How Netflix Won Hollywood's Biggest Prize, Warner Bros Discovery

By Shaina Mishkin

It has been a tough few years for home buyers, but there's a glimmer of hope for 2026. Two new forecasts say home prices will rise modestly next year: Redfin expects a 1% price increase nationally, while Realtor.com sees a 2.2% gain. Both anticipate prices growing slower than wages, and mortgage rates averaging 6.3%. Redfin predicts a 3% lift in sales, while Realtor.com estimates 1.7%. ( Barron's parent News Corp runs Realtor.com.)

But location, of course, is everything. Prices in September continued to rise in Northeastern and Midwestern metros tracked by S&P Cotality Case-Shiller Home Price Indices, and slid in Sunbelt metros like Phoenix, Dallas, and Miami. It's what S&P Dow Jones Indices' Nicholas Godec calls a "tale of two markets."

Realtor.com forecasts that 2026 prices will fall below year-ago levels in 22 of 100 metro areas. Two Florida locales, Cape Coral and North Port, lead in anticipated declines, with 10.2% and 8.9% price drops, respectively. In October, active listings in both metros were 13.3% higher than 2024, which probably fuels expectation of softer prices.

Elsewhere, prices will climb. Metros with the largest anticipated gains include some of the most affordable housing markets: Toledo, Ohio (13.1%); Syracuse, N.Y. (12.4%); and Scranton, Pa. (10.9%). October listing prices in all three areas were below $300,000, according to Realtor.com — well under the national $424,200 median.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

Last Week

Markets

Bitcoin continued to swoon, falling 6% on Monday, leading global stocks and bonds down. U.S. stocks fell, with the Dow industrials down nearly a point, then rallied amid volatility on hopes for a Federal Reserve rate cut. ADP said the economy lost 32,000 jobs in November, and late-November jobless claims fell to a three-year low. On the week, the Dow rose 0.5%, the S&P 500 0.3%, and the Nasdaq Composite 0.9%.

Companies

Walt Disney's Zootopia 2 took in $156 million in the U.S. and Canada, $400 million internationally. Regulators ordered fixes to a software glitch on some 6,000 Airbus A320s, and the company cut its 2025 delivery target. With its shares down 60% in the Bitcoin selloff, Strategy established a $1.44 billion U.S.-dollar reserve to pay preferred stock dividends and interest payments. Blackstone, Apollo Global, and KKR will participate in a Bank of England private-market stress test. Apple replaced its AI chief, John Giannandrea, with Microsoft's Amar Subramanya. The European Union opened an antitrust probe into Meta Platforms embedding AI tools in WhatsApp. The White House moved to scrap Biden-era car fuel-efficiency standards.

Deals

Netflix said it would acquire Warner Bros. Discovery's movie and TV studio and HBO MAX streaming businesses for $83 billion, including debt, beating out Paramount Skydance and Comcast...Chip maker Marvell Technology agreed to buy Celestial AI for $3.25 billion.

Next Week

Tuesday 12/9

The Bureau of Labor Statistics releases the Job Openings and Labor Turnover Survey for both September and October. At the end of August, there were 7.22 million job openings, and 1.02 unemployed people for every open position, the highest ratio since April 2021.

Wednesday 12/10

Adobe and Oracle report quarterly results on Wednesday, followed by Broadcom and Costco Wholesale on Thursday.

The Federal Open Market Committee announces its monetary-policy decision. The FOMC is widely expected to cut the federal-funds rate by a quarter of a percentage point to 3.5%-3.75%. The central bank also releases its quarterly Summary of Economic Projections. In the September SEP, the median projection for the federal-funds rate by year-end 2026 was 3.4%, which would imply only one more quarter-point cut, assuming that the FOMC cuts as expected at this meeting. Traders are pricing in a roughly 3% federal-funds rate by December 2026, a much more aggressive easing cycle than currently forecast by the central bank. This may be due to the dovish Kevin Hassett, currently director of the National Economic Council and the favorite to replace Jerome Powell, whose term as Fed chair ends in May.

The Numbers

4.1%

Increase in Black Friday retail sales from 2024, excluding autos, up from 2024's 3.4%, Mastercard estimated.

64%

Percentage of venture funding, roughly $161 billion, going into AI over the first nine months of 2025.

4 M

International Energy Agency's estimate of excess per-day supply of barrels of oil in 2026, a record.

$16 T

The combined wealth of the world's billionaires, up 13% since last year, from a UBS report.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

By Joe Flint

David Zaslav is finally having his moment.

Since merging his cable programming behemoth Discovery with storied entertainment company Warner Bros. in 2022, Zaslav has often been a punching bag for Hollywood.

