EXCERPT: Netflix plans to buy film and streaming divisions of Warner Bros Discovery in a $72bn deal set to reshape Hollywood.
Netflix has reached an agreement to acquire the film and streaming divisions of Warner Bros Discovery in a blockbuster deal valued at $72 billion (£54 billion), marking one of the most significant shake-ups in Hollywood’s modern history.
After months of bidding that pitted it against rivals Comcast and Paramount Skydance, Netflix emerged as the top contender, securing ownership of world-renowned franchises such as Harry Potter, Game of Thrones, and the HBO Max streaming platform.
The acquisition is expected to redraw the contours of the global film and media landscape, though analysts caution that it may encounter intense scrutiny from competition regulators in the United States.
Netflix co-chief executive Ted Sarandos hailed the agreement as a transformative moment for the entertainment industry. By merging Netflix’s global streaming reach with Warner Bros’ extensive library of films and series, Sarandos said the companies would be able to “give audiences more of what they love and help define the next century of storytelling.”
His fellow co-chief executive Greg Peters echoed this sentiment, noting that the acquisition will allow Netflix to introduce Warner Bros’ celebrated titles to an even broader global audience.
The cash-and-stock deal places Warner Bros’ valuation at $27.75 per share and gives the company a total enterprise value of about $82.7 billion, inclusive of debt.
David Zaslav, Warner Bros Discovery president and chief executive, described the merger as the union of “two of the greatest storytelling companies in the world.”
“By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come,” Zaslav said.
Both companies said the agreement will enable Netflix to strengthen its studio production capabilities and deepen investments in original programming—a move analysts believe is vital as streaming competition intensifies.
The sale received unanimous approval from the boards of both firms.
Under the terms of the agreement, Netflix will complete the acquisition once Warner Bros finalises its previously announced plan to split its streaming and studios segment from its global networks division.
The networks division—which houses CNN, sports outfits, and several European free-to-air channels—will become a separate publicly traded company. This split is expected between July and September next year.
Paolo Pescatore, media and telecom analyst at PP Foresight, described the move as “a huge statement of intent” that reinforces Netflix’s ambitions to remain the dominant global force in streaming.
However, he warned that the acquisition will pose significant operational challenges: “This is uncharted waters and previous big media acquisitions have been poorly executed. Netflix will need razor-sharp focus on integration and execution.”
Paramount, which made an earlier bid to acquire the entire Warner Bros organisation—including its cable networks—was rebuffed before the company eventually put itself up for sale.
Emma Wall, chief investment strategist at Hargreaves Lansdown, noted before Friday’s announcement that the US competition regulator was almost certain to intervene.
“This will create a global mega power in broadcast entertainment which the regulator will want to look at,” she said.
Tom Harrington, head of television at Enders Analysis, added that while it is difficult to predict whether regulators will approve the merger, its impact on cinema and traditional Hollywood production could be profound.
“Were it to go through it would reorient Hollywood, with a streamer acquiring a business much of which it is existentially the antithesis of – Netflix has always had some limited use for the cinema but generally its offering undermines it,” he said, cautioning that significant cutbacks in film and television production were likely.
Unions, creatives, and core industry stakeholders are expected to resist such reductions.
“HBO, the creative jewel, would be terribly exposed within Netflix,” Harrington added, though he noted the brand had survived numerous ownership transitions in the past.
For viewers, the merger may bring higher subscription costs. Harrington said Netflix is likely to raise prices, and although HBO Max may be absorbed or rendered non-essential, the combined audience reach would ultimately boost overall revenue.
He said, “Netflix would get more expensive and even though HBO Max would be shuttered/become non-essential, the greater penetration of Netflix households would likely mean an increase in total overall subscription revenues.”
As scrutiny begins and regulatory processes unfold, the Netflix–Warner Bros deal is poised to become a pivotal test of how much consolidation global entertainment markets—and their regulators—are willing to tolerate in the streaming era.
Melissa Enoch
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