Netflix Arranges $59 Billion Loan Facility for Warner Bros.' Paramount Pursuit

Netflix has arranged a $59 billion loan facility to support Warner Bros. Discovery's acquisition pursuit of Paramount Global, according to regulatory disclosures filed this week. The credit package represents one of the largest entertainment-sector financing commitments on record and arrives as Warner assembles a $108 billion bid that Paramount's board has already rejected twice.

The loan structure surfaces as Warner Bros. Discovery—itself carrying $42 billion in net debt from the 2022 WarnerMedia-Discovery merger—attempts to acquire a target that would layer an additional $87 billion in borrowings onto the combined entity. Paramount dismissed the overture in a February 14 letter, calling the leverage "unmanageable" and the strategic rationale "unclear." Netflix's willingness to underwrite the facility suggests the streaming operator sees value in a weakened Warner competing for the same IP library bidders that Netflix courts.

The math matters because it clarifies how deep-pocketed platforms view studio assets in 2025. Warner's bid values Paramount at roughly $108 billion enterprise value, implying $21 billion in equity and $87 billion in debt assumption. Netflix's facility would cover two-thirds of the debt load, leaving Warner to syndicate or refinance the remainder. The disclosed $59 billion tranche likely carries covenants tied to asset sales—Warner has signaled it would divest Paramount's CBS broadcast stations and certain cable networks to satisfy antitrust concerns and reduce leverage.

This is the largest entertainment-sector loan disclosed since the $71 billion AT&T-Time Warner financing in 2018, which AT&T unwound four years later at a $43 billion writedown. Allocators who lived through that cycle will note the structural echo: a legacy distribution business borrowing against IP franchises whose streaming economics remain unproven at scale. Warner's existing debt matures in tranches through 2027, with $8.3 billion due before year-end 2025. Adding Paramount's liabilities would push the combined entity's gross debt above $129 billion, dwarfing the $71 billion that sank AT&T's media ambitions.

Netflix's participation is unusual. The company has not disclosed a direct lending arm, suggesting the facility runs through a third-party arranger with Netflix as cornerstone lender or guarantor. If Netflix takes a first-lien position, it gains optionality on Warner's content library in a default scenario—IP that includes HBO, DC Comics, Harry Potter, and potentially Paramount's Star Trek and Mission: Impossible franchises. For Netflix, the downside case is a discounted call option on the industry's second-largest film and television catalog.

Operators should track three near-term events. First, whether Warner files an amended bid with updated debt terms by the March 15 Paramount board meeting, which would clarify covenant structure and tenor. Second, any announcement of syndicate partners or equity co-investors, which would signal whether sovereign wealth funds or private equity see value where Paramount's board does not. Third, regulatory filings in EU and US antitrust offices, expected within 30 days if Warner formalizes the bid, which would outline required divestitures and closure timelines.

The $59 billion facility exists whether or not Paramount accepts. That tells you Netflix has already priced the scenario where Warner wins and the scenario where Warner loses.