A dramatic reshaping of the studio landscape
Netflix agrees to acquire the film and streaming divisions of Warner Bros Discovery for 72 billion dollars. The company wins a long and competitive bidding process against Comcast and Paramount Skydance. Warner Bros controls major franchises like Harry Potter and Game of Thrones and operates the streaming platform HBO Max. The deal creates a dominant new entertainment force, but regulators must still approve the merger. Industry groups such as the Writers Guild of America warn of risks for workers and viewers.
Ted Sarandos, co-chief executive of Netflix, says the company feels highly confident about regulatory approval. He says uniting both catalogues will offer audiences more of the stories they love. He argues that Warner Bros defined the past century of entertainment and both companies can now define the next one.
Greg Peters, the other co-chief executive, says the HBO brand remains essential for viewers. He adds that it is still too early to reveal how Netflix will shape the combined service.
Efficiency plans and content strategy
Netflix expects two to three billion dollars in savings from the deal. Most savings will come from removing overlap in support and technology teams. Warner Bros will continue to release films in cinemas. The Warner Bros television studio can still produce shows for outside distributors. Netflix will keep creating exclusive content for its own platform.
Sarandos calls the agreement a major milestone for both companies. He admits that the decision surprised some investors. He still believes the merger gives Netflix a rare chance to secure long-term growth. David Zaslav, chief executive of Warner Bros, says the partnership unites two major storytelling voices. He says the agreement helps ensure powerful stories reach audiences for generations.
The offer values each Warner Bros share at 27.75 dollars. The enterprise value reaches about 82.7 billion dollars. The equity value stands at 72 billion dollars. Boards on both sides approve the deal unanimously.
Criticism grows across the entertainment sector
The Writers Guild of America urges regulators to block the merger. It warns of job cuts, lower wages and weaker working conditions. The group says viewers may face higher prices and less variety. Michael O’Leary, chief of Cinema United, calls the takeover a serious threat to cinemas worldwide. He fears harm for both large theatre chains and small local screens.
Netflix will finalise the takeover after Warner Bros completes its plan to split its operations into two separate companies. The global networks division will operate as Discovery Global. It will include major US news and sports channels and several European free-to-air networks. TNT Sports International will remain with the division sold to Netflix.
Hollywood braces for sweeping industry change
Analyst Paolo Pescatore says the sale signals Netflix’s growing ambition to lead the global streaming market. He warns that merging two major operations may create significant challenges. Paramount previously tried to buy all of Warner Bros, but the company rejected the offer before putting itself up for sale.
Tom Harrington of Enders Analysis says approval would reshape Hollywood on a large scale. He expects major cuts in film and television output from a merged company. He predicts strong resistance from unions and powerful industry groups. He also expects subscription prices to rise for many households.
Danni Hewson of AJ Bell says Netflix reassures Hollywood by promising to keep Warner Bros films in cinemas. She says fast regulatory approval could unlock major cost savings. She warns that regulators will closely study whether Netflix gains too much pricing power in the coming months.