He has taken heat for cutting costs, scrapping movies and laying off thousands — while being awarded a lavish compensation package as the company's stock slid year after year. The chief executive was even booed while delivering a commencement speech at Boston University during the 2023 writer's strike.

But with Friday's deal to sell a big chunk of the company to Netflix, the 65-year-old executive is undoing what he built, forging a deal with a streaming giant for top dollar — and may end up getting the last laugh.

In an industry-shaking deal, Netflix agreed to buy Warner Bros. and HBO for $72 billion. The sale is expected to close in the next 12 to 18 months, after Zaslav completes his earlier plan to spin off the Warner Discovery cable assets including TNT and CNN into their own stand-alone company. There is also likely to be a lengthy and challenging regulatory review.

It's Netflix's biggest deal ever, one of the largest transactions announced this year and a stark contrast to Warner's value just a few years ago. When WarnerMedia was spun out of AT&T and merged with Discovery, the combined company had a market value of about $60 billion.

Netflix's cash-and-stock transaction represents a coup for the man that all of Hollywood calls DZ. He had told associates that he wanted to sell to a high-profile tech company, rather than David Ellison's Paramount, which aggressively sought to purchase the entire company.

Zaslav started out as a lawyer at General Electric when it owned NBC, making distribution deals for its cable networks and ascending the executive ranks. His key mentors were legendary GE CEO Jack Welch and John Malone, considered the godfather of the modern-day cable industry.

He left NBC to become CEO of Discovery, where he took a bland group of cable channels and turned them into a reality-TV juggernaut. Like Welch, Zaslav was always on the lookout for savings. He made steep job cuts there and again after his next merger, the 2018 deal to buy Scripps Networks and its channels, including Food Network and HGTV, for $12 billion. With cord-cutting starting to eat into the cable business, Zaslav staked out his next big bet, a merger with AT&T's WarnerMedia.

"We saw the cliff that was ahead for the linear business," said Malone, then a board member at Discovery, in an interview.

Initially Zaslav was welcomed as a conquering hero who would save Warner from the evils of telecom executives who didn't understand showbiz. He set himself up in a bungalow at the Beverly Hills Hotel and often held court at the salmon-pink polo lounge, where he met with high-powered agents and producers.

He had Jack Warner's desk moved into his office on the Warner Bros. lot. He had already bought the Beverly Hills home once owned by the late legendary Paramount chief Robert Evans for $16 million in 2020. He then spent millions to remodel the property.

But there was no happy ending. Soon Zaslav saw that he'd inherited a lot of headaches along with great properties. He felt that Warner had too many fiefdoms that needed to be broken down and consolidated.

"We realized after the closing that we weren't exactly getting what we thought," Malone said.

Strikes by writers and actors in 2023 also slowed the industry to a halt at a time when studios were trying to ramp up production to better compete with Netflix and other streamers.

Saddled with a heavy debt load from the AT&T deal, Zaslav oversaw numerous cost-cutting efforts that often led to bad blood at the company, and across Hollywood. At the same time though, he installed new leadership at the movie studio, which began spending heavily to land high-profile projects.

It paid off this year with several hits, including a new "Superman" movie and "Sinners."

"They've gone from struggling to the leading movie studio," Malone said of the Warner turnaround, adding "the heritage has been fulfilled."

On the TV front, Zaslav pushed hard to build HBO Max's global streaming presence, and the service is still known for having deep pockets to make shows such as "White Lotus" and "The Last of Us."

Zaslav took heat for not keeping the rights to NBA broadcasts, which were a staple of the TNT network. But even without the NBA, the network was still able to keep its distribution fees at the same level in new deals with Comcast, Charter and others.

Zaslav is not shy about being in the spotlight — whether in floor seats for New York Knicks games at Madison Square Garden or on a red carpet. Ever the entertainer, the night before initial bids for Warner Discovery were due last month, Zaslav held court at a dinner party at his Beverly Hills residence where the guest list included Oprah Winfrey, Margot Robbie and CAA superagent Bryan Lourd.

Yet he's also a workaholic known for firing off texts to subordinates and colleagues as early as 4 a.m.

Zaslav's outsize pay packages have garnered plenty of criticism, especially since the company's stock was in decline for much of his tenure. Warner Bros. Discovery reached its peak market cap within days of the 2022 merger — a record that stood until Friday, when it soared on news of the Netflix deal and closed with a valuation of $64.6 billion.

But Malone said that criticism isn't fair.

"He got criticized for a long while for being over paid but a lot of that was phony," because the compensation was tied to stock performance that never materialized, Malone said.

