Following last night’s news that Netflix has begun exclusive talks to acquire the studio & streaming half of Warner Bros. Discovery in an $82.7 billion deal, the reaction has been swift and – in some cases – extreme.
The deal will see Netflix paying $27.75 a share for that studio/streaming half, with a total equity value of $72 billion. Netflix will acquire Warner Bros., which includes its film and television studios, HBO Max and HBO.
The deal is expected to be subject to regulatory conditions, of course, and will follow after Warner Bros. Discovery’s global networks division, Discovery Global, spins off into a new publicly-traded company in Q3 2026.
Netflix has since made an official announcement saying it “expects to maintain Warner Bros.’ current operations” and “build on its strengths, including theatrical releases for films”. The acquisition is expected to “significantly expand U.S. production capacity”.
In a town hall meeting with staff, WB chief David Zaslav indicated that HBO Max will remain, in some form, after the acquisition. Chief Legal Officer Priya Aiyar says it will take between 12-18 months for the regulatory process required to close, not just in the United States but globally.
Netflix co-CEO Ted Sarandos said today (via Business Insider & Deadline) that his company remains committed to Warner Bros. Pictures theatrical releasing, however it appears where he will apply pressure is in the length of theatrical windows:
“We’ve released about 30 films into theaters this year, so it’s not like we have this opposition to movies in theaters. My pushback has been mostly in the fact of the long, exclusive windows, which we don’t really think are that consumer-friendly.
I wouldn’t look at this as a change in approach for Netflix movies or Warner movies, for that matter. I think over time the windows will evolve to be much more consumer friendly … to meet the audience where they are … all those things we’d like to do.
But I’d say that right now you should count on everything that has planned on going to the theaters through Warner Bros. will continue to go to the theaters through Warner Bros. And Netflix movies will take the same [path] as they have — which is some of them do have a short run in the theater beforehand.”
Exhibition’s biggest trade group, Cinema United, didn’t mince words in a statement this morning saying: “The proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business.”
Almost all the major guilds have responded. The WGA issued a statement condemning the deal, saying “this merger must be blocked”. The DGA says it has “significant concerns” and is already seeking a meeting with Netflix to outline those concerns. SAG-AFTRA says the prospect of the deal “raises many serious questions”. Finally the Hollywood Teamsters says they will call for the government and antitrust enforcers to “reject this deal and any other deal seeking the consolidation of power and market”.
Then there’s the loser in all this, David Ellison’s Paramount Skydance, who isn’t taking this lying down. Fox Biz’s Charles Gasparino reports via The New York Post that the Ellisons are ‘livid’ and that Paramount Skydance is now looking to launch a hostile bid for Warner Bros. Discovery because it feels its $30 a share all cash offer (for the entire studio, not just the studio/streamer half) is “actually higher than what Netflix offered in terms of cash, stock and the value of the spinoff of the cable business”.
It now appears Paramount may be mulling a hostile takeover bid of Warner Bros and will take its case directly to WBD shareholders. A source for the outlet says among the reasons Zaslav turned to Netflix is that Paramount Skydance “is not making any money” and he was “unsure of who is guaranteeing its bid”.
With Netflix, which has signed a $5.8 billion breakup fee and has huge cash reserves not funded by overseas interests, its offer is “guaranteed”. Netflix has a market cap of above $400 billion compared to Paramount Skydance’s $14.6 billion.
