Paramount Offers $30 Per Share Acquisition Proposal to Warner Bros.
"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 upcoming fantasy drama television series "A Knight of the Seven Kingdoms," a prequel to "Game of Thrones," whose first episode will be streamable on HBO Maxon Sunday. Meanwhile, Paramount+users can catch the first two episodes of science fiction series "Star Trek: Starfleet Academy," while Peacocksubscribers can watch spy thriller series "Ponies," starring Emilia Clarke and Haley Lu Richardson.PARAMOUNT/WARNER BROS.:On Monday, Paramount Skydance sent a letter to shareholders of Warner Bros. Discovery outlining Paramount's next steps for delivering its "superior, fully financed, all-cash offer of $30 per share to WBD shareholders." The letter includes plans for Paramount to nominate directors for election to Warner Bros. Discovery's board. "WBD shareholders need this information to make an informed investment decision on our offer - and importantly, Delaware law has consistently required that such information be provided to shareholders," the letter reads. "Following the process prescribed under Delaware law, we filed suit this morning in Delaware Chancery Court to ask the court to simply direct WBD to provide this information so that WBD shareholders have what they need to be able to make an informed decision as to whether to tender their shares into our offer."Following the announcement, Warner Bros. Discovery told Bloomberg in a statement that Paramount is "seeking to distract" with the company's "meritless" lawsuit. Additionally, Bloomberg later reported that Netflixis working on revised terms for its Warner Bros. Discovery proposal and has discussed making its offer all cash for the purchase of the company's studios and streaming businesses, people familiar with the matter told Bloomberg's Josh Sisco and Lucas Shaw. The updated terms are designed to expedite a sale process that is expected to take months to close and has faced opposition both from politicians and competing bidder Paramount Skydance.Meanwhile, Semafor reported on Wednesday that representatives from Paramount Skydance and Netflix both met with the European Commission on Tuesday. Regulators appear to be deeply concerned with Netflix's concentration potential in several member states as both companies vie for a Warner Bros. Discovery deal.NETFLIX/SONY:On Thursday, Netflix and Sony Pictures Entertainmentannounced a global Pay-1 licensing deal. In the exclusive multi-year agreement, SPE's feature films will stream on Netflix worldwide following their full theatrical and home entertainment windows. The new global Pay-1 arrangement will roll out gradually starting later this year as individual territory rights become available, with full global availability on Netflix in early 2029. As part of this deal, Netflix will also license rights to select SPE feature film and television library titles. Netflix currently has Pay-1 rights to SPE's feature films in select territories including the U.S., Germany, and across Southeast Asia. "Our members all over the world love movies and giving them exclusive access to Sony's much loved films adds incredible value to their subscriptions," said Lauren Smith, Vice President of Licensing and Programming Strategy at Netflix.PARAMOUNT CFO:Paramount Skydance announced that Dennis Cinelli will join the company's executive leadership team as CFO, effective January 15, and as such has resigned his Board of Directors seat. Cinelli was Head of Mobility at Uber for the U.S. and Canada and CFO of Scale AI. Prior to Uber, Cinelli was with G.E. Ventures as CFO. Cinelli will succeed Andrew Warren who has served as EVP and Interim CFO since June 2025. After concluding his tenure as Interim CFO, Warren will continue to offer counsel to the company's leadership as a strategic advisor. Paramount also announced the addition of Andrew Campion, currently Chairman and CEO of Unrivaled Sports, as an independent director to the company's Board of Directors, effective as of January 13.COMCAST UPGRADE:On Monday, BofA upgraded Comcast to Buy from Neutral with a price target of $37, up from $31. The media and cable landscape enters 2026 amid significant structural change, which sets the stage for "a transformative year" marked by industry consolidation, evolving distribution strategies, and emerging opportunities across content, technology, and live experiences, the analyst tells investors. The firm believes strategic action for NBCU is "a necessity" post the Versantspin and recent deals.PRIME VIDEO/M6+:Starting Wednesday, all Amazon Primemembers in France can access M6+ free of charge and "enjoy the diverse editorial content it offers: the M6, W9, 6ter, and Gulli channels, live or on demand, as well as content exclusive to the platform. In total, it offers more than 30,000 hours of content," M6 Group announced. "We are delighted to welcome M6's high-quality programming to Prime Video. Adding the M6+ catalog to our service is an important step toward our goal of becoming the leading entertainment destination for our customers," said Elisabetta Carruba, Director of Prime Video Channels, Europe.STOCK PLAYS:Other publicly traded companies in the space include Disney, Apple, FuboTV, Fox, Roku, and AMC Networks.