Paramount's aggressive efforts to acquire Warner threw a wrench into Zaslav's long-term plans, which were to split the company in two and then afterward talk to potential suitors for the studio and streaming assets. The sense among Warner executives and their advisers was that Paramount was trying to lowball the company.

At the same time, Netflix was quietly sniffing around Warner. An unwelcome offer was not Netflix's style but once the for sale sign went up it went into sprint mode. Zaslav had long talked with associates about the possibility of a tech firm wanting Warner so Paramount's unwelcome advances ended up turning into an opportunity.

Write to Joe Flint at Joe.Flint@wsj.com

By Francesca Fontana

The Score is a weekly review of the biggest stock moves and the news that drove them.

Warner Bros. Discovery

Netflix struck a $72 billion deal to buy Warner Bros., beating out Paramount and Comcast — and shocking Hollywood.

The acquisition would combine the largest global streaming service with the company behind HBO Max, the Superman and Harry Potter movies and hit TV shows such as "Friends." Warner plans to split its cable networks off into a separate company before the deal closes.

Like Netflix, Comcast was pursuing the studios and HBO Max business, while Paramount had sought to buy the entire company, including cable networks such as CNN, TNT and TBS.

Paramount had argued that a deal with Netflix wouldn't be blessed by antitrust regulators. President Trump's advisers are concerned about the deal, The Wall Street Journal reported Friday.

Warner Bros. Discovery shares gained 6.3% Friday.

American Eagle Outfitters

American Eagle soared after posting strong quarterly results, boosted by the clothing brand's latest marketing campaigns.

The company's momentum has been boosted by its latest celebrity collaborations — including its controversial campaign with "Euphoria" actress Sydney Sweeney, and its ads with Martha Stewart and football player Travis Kelce.

Chief Executive Jay Schottenstein said they have attracted new customers and driven increased traffic, especially in its digital channel.

The company said the holiday shopping season is off to a strong start, and raised its same-store sales guidance for the current quarter and full year.

American Eagle shares jumped 15% Wednesday.

Dollar General

More higher-income shoppers are looking for bargains at dollar-store chains.

In their latest quarterly reports, discount-store operators Dollar General and Dollar Tree both reported the trend, as new customers skewed more affluent.

Dollar Tree said roughly 3 million more households shopped at its stores during the recent quarter compared with the same period a year earlier. Of those shoppers, approximately 60% came from higher-income households, or those earning over $100,000 annually, Chief Executive Mike Creedon said.

Both companies also lifted their annual outlooks. Dollar General said its fourth-quarter sales are off to a strong start, despite the pause in federal government funding for the Supplemental Nutrition Assistance Program.

Dollar Tree shares rose 3.6% Wednesday, while Dollar General shares surged 14% Thursday.

Boeing

Jet-making rivals Boeing and Airbus are experiencing a reversal of fortunes, with Airbus stumbling for the first time in years as Boeing regains its footing.

Boeing, which had suffered from production challenges and safety concerns in recent years, told investors Tuesday it expects to generate more cash as it ramps up deliveries of its most popular aircraft.

On Wednesday, its European rival was the one announcing production delays. Airbus warned that its deliveries would fall due to a quality problem with its bestselling A320 jets, days after a separate issue on thousands of its aircraft required an urgent software fix.

Boeing shares jumped 10% Tuesday, one of the S&P 500's best performers of the day.

Salesforce

Salesforce's AI product, Agentforce, is gaining traction.

The software giant said the product — which uses large-language models to perform tasks — hit $540 million in annual recurring revenue during the third quarter. The company also raised its full-year guidance.

Chief Executive Marc Benioff told analysts Wednesday that more companies, including Williams Sonoma and SharkNinja, are adopting the AI agent to use for customer service and internal operations.

Agentforce, which launched in October 2024, has been the main focus for many investors who see it as a measure of how well Salesforce will keep up in the AI era.

Salesforce shares gained 3.7% Thursday.

Kroger

Strapped shoppers are taking a toll on supermarkets and the companies whose products fill their shelves.

Procter & Gamble Chief Financial Officer Andre Schulten warned on Tuesday of a "tougher context" for the Pampers maker's U.S. business.

He said the company's sales this quarter are affected by a more wary consumer, the government shutdown and the temporary loss of SNAP food-assistance benefits. P&G shares dropped 1.1% Tuesday.

On Thursday, supermarket chain Kroger swung to a quarterly loss and said it is working to cut costs, as it tries to manage consumers' sensitivity to rising prices while addressing its own rising expenses.

Kroger shares dropped 4.6% Thursday.

Our weekly markets news roundup is now part of the WSJ's What's News podcast. Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Check out What's News in Markets at wsj.com/podcasts or wherever you listen.

Write to Francesca Fontana at francesca.fontana@wsj.com.