This analysis was first published in SvD Näringsliv, in Swedish, on December 9th, 2025. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
What would you pay to hobble your worst competitor? Netflix’s answer to that question is 54 billion kronor. And should Warner Bros pull out of the deal — Netflix gets a sizeable Christmas bonus either way. The losers, whichever way it goes, are viewers.
The American media world currently resembles a middle-school disco.
First nobody wants to dance. Then everybody wants to dance — but with the same person. You might have expected deals in the hundreds-of-billions bracket to be a little more sophisticated than that, but no.
Warner Bros CEO David Zaslav has agreed to sell HBO and Warner Studios to Netflix. Immediately afterwards came a higher, hostile bid from Paramount Skydance. It is going to get messy. But everything points to Netflix being the big winner — whatever the outcome.
To understand Netflix’s strategy behind the mega-deal, all you need to do is look at one particular point in the purchase agreement. It is called a “breakup fee” — a sum of money that the buyer, Netflix, pays to the seller if the deal does not go through.
For large deals of this calibre — what Warner Bros is selling is valued at over 780 billion kronor including debt — there is significant political risk. Competition issues are sensitive, particularly when it comes to media.
For TV companies the matter would have been handled by the FCC — the Federal Communications Commission — but since this deal does not cover ordinary TV channels, it falls outside their remit. Instead it will be the US Department of Justice and the FTC, the Federal Trade Commission, that will scrutinise the deal.
And one more person, of course. Donald Trump.
His son-in-law Jared Kushner is investing alongside Paramount Skydance, which in turn is owned by Trump’s friend and supporter Larry Ellison. Warner Bros also owns the TV channel CNN, which is not Trump’s favourite. There are many relationships that could come to play a role in this decision.
If any of these political institutions were to block the deal, Netflix would need to pay a breakup fee of around 54 billion kronor to Warner Bros. That might sound like a lot, but one should bear in mind that Netflix has a market capitalisation of just under 4,000 billion kronor. And before you judge whether something is expensive, you should look at what they get for the money.
Political processes of this nature are long and drawn-out. If we look at another major media deal involving the same company — when AT&T bought Time Warner — it took 20 months before it was concluded. A reasonable guess is that this could take at least a year, if the deal is not called off beforehand.
During that time, HBO and Warner Studios will be in limbo. No major investments and changes are likely to happen while they await the new owners. A great deal of management’s time will be spent trying to get the deal approved rather than developing the business. For a market leader like Netflix, that is worth its weight in gold. Or rather — it could well be worth 54 billion kronor.
If the deal goes through and Netflix gets what it wants, they will have become the overwhelmingly dominant player in the streaming market. If the deal does not go through, they will have paid a little over one percent of their market capitalisation to ensure that their main competitor HBO has wasted a year on political paperwork.
But there is yet another way this could end. Should Warner Bros decide to accept Paramount Skydance’s new, higher bid after all — they would also need to pay a breakup fee, but in the other direction.
Netflix would then receive half — 27 billion kronor — as a consolation prize for Warner changing its mind. A decent Christmas bonus? The whole thing is very elegantly played by Netflix’s management, with CEO Ted Sarandos at the helm.
For Netflix or HBO viewers, nothing will be noticeable for the coming year at least. These are two separate services that will try to sign you up as a subscriber, just as before. But looking at a slightly longer horizon, the number of streaming services will in all likelihood decrease. Paramount Skydance clearly has big ambitions and will not give up even if they fail to push through this particular deal. Fewer services means less competition, which in turn could lead to higher prices. Consolidation of this kind rarely benefits viewers.
The winner in all of this — somewhat regardless of how it plays out — therefore looks set to be Netflix. But before they celebrate too much, one should carry a little media history into the room. Enormous deals in this category tend not to age particularly well. The aforementioned AT&T and Time Warner is one example. AOL and Time Warner another. An extraordinary number of billions have gone up in smoke when excessive confidence in the future has been allowed to steer.
And it seems Netflix is not immune to that either.
