Netflix on Friday announced it had reached a deal to acquire Warner Bros.— including the company’s film and television studios and streamer HBO Max—for $82.7 billion, in move that follows a weeks-long bidding war in which the streaming giant beat out Paramount and Comcast.
Warner Bros. Discovery has reportedly entered exclusive talks with Netflix for a sale of its studio and TV businesses.
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Key Takeaways
- In a press statement the company said the cash and stock deal is valued at $27.75 per Warner Bros. Discovery share and it will close after the media giant’s TV network business is spun off into a separate public company, Discovery Global.
- The deal is subject to regulatory approvals and is expected to be completed in the third quarter of 2026.
- If it goes through, each WBD shareholder will receive $23.25 in cash per share and $4.501 worth of shares of Netflix’s stock.
- According to Deadline and CNN, Paramount Skydance had offered $27 per share for the entire Warner Bros. Discovery business, including its cable channels like CNN and TNT.
- Comcast also made a bid only for Warner Bros. Discovery’s studio and streaming businesses.
- Bloomberg previously reported that Netflix is offering Warner Bros. Discovery a $5 billion breakup fee if regulators don’t clear the deal.
How Has The Market Reacted To Netflix And Wbd’s Talks?
Warner Bros. Discovery’s shares rose 1.22% to $24.84 in premarket trading early on Friday. Netflix shares on the other hand fell 2.33% to $100.81 in early trading, after sliding 0.71% on Thursday.
What Did Netflix Say About Theatrical Releases And Hbo Max?
In the statement announcing the merger, Netflix said it “expects to maintain Warner Bros.’ current operations…including theatrical releases for films.” The streaming giant, however, didn’t mention how long the theatrical window will be for Warner’s films after the acquisition. The statement also said: “By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose.” It is unclear if this means HBO’s library will be folded in to Netflix or if it will remain a separate streaming service.
What Do We Know About Paramount’s Bid?
Bloomberg and Variety reported that Paramount Skydance has cried foul over the sales process, labeling it “tainted.” In a letter sent to Warner’s CEO David Zaslav, Paramount’s attorneys alleged that Warner’s board had “embarked on a myopic process with a predetermined outcome that favors a single bidder,” refering to Netflix. The December 3 letter added that Warner appeared to have “abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders.” In an earlier letter sent on December 1, Paramount had argued that the Netflix deal would never get regulatory approval. “The simple truth is that a deal with Netflix as the buyer likely will never close…Netflix is the only remaining Big Tech company that has not faced serious global antitrust enforcement, but attempting to acquire the WBD assets will change that.”
Chief Critics
A spokesperson for the Director’s Guild of America told Deadline the deal “raises significant concerns for the DGA.” The statement added: “We will be meeting with Netflix to outline our concerns and better understand their vision for the future of the company. While we undertake this due diligence we will not be commenting further.” Variety reported that a group of anonymous A-list Hollywood figures has also written to members of Congress to speak out against the deal and give it “the highest level of antitrust scrutiny.” The Hollywood figures warned that the streaming giant would “effectively hold a noose around the theatrical marketplace,” if the acquisition goes through.
What To Watch For
Earlier this week, the New York Post reported that senior White House officials had flagged antitrust concerns over Netflix’s bid to acquire Warner. The report said White House officials also suggested in a meeting that Netflix’s market power merited a broader investigation into its dominance. In a separate report on Thursday night, the New York Post reported that Paramount Skydance CEO David Ellison met with Trump officials and key lawmakers in Washington, D.C. this week to make his case against Netflix’s potential acquisition of Warner. Ellison was reportedly joined by his company’s legal team, which is led by Makan Delrahim, who served as the Justice Department’s anti-trust chief during Trump’s first term. The Paramount chief’s father Larry Ellison is the second wealthiest person in the world and has built close ties with the Trump White House.
Key Background
In June, Warner Bros Discovery announced plans to split into two publicly traded firms, the first of which would be a “Streaming & Studios” company that would include “Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max.” The other would be a “Global Networks” spin-off comprising the company’s television networks, including “CNN and TNT Sports” in the U.S. However, after completing its acquisition of Paramount, the Ellison-led Skydance (now Paramount Skydance) made an unsolicited offer to acquire Warner’s entire business at $20 per share. The HBO-owner rejected the offer deeming it to be too low, but soon announced it was open to a sale and had received interest from “multiple parties.”
