacks to help fund its pending acquisition of Warner Bros.

Following the quarterly report, no fewer than 15 analysts cut their price targets on Netflix, with Piper Sandler lowering the firm’s target to $103 from $140 but maintaining an Overweight rating. The firm noted the company reported a solid Q4 2025 print with revenues 70bps above Piper Sandler consensus and EBIT 330bps better. Meanwhile, Goldman Sachs analyst Eric Sheridan lowered the firm’s price target on Netflix to $100 from $112 with a Neutral rating, saying that while long-term prospects remain supported by content strength, margin expansion, and strategic investments, including the revised all-cash Warner Bros. Discovery transaction, greater clarity on regulatory approval, competitive dynamics, and pro-forma operating details is needed for a meaningful multiple re-rating.

DISNEY CEO: In a regulatory filing on Thursday, Disney (DIS) chairman of the board James Gorman said the media giant expects to announce the appointment of its next CEO in early 2026. “Management succession planning remains a top priority for the Board, reflecting its importance to business continuity and long-term shareholder value,” Gorman said. “Oversight of the process is led by our dedicated Succession Planning Committee, and all directors have actively participated in a rigorous and ongoing evaluation of potential successor candidates, including direct engagement, performance assessment and consideration of leadership capabilities aligned with the company’s long-term strategy. The appointment of the next CEO will be determined by the full Board, and we currently expect to announce the appointment of the company’s next CEO in early 2026.”

STOCK PLAYS: Other publicly traded companies in the space include Comcast (CMCSA), Apple (AAPL), FuboTV (FUBO), Fox (FOXA), Roku (ROKU), and AMC Networks (AMCX).