Netflix plans to add debt for $72b Warner Bros acquisition

Netflix plans to take on significant new debt as it seeks to acquire most of Warner Bros. Discovery for US$72 billion.

The deal includes US$59 billion in temporary financing from banks, with plans to replace this with up to US$25 billion in bonds, US$20 billion in term loans, and a US$5 billion revolving credit facility.

Netflix currently holds around US$15 billion in debt, but Bloomberg Intelligence estimates this could rise to US$75 billion after the acquisition.

The move comes as Paramount Skydance has launched a competing bid for Warner Bros. Discovery, valuing the company at over US$108 billion including debt.

Analysts warn that Netflix’s increased borrowing could put its investment-grade credit rating at risk.

Moody’s affirmed the company’s A3 rating but shifted its outlook to “stable” from “positive,” citing higher risk from the acquisition.

If completed, the deal would be one of the largest in media history and would significantly expand Netflix’s content portfolio.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Netflix debt signals confidence as approval risk lingers

Management is ready to lift debt from about $15 billion to as much as $75 billion, which signals that unit economics (profitability on a per-subscriber basis) work, unlike Warner Bros. Discovery’s roughly $53 billion load in 2022 that weighed on the company 1.
Antitrust approval is the hurdle, as a tie-up of Netflix and Warner Bros. Discovery’s HBO Max could trigger concerns that the combined share may top 30% 2.
Netflix frames the market to include YouTube and TikTok 2. At a UBS (a global investment bank) event it cited Nielsen’s (a media measurement firm) U.S. TV shares. YouTube 12.9%, Netflix 8.0%, Warner Bros. Discovery (WBD) 1.3%. That implies a combined 9.2% share 3.
Past media mergers closed after reviews or lawsuits. Politics remain volatile 2.

Linear TV assets sit outside the deal

Discovery Global’s linear cable channels (traditional, scheduled TV networks) sit outside the Netflix deal and will be spun off as a public company. Paramount’s David Ellison, who runs Skydance, suggested $1 per share, while WBD privately valued them near $3 4.
Regulators could require asset sales, or Netflix could later trim leverage. That could bring divestitures or licensing. Unions and theater owners warn of fewer theatrical releases, while Netflix pledges to keep current commitments 3.
Paramount has a competing all-cash bid for WBD at $30 per share that implies about $108.4 billion in enterprise value including debt, with a different asset mix if it prevails 4.