Netflix to acquire Warner Bros. Discovery for $72B US

Netflix has agreed to buy Warner Bros. Discovery’s TV and film studios and streaming division for US$72 billion, a deal that will hand control of one of Hollywood’s most prized and oldest properties to the streaming pioneer that has disrupted the media industry.

The deal announced Friday followed a weeks-long bidding war, where Netflix took the lead with an offer of about $28 a share, beating Paramount Skydance’s bid of about $24 for the entire Warner Bros. Discovery, which also includes cable TV assets slated for spinoffs.

Including buying out the owner of the marquee franchise game of ThronesDC Comics and harry potter The franchise would tilt the balance of power in Hollywood in favor of the streaming giant that built its dominance without major acquisitions or a large content library, helping efforts to fend off competition.

“Together, we can give audiences more of what they love and help define the next century of storytelling,” Netflix co-CEO Ted Sarandos said in a statement.

But the deal could face tough antitrust scrutiny in Europe and the US because it would give the world’s biggest streaming service ownership of a rival that is home to HBO Max and claims about 130 million streaming subscribers.

Cinema United, the global exhibition trade association, said in a statement Friday that the deal poses an “unprecedented threat” to movie theaters around the world.

“This will raise fears and concerns given the current regulatory environment. The combined major streaming players will be subject to greater scrutiny,” said Paolo Pescatore, analyst at PP Foresight.

Pledge to maintain cinema performance

Warner Bros. Discovery also reportedly received offers from Paramount Skydance and Comcast. Paramount and Comcast did not immediately respond to requests for comment.

David Ellison-led Paramount, which launched the bidding war with a series of unsolicited offers and has close ties to the current administration — his father, Oracle co-founder Larry Ellison, is a longtime friend of Donald Trump — questioned the sale process in a letter earlier this week, alleging favorable treatment from Netflix.

Reuters reported on Tuesday that to ease concerns about market concentration, Netflix argued in deal negotiations that a potential combination of its streaming service with HBO Max would benefit consumers by reducing the cost of the bundled offering.

According to media reports, the company has also told Warner Bros. Discovery that it will continue to release the studio’s films in theaters to ease fears that its deal would eliminate another studio and its major source of theatrical films.

Analysts have said Netflix is ​​driven by a desire to lock up long-term rights to hit shows and movies and rely less on outside studios as it expands into gaming and seeks new avenues of growth following the success of its password-sharing crackdown. The company has leaned on its ad-supported scale to fuel growth, but it’s not expected to become a major revenue engine until next year.

Warner Bros. Discovery was created just three years ago when AT&T spun off WarnerMedia, which was then merged with Discovery Communications in a $43 billion deal.

A group of Hollywood creators are reportedly concerned

Under the deal, each Warner Bros. Discovery shareholder will receive $23.25 in cash per share and about $4.50 in Netflix stock, valuing Warner at $27.75 per share, or about $72 billion in equity and $82.7 billion including debt.

The deal is expected to close after Warner Bros. Discovery spins off its global networks unit, Discovery Global, into a separate listed company, a move now scheduled to be completed in the third quarter of 2026.

Back in June, Warner Bros. Discovery outlined plans to split its cable and streaming offerings with HBO, HBO Max, as well as Warner Bros. Television, Warner Bros. Motion Picture Group, and DC Studios to become part of a new streaming and studio company. Meanwhile, networks like CNN, Discovery and TNT Sports, and digital products like the Discovery+ streaming service and Bleacher Report will create a separate cable counterpart.

Some Hollywood stars have protested against Warner’s acquisition:

It’s unclear how approval of Netflix’s bid will ultimately affect Canadian viewers. Warner Bros. Licenses HBO Content to Crave with Subscription Service Proposed by Discovery, Bell Media Heralding An exclusive, multi-year deal In 2024.

A consortium of prominent film industry figures urged the US Congress to intervene and oppose the Netflix acquisition, Variety reported Thursday.

In an email to members of Congress, the consortium called itself “concerned feature filmmakers.” They left their letter unsigned out of fear of retribution, citing Netflix’s significant influence as both a buyer and distributor, according to Variety.

Reuters could not independently verify the report.