Streaming giant Netflix said Friday it will buy film and television studio Warner Bros. Discovery for nearly $83 billion, the entertainment industry’s biggest consolidation deal this decade.
The acquisition, which will face regulatory scrutiny by the Trump administration and is opposed by top names in Hollywood, gives Netflix access to a vast film catalog as well as the prestigious streaming service HBO Max.
Over the decades, Warner Brothers has produced film classics including “Casablanca” and “Citizen Kane”, as well as more recent blockbuster shows including “The Sopranos”, “Game of Thrones” and the “Harry Potter” movies.
“Together, we can give audiences more of what they love and help define the next century of storytelling,” said Ted Sarandos, co-CEO of Netflix, which has produced global hits including “Stranger Things”, “KPop Demon Hunters” and “Squid Games”.
The biggest previous such deal was Disney’s $71 billion acquisition of Fox in 2019.
The transaction values Warner Bros. Discovery at $27.75 per share, implying a total equity value of approximately $72.0 billion and an enterprise value — including debt — of around $82.7 billion.
Amid echoes of criticism and puzzlement about the deal, Netflix’s share price was down by more than 2.5 percent on Friday.
“Today’s announcement combines two of the greatest storytelling companies in the world,” said David Zaslav, President and CEO of Warner Bros. Discovery, in the statement.
The transaction, which was unanimously approved by the boards of both companies, is to close within 12 to 18 months, they said.
“Netflix aims to dominate Hollywood,” said Kathleen Brooks, research director at XTB, a trading and investment firm.
The analyst warned of a number of potential issues surrounding the deal, including fears of a Netflix monopoly once it commands such “a colossus in the TV and movie business”.
– Antitrust issues expected –
Netflix, whose stock weakened as speculation on the imminent tie-up heated up in New York trading Thursday, “has never attempted a deal of this size before, which could lead to some concern about how the new mega company will be managed going forward”, she said.
Brooks said she also expected political issues given that a deal of this size would need regulatory approval from anti-trust authorities in the US, and potentially elsewhere.
According to the New York Post, White House officials have recently expressed concern about Netflix’s possible acquisition of WBD, which they believe could give the video platform a dominant position in the US content market.
The parent company of HBO, CNN and the Warner Bros film studio officially put itself up for sale in October after receiving multiple unsolicited offers, setting aside a planned split into two separate entities — one focused on streaming and studios, the other on traditional cable networks.
Warner Bros Discovery was originally targeted by Paramount — recently acquired by the billionaire tech family of Oracle founder Larry Ellison, one of the world’s richest men and a Trump ally.
Netflix had joined Paramount Skydance and Comcast, the owner of NBCUniversal, in a second round of an auction that was being negotiated throughout the US Thanksgiving holiday.
Netflix, the world’s largest streaming service with over 280 million subscribers globally, has been working on a bridge loan totaling tens of billions of dollars to finance the acquisition, according to sources cited by Bloomberg.
Top Hollywood players have voiced their preference to see Warner Bros not end up in the hands of Netflix, citing concerns that the streaming company largely seeks to limit theatrical releases of its film productions.
“Titanic” director James Cameron, speaking before Friday’s announcement, called any takeover of Warner Bros by Netflix “a disaster.”
Netflix says it intends to maintain Warner Bros.’ activities, including theatrical film releases and to expand US content production.
The streaming battles and the decline of traditional entertainment are leading to major strategic reorganizations among the big Hollywood players.
In 2021, Amazon acquired the legendary Hollywood studio MGM for $8.45 billion, gaining a catalog of more than 4,000 films, including the James Bond and Rocky franchises.
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