Trade with 70% Backtested Accuracy
Analyst Views on NFLX
About NFLX
About the author
Netflix's Future Outlook and Challenges
- Market Dominance: Despite Netflix's stock underperforming the S&P 500 by 11% over the past year, its influence in the global entertainment industry remains strong, with projected revenues of $45 billion in 2025, reflecting a 16% annual growth rate that underscores its ongoing content creation capabilities.
- Acquisition Challenges: The all-cash acquisition of Warner Bros. for $82.7 billion may strain Netflix's liquidity, leading to a pause in stock repurchases; however, this move could solidify its leadership in the streaming market, potentially attracting investor interest.
- Slowing Revenue Growth: Netflix anticipates revenue growth to slow to 12%-14% in 2026, down from 2025's rate, which could further dampen investor sentiment, especially given its liquidity of only $9 billion, necessitating stock dilution or increased debt to finance the acquisition.
- Advertising Revenue Potential: Despite these challenges, Netflix expects its advertising revenue to nearly double by 2026, indicating significant potential for diversifying income sources, which may attract more users and enhance market share in the competitive streaming landscape.
Super Bowl LX: Seahawks Defeat Patriots 29-13
- Game Outcome: On February 8, 2026, Super Bowl LX saw the Seattle Seahawks defeat the New England Patriots 29-13, with 30 of the 42 total points scored in the fourth quarter, highlighting the game's intensity and enhancing the Seahawks' brand image.
- Ad Performance: According to USA Today's Ad Meter, brands like Anheuser-Busch, Lay's, and Dunkin' resonated well with viewers again this year, indicating effective emotional and comedic messaging strategies that continue to engage audiences.
- Viewer Feedback: Some ads featuring AI tools failed to win over viewers, reflecting a limited acceptance of technology-driven advertising among consumers, suggesting that companies need to reassess their advertising strategies to improve effectiveness.
- Market Impact: The Super Bowl remains a crucial platform for brand marketing, where successful ads can significantly boost brand visibility and directly influence sales performance, prompting companies to increase their advertising budgets in future campaigns.
Netflix's $72 Billion Warner Bros. Deal Faces Antitrust Hurdles
- Acquisition Challenges: Netflix's $72 billion bid for Warner Bros. Discovery faces significant antitrust scrutiny, particularly in Europe, which could hinder its market expansion strategy and affect investor confidence.
- Potential ESPN Acquisition: Should the Warner Bros. deal collapse, Netflix may pivot to acquiring ESPN, which only contributed 19% of Disney's revenue in fiscal 2025 and has seen a 25% drop in operating profit, potentially allowing Netflix to reduce content costs significantly.
- Investment in Sports Content: Netflix is making substantial investments in live sports, including exclusive NFL Christmas games starting in 2024, indicating a strategic focus on sports content to attract more subscribers and enhance platform differentiation.
- Market Reaction: Since Netflix announced its pursuit of Warner Bros., its stock has declined; if the acquisition fails, the market may respond positively to a smaller ESPN deal, enhancing Netflix's content competitiveness and user experience.
Netflix Faces Challenges in Warner Bros. Acquisition
- Acquisition Obstacles: Netflix's plan to acquire Warner Bros. Discovery for $72 billion faces antitrust scrutiny, particularly in Europe, which could delay or derail the deal, impacting its market expansion strategy.
- Potential ESPN Acquisition: Should the Warner Bros. deal fall through, Netflix may consider acquiring Disney's ESPN, which accounted for only 19% of Disney's $94.4 billion revenue in fiscal 2025, indicating its underperformance and potential as a strategic asset for Netflix.
