A sweeping shift in the entertainment landscape
Netflix agrees to buy the film and streaming divisions of Warner Bros Discovery for 72 billion dollars. The streamer wins a long and competitive bidding fight against Comcast and Paramount Skydance. Warner Bros owns major franchises such as Harry Potter and Game of Thrones and operates the streaming service HBO Max. The takeover forms a new global entertainment force, but regulators still need to approve the agreement. Industry groups like the Writers Guild of America criticise the plan and warn of risks for workers and consumers.
Ted Sarandos, co-chief executive of Netflix, says the company feels highly confident about gaining regulatory approval. He says the combined libraries will give viewers more stories they enjoy. He argues that Warner Bros shaped entertainment for a century and both companies can now shape the next century.
Greg Peters, the other co-chief executive, says the HBO brand stays important for audiences. He adds that it is too early to present detailed plans for the merged service.
Savings, production strategy and future structure
Netflix expects two to three billion dollars in savings. Most savings will come from removing overlap in support and technology teams. Warner Bros will continue releasing films in cinemas. The Warner Bros television studio can still produce shows for outside distributors. Netflix will continue creating exclusive content for its own platform.
Sarandos calls the agreement a big moment for both companies. He admits some investors felt surprised. He still believes the merger gives Netflix a rare chance to secure long-term success. David Zaslav, chief executive of Warner Bros, says the deal brings together two strong storytelling companies. He says the partnership will help future generations enjoy powerful stories.
The cash and stock offer values each Warner Bros share at 27.75 dollars. The enterprise value totals about 82.7 billion dollars. The pure equity value stands at 72 billion dollars. Both boards approve the deal unanimously.
Industry pushback intensifies
The Writers Guild of America urges regulators to stop the merger. It warns of job cuts, lower pay and weaker working conditions. It says viewers may face higher prices and less variety in film and television. Michael O’Leary, chief of Cinema United, calls the deal a major threat to cinemas worldwide. He fears harm for major chains and small local theatres.
Netflix will finalise the takeover once Warner Bros completes its plan to split into two separate companies. The global networks unit will operate as Discovery Global. It will include major US news and sports channels as well as European free-to-air networks. TNT Sports International will remain with the division sold to Netflix.
Hollywood braces for massive change
Analyst Paolo Pescatore says the sale sends a clear signal about Netflix’s global ambitions. He warns that merging two huge operations may create major logistical challenges. Paramount previously tried to buy all of Warner Bros, but the company rejected that offer before putting itself up for sale.
Tom Harrington of Enders Analysis says approval would reshape Hollywood. He expects deep cuts in film and television output from a merged firm. He predicts strong resistance from unions and major industry groups. He also says viewers would likely face higher subscription prices.
Danni Hewson of AJ Bell says Netflix offers Hollywood reassurance by promising to keep Warner Bros films in cinemas. She says fast approval could unlock large savings. She warns that regulators will examine whether Netflix gains too much pricing power in the coming months.
