Netflix has prevailed in its bid to buy Warner Bros., agreeing to pay $72 billion for the Burbank-based Warner Bros. film and television studios, HBO Max and HBO.

The two companies announced the blockbuster deal early Friday morning. The takeover would give Netflix such beloved characters as Batman, Harry Potter and Fred Flintstone.

“Our mission has always been to entertain the world,” Ted Sarandos, co-CEO of Netflix, said in a statement. “By combining Warner Bros.’ incredible library of shows and movies — from timeless classics like ‘Casablanca’ and ‘Citizen Kane’ to modern favorites like ‘Harry Potter’ and ‘Friends’ — with our culture-defining titles like ‘Stranger Things,’ ‘KPop Demon Hunters’ and ‘Squid Game,’ we’ll be able to do that even better.”

Netflix’s cash and stock transaction is valued at about $27.75 per Warner Bros. Discovery shares. Netflix also agreed to take on more than $10 billion in Warner Bros. debt, pushing the deal’s value to $82.7 billion.

The breakthrough came earlier this week, after the three contenders — Netflix, Paramount and Comcast — submitted binding second-round offers. Netflix’s victory was assured by late Thursday, soon after another deadline for last-minute deal sweeteners. Netflix and Warner’s boards separately and unanimously approved the transaction.

Warner’s cable channels, including CNN, TNT and HGTV, are not included in the deal. They will form a new publicly traded company, Discovery Global, in mid-2026.

Anti-trust experts anticipate opposition to Netflix’s proposed takeover. Netflix has more than 300 million streaming subscribers worldwide, and with HBO Max, the company’s base would swell to more than 420 million subscribers — a staggering sum much greater than any of the other premium video-on-demand streaming services.

In addition, Netflix has long prioritized releasing movies to its streaming platform — bypassing movie theater chains.

The deal posed “an unprecedented threat to the global exhibition business,” Cinema United, a trade group representing owners of more than 50,000 movie screens, said in a statement announcing its opposition.

“The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,” said Cinema United President Michael O’Leary said in a statement. “Netflix’s stated business model does not support theatrical exhibition.”

Netflix, in the statement, said it would maintain Warner Bros. operations, including theatrical releases for Warner Bros. films.

The Directors Guild of America said the proposed combination “raises significant concerns.”

“A vibrant, competitive industry — one that fosters creativity and encourages genuine competition for talent — is essential to safeguarding the careers and creative rights of directors and their teams,” the DGA spokesperson said. “We will be meeting with Netflix to outline our concerns and better understand their vision for the future of the company.”

Losing the auction is a crushing blow for Paramount’s David Ellison, the 42-year-old tech scion who envisioned building a juggernaut with the two storied movie studios, HBO and two dozen cable channels.

One month after buying Paramount, he set its sights on Warner Bros., triggering the auction with a series of unsolicited bids in September and early October.

But Warner Bros. Discovery’s board rejected Paramount’s offers as too low. In late October, the board opened the auction up to other bidders.

Comcast also leaped into the bidding for Warner’s studios, HBO and its streaming service. Comcast wanted to spin off its NBCUniversal media assets and merge them with Warner Bros. to form a new jumbo studio.

Warner Bros. Discovery has modified Chief Executive David Zaslav’s contract for a second time this year to prepare for the company’s proposed breakup.

This month’s alterations were outlined in an SEC filing on Thursday — a week before initial bids are due in the Warner Bros. Discovery auction. Industry sources expect Paramount, Comcast and Netflix to make offers for the embattled entertainment company that owns HBO, CNN, Food Network and the storied Warner Bros. movie and television studios.

Warner Bros. Discovery declined to comment.

The sale kicked off in September when David Ellison-led Paramount made an unsolicited offer for Warner Bros. Discovery — a month after Ellison and RedBird Capital Partners had acquired Paramount from the Redstone family in an $8-billion deal. The company since has made at least three bids — but all were unanimously rejected by the Warner Bros. Discovery board, which viewed them as too low.

Paramount’s most recent solicitation for Warner Bros. Discovery was for $23.50 per share, which would value the company at about $58 billion.

The external jockeying for Warner Bros. Discovery set the stage for Zaslav and the Warner board to amend his employment agreement. The contract was revised Nov. 7 to clarify that various spin-off configurations would result in the same incentives for Zaslav.

Previously, his contract was amended to outline his compensation and incentives should the Warner Bros. studios and HBO Max spin off from the parent company, as envisioned when Warner announced its breakup plans in June. At the time, Zaslav planned to stay on to run the studios and streaming company, which would be called Warner Bros. in a nod to its historic roots and the pioneering days of the movie industry.

The plan was for the company’s two dozen cable networks, including CNN, TNT, Animal Planet and TLC, to remain behind and the company renamed Discovery Global.

The company is forging ahead with its breakup plans. However, it now plans to spin off the cable channels (Discovery Global) and keep the studios, HBO and the HBO Max streaming service as the surviving corporate entity (Warner Bros.).

“The amendment clarifies that if the separation is achieved by retaining Warner Bros. and spinning off Discovery Global (a ‘Reverse Spinoff’) rather than spinning off Warner Bros. … the Reverse Spinoff will be treated in the same manner … for all purposes of the Zaslav arrangements,” the filing said.