- Increased Sports Investment: Netflix has begun significant investments in live sports, becoming the exclusive broadcaster of NFL games on Christmas, demonstrating its commitment to content diversification and user engagement, which could enhance customer retention.
- Market Reaction: Since announcing the Warner Bros. acquisition, Netflix's stock has declined, and a pivot to acquiring ESPN could be viewed favorably by the market, potentially improving its content cost structure and enhancing competitiveness.
Disney's Streaming Business Reaches Profit Turning Point
- Profitability Surge: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a significant rebound from a cumulative loss of $4.6 billion in 2020 and 2021, demonstrating the sustainability and market appeal of its business model.
- User Growth Strategy: Leveraging powerful intellectual properties like Pixar, Star Wars, and Marvel, Disney rapidly expanded its subscriber base, with projected operating profits of $500 million in Q2 2026, reflecting a $200 million increase from the previous year and showcasing its competitive edge in the streaming market.
- Attractive Market Valuation: Disney's stock is currently trading at a forward price-to-earnings ratio of 16.2, below the S&P 500's 22.2 multiple, indicating that the market has yet to fully digest its transition, potentially offering an attractive buying opportunity for investors.
- Future Growth Expectations: The company's leadership anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues into fiscal 2027 and beyond, the profitability of its streaming business could drive a bull run in its stock price.
Disney's Streaming Profits Surge Amid 48% Stock Decline: Is a Bull Run Ahead?
- Streaming Business Transformation: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a successful turnaround from a cumulative loss of $4.6 billion in 2020 and 2021, indicating strong recovery potential in the streaming market.
- User Growth Strategy: By integrating platforms like Disney+, Hulu, and ESPN, Disney rapidly expanded its subscriber base, leveraging its powerful intellectual property to attract global audiences, thereby enhancing market competitiveness and reducing churn rates.
- Attractive Market Valuation: Disney's forward price-to-earnings ratio stands at 16.2, below the S&P 500's 22.2 multiple, suggesting that the current stock price may be undervalued, providing potential buying opportunities for investors.
- Future Growth Expectations: The company anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues, combined with rising streaming profits, Disney's stock could be poised for a bull run.
Netflix's Future Outlook and Challenges
- Market Dominance: Despite Netflix's stock underperforming the S&P 500 by 11% over the past year, its influence in the global entertainment industry remains strong, with projected revenues of $45 billion in 2025, reflecting a 16% annual growth rate that underscores its ongoing content creation capabilities.
- Acquisition Challenges: The all-cash acquisition of Warner Bros. for $82.7 billion may strain Netflix's liquidity, leading to a pause in stock repurchases; however, this move could solidify its leadership in the streaming market, potentially attracting investor interest.
- Slowing Revenue Growth: Netflix anticipates revenue growth to slow to 12%-14% in 2026, down from 2025's rate, which could further dampen investor sentiment, especially given its liquidity of only $9 billion, necessitating stock dilution or increased debt to finance the acquisition.
- Advertising Revenue Potential: Despite these challenges, Netflix expects its advertising revenue to nearly double by 2026, indicating significant potential for diversifying income sources, which may attract more users and enhance market share in the competitive streaming landscape.
Super Bowl LX: Seahawks Defeat Patriots 29-13
- Game Outcome: On February 8, 2026, Super Bowl LX saw the Seattle Seahawks defeat the New England Patriots 29-13, with 30 of the 42 total points scored in the fourth quarter, highlighting the game's intensity and enhancing the Seahawks' brand image.
- Ad Performance: According to USA Today's Ad Meter, brands like Anheuser-Busch, Lay's, and Dunkin' resonated well with viewers again this year, indicating effective emotional and comedic messaging strategies that continue to engage audiences.
- Viewer Feedback: Some ads featuring AI tools failed to win over viewers, reflecting a limited acceptance of technology-driven advertising among consumers, suggesting that companies need to reassess their advertising strategies to improve effectiveness.
