What matters:
- Strategic signaling: Submitting a bid instantly places Netflix in the same acquisition arena as Amazon and Apple. In other words, it’s good PR.
- Access to real diligence: A signed agreement gives Netflix a look inside WBD’s business. Even if everything falls apart, the information has value.
- Pressure on competitors: The bid forces others to act or sit still. Netflix gets to watch how serious each player is.
- Reverse fee as escape valve: A large break fee functions like insurance. If regulators turn the deal into a grind, Netflix can pay the fee and walk away without carrying the wreckage.
- Positioning for the aftermath: If the process damages WBD’s stock and the deal collapses, Netflix has a cleaner path to revisit individual assets later.
- Regulatory posturing: Even if the deal never closes, the offer forces agencies to treat Netflix as a potential consolidator. By proposing to buy all of WBD, Netflix shifts the Overton window by anchoring the conversation at “full acquisition.” Whatever pushback Netflix gets now becomes the map for every deal it tries later.
All of this happens before a single regulator approves anything.
The reverse fee is the cost of the offer, which is roughly 1 percent of Netflix’s market cap.
In practice, that’s the price of buying information at scale, along with the PR and regulatory positioning that come bundled with the offer.