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In a watershed move, Warner Bros. Discovery announced Friday it has agreed to sell its streaming and studios assets to Netflix in a deal valued at $82.7 billion, setting the stage for one of the most sweeping and consequential mergers in modern Hollywood history.<\/p>\n
If approved by federal regulators, the transaction promises to create a new entertainment and media behemoth, uniting the world\u2019s largest streaming destination with a storied 102-year-old film studio.<\/p>\n
Warner Bros.\u2019 portfolio includes HBO, the HBO Max streaming platform and the \u201cHarry Potter\u201d movie franchise. Netflix, home of \u201cStranger Things\u201d and \u201cSquid Game,\u201d reaches more than 300 million paid subscribers across over 190 countries.<\/p>\n
\u201cOur mission has always been to entertain the world,\u201d said Ted Sarandos, co-CEO of Netflix, in a news release. \u201cBy combining Warner Bros.\u2019 incredible library of shows and movies\u2014from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends\u2014with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we\u2019ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.\u201d<\/p>\n
Netflix\u2019s takeover of Warner Bros. ushers in a new era for Hollywood, which has evolved from a business focused on theatrical exhibition to an increasingly digital-first industry. The acquisition cements Netflix\u2019s market dominance and expands the company\u2019s content library as it faces off against tech giants like YouTube and TikTok.<\/p>\n
The deal would give Netflix access to popular and lucrative intellectual property, including DC Comics characters such as Batman and Superman; the \u201cGame of Thrones\u201d TV saga; and a vast trove of titles stretching from \u201cCasablanca\u201d and \u201cDirty Harry\u201d to \u201cDune\u201d and \u201cBarbie.\u201d<\/p>\n
In the lead-up to the announcement, Netflix attempted to reassure the creative community by reportedly promising to release Warner Bros. movies in brick-and-mortar cinemas. But many filmmakers are skeptical of Netflix\u2019s business model, which prioritizes streaming distribution.<\/p>\n
In a Friday news release announcing the deal, the companies said that the acquisition would be a mix of cash and stock that valued Warner Bros. Discovery at $27.75 per share, with an enterprise value of $82.7 billion and an equity value of $72 billion, which takes into account Warner Bros. debt. As of Thursday trading, Warner Bros. Discovery\u2019s entire market capitalization \u2014 the value of the company based on its stock price \u2014 was<\/p>\n
Warner Bros. Discovery, weighed down by billions in debt and lackluster streaming growth, formally put itself up for sale in the fall. The company\u2019s suitors included Paramount, Skydance, and Comcast, which each made bids in a largely secretive process. (Comcast owns NBCUniversal, the parent company of NBC News.)<\/p>\n
\u201cToday\u2019s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most,\u201d said David Zaslav, president and CEO of Warner Bros. Discovery, in a news release. \u201cFor more than a century, Warner Bros. has thrilled audiences, captured the world\u2019s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world\u2019s most resonant stories for generations to come.\u201d<\/p>\n
The tie-up would not include Warner-owned cable channels like celebrity.land and TNT.<\/p>\n
Paramount was widely seen as the frontrunner in the bidding war because of the company\u2019s deep pockets and political ties. David Ellison is the son of Larry Ellison, the Silicon Valley magnate and friend of President Donald Trump.<\/p>\n
The corporate union between Warner Bros. and Netflix still faces potential antitrust scrutiny and political challenges.<\/p>\n
In late November, three senators \u2014 Elizabeth Warren of Massachusetts, Bernie Sanders of Vermont and Richard Blumenthal of Connecticut \u2014 sent a letter to the Justice Department Antitrust Division warning that any potential Warner Bros. merger could be tainted by \u201cpolitical favoritism and corruption.\u201d<\/p>\n
Rep. Darrell Issa, R-Calif., sent a letter to Attorney General Pam Bondi the same month, cautioning that merging Netflix with HBO Max would create a company with a more than \u201c30 percent share of the streaming market: a threshold traditionally viewed as presumptively problematic under antitrust law.\u201d<\/p>\n