Netflix to Acquire Warner Bros. Film and Streaming Businesses in $72 Billion Deal
LOS ANGELES