Previously, the company had envisioned that the split would be complete by Dec. 31, 2026. But a full-blown auction could upset those plans — and the transaction could close at a later date.

Zaslav’s contract was modified to extend his employment through December 2030. Previously, his contract was set to expire in December 2027.

“This extension is intended to secure Mr. Zaslav’s leadership of WBD for the same period that we had contracted to have him serve as the chief executive officer of Warner Bros. following a separation,” the filing said.

The Wall Street Journal was the first to report that nonbinding preliminary bids for the company are due Nov. 20.

Paramount, backed by billionaire Larry Ellison and his family, has officially opened the bidding for rival Warner Bros. Discovery — a potential massive merger that would dramatically change Hollywood.

Warner Bros. Discovery’s board rejected Paramount’s initial bid of about $20 a share, but talks are continuing, according to two people close to the companies who were not authorized to speak publicly.

One of the knowledgeable sources said Paramount was preparing a second bid.

Warner Bros. Discovery owns HBO, CNN, TBS, Food Network, HGTV and the prolific Warner Bros. movie and television studio in Burbank.

Ellison, one of the world’s richest men, is committed to helping his 42-year-old son, David, pull off the industry-reshaping acquisition and has agreed to help finance the bid, two people close to the situation said.

The younger Ellison, who entered the movie business 15 years ago by launching his Skydance Media production company, was catapulted into the major leagues this summer with the Ellison family’s purchase of Paramount’s controlling stake.

Since then, David Ellison and his team have made bold moves to help Paramount shake more than a decade of doldrums. Buying Warner Bros. Discovery would be their most audacious move yet. The merger would lead to the elimination of one of the original Hollywood film studios, and could see the consolidation of CNN with Paramount-owned CBS News.

Representatives for Paramount and Warner Bros. Discovery declined to comment.

CNBC reported Friday that two companies have been in discussions for weeks following last month’s news that Paramount was planning a bid. Bloomberg reported Saturday that Warner Bros. Discovery had rejected Paramount’s bid of about $20 a share.

Industry veterans were stunned by the speed of Paramount’s play for Warner Bros. Discovery, noting that top executives had begun working on the bid even as they were putting finishing touches on the Paramount takeover.

One of Paramount’s top executives is a former Goldman Sachs banker, Andy Gordon, who was a ranking member of RedBird Capital Partners, the private equity firm that has teamed up with the Ellisons and has a significant stake in Paramount.

Paramount’s interest prompted stocks of both companies to soar, driving up the market value for Warner Bros. Discovery.

Paramount’s offer of $20 a share for Warner Bros. Discovery was less than what some analysts and sources believe the company’s parts are worth, leading the Warner Bros. Discovery board to rebuff the offer, sources said.

But many believe that Paramount needs more content to better compete in a landscape that’s dominated by tech giants such as Netflix and Amazon.

Paramount has reason to move quickly.

Warner Bros. Discovery had previously announced that it was planning to divide its assets into two companies by next April. One company, Warner Bros., would be made up of HBO, the HBO Max streaming service and the Burbank-based movie and television studios. Current Chief Executive David Zaslav would run that enterprise.

The other arm would be called Discovery Global and consist of the linear cable television channels, which have seen their fortunes fall with consumers’ shift to streaming.

The Paramount bid was seen as an attempt to slip in under the wire because other large companies, including Amazon, Apple and Netflix, may have been interested in buying the studios, streaming service and leafy studio lot in Burbank.

However, Netflix’s co-chief executive Greg Peters appeared to downplay Netflix’s interest during an appearance last week at the Bloomberg Screentime media conference. “We come from a deep heritage of being builders rather than buyers,” Peters said.

Some analysts believe Paramount’s proposed takeover of Warner Bros. Discovery could ultimately prevail because Zaslav and his team have made huge cuts during the past three years to get the various businesses profitable after buying the company from AT&T, which left the company burdened with a heavy debt load. The company has paid down billions of dollars of debt, but still carries nearly $35 billion of debt on its books.

Others point to Warner Bros.’ recent successes at the box office as evidence that Paramount is offering too little.

Despite the tumult at the corporate level, Warner Bros.’ film studio has had a successful year. Its fortunes turned around in April with the release of “A Minecraft Movie,” which grossed nearly $958 million worldwide, followed by a string of hits including Ryan Coogler’s “Sinners,” James Gunn’s “Superman” and horror flick “Weapons.”

Meanwhile, Paramount has been on a buying spree.

Just in the last two months, Paramount made a $7.7 billion deal for UFC media rights and closed two deals that will pay the creators of “South Park” more than $1.25 billion over five years to secure streaming rights to the popular cartoon.

Last week at Bloomberg’s Screentime media conference, Ellison declined to comment on Paramount’s pursuit of Warner Bros. or even whether his company had already made a bid. But he did touch briefly on consolidation in Hollywood, saying, “Ironically, it was David Zaslav last year who said that consolidation in the media business is important.”

“There are a lot of options out there,” he added, but declined to elaborate.

After news of Paramount’s interest surfaced, Warner Bros. Discovery‘s stock jumped more than 30%. It climbed as much as $20 a share, but closed Friday at $17.10, down 3.2%.

Paramount also has seen its stock surge by about 12%. Shares finished Friday at $17, down 5.4%

Warner Bros. Discovery is now valued at $42 billion. Paramount is considerably smaller, worth about $18.5 billion.