- Market Impact: The Super Bowl remains a crucial platform for brand marketing, where successful ads can significantly boost brand visibility and directly influence sales performance, prompting companies to increase their advertising budgets in future campaigns.
Netflix's $72 Billion Warner Bros. Deal Faces Antitrust Hurdles
- Acquisition Challenges: Netflix's $72 billion bid for Warner Bros. Discovery faces significant antitrust scrutiny, particularly in Europe, which could hinder its market expansion strategy and affect investor confidence.
- Potential ESPN Acquisition: Should the Warner Bros. deal collapse, Netflix may pivot to acquiring ESPN, which only contributed 19% of Disney's revenue in fiscal 2025 and has seen a 25% drop in operating profit, potentially allowing Netflix to reduce content costs significantly.
- Investment in Sports Content: Netflix is making substantial investments in live sports, including exclusive NFL Christmas games starting in 2024, indicating a strategic focus on sports content to attract more subscribers and enhance platform differentiation.
- Market Reaction: Since Netflix announced its pursuit of Warner Bros., its stock has declined; if the acquisition fails, the market may respond positively to a smaller ESPN deal, enhancing Netflix's content competitiveness and user experience.
Netflix Faces Challenges in Warner Bros. Acquisition
- Acquisition Obstacles: Netflix's plan to acquire Warner Bros. Discovery for $72 billion faces antitrust scrutiny, particularly in Europe, which could delay or derail the deal, impacting its market expansion strategy.
- Potential ESPN Acquisition: Should the Warner Bros. deal fall through, Netflix may consider acquiring Disney's ESPN, which accounted for only 19% of Disney's $94.4 billion revenue in fiscal 2025, indicating its underperformance and potential as a strategic asset for Netflix.
- Increased Sports Investment: Netflix has begun significant investments in live sports, becoming the exclusive broadcaster of NFL games on Christmas, demonstrating its commitment to content diversification and user engagement, which could enhance customer retention.
- Market Reaction: Since announcing the Warner Bros. acquisition, Netflix's stock has declined, and a pivot to acquiring ESPN could be viewed favorably by the market, potentially improving its content cost structure and enhancing competitiveness.
Disney's Streaming Business Reaches Profit Turning Point
- Profitability Surge: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a significant rebound from a cumulative loss of $4.6 billion in 2020 and 2021, demonstrating the sustainability and market appeal of its business model.
- User Growth Strategy: Leveraging powerful intellectual properties like Pixar, Star Wars, and Marvel, Disney rapidly expanded its subscriber base, with projected operating profits of $500 million in Q2 2026, reflecting a $200 million increase from the previous year and showcasing its competitive edge in the streaming market.
- Attractive Market Valuation: Disney's stock is currently trading at a forward price-to-earnings ratio of 16.2, below the S&P 500's 22.2 multiple, indicating that the market has yet to fully digest its transition, potentially offering an attractive buying opportunity for investors.
- Future Growth Expectations: The company's leadership anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues into fiscal 2027 and beyond, the profitability of its streaming business could drive a bull run in its stock price.
Disney's Streaming Profits Surge Amid 48% Stock Decline: Is a Bull Run Ahead?
- Streaming Business Transformation: Disney's direct-to-consumer streaming segment achieved an operating profit of $1.3 billion in fiscal 2025, marking a successful turnaround from a cumulative loss of $4.6 billion in 2020 and 2021, indicating strong recovery potential in the streaming market.
- User Growth Strategy: By integrating platforms like Disney+, Hulu, and ESPN, Disney rapidly expanded its subscriber base, leveraging its powerful intellectual property to attract global audiences, thereby enhancing market competitiveness and reducing churn rates.
- Attractive Market Valuation: Disney's forward price-to-earnings ratio stands at 16.2, below the S&P 500's 22.2 multiple, suggesting that the current stock price may be undervalued, providing potential buying opportunities for investors.
- Future Growth Expectations: The company anticipates double-digit adjusted earnings per share growth this fiscal year, and if this trend continues, combined with rising streaming profits, Disney's stock could be poised for a bull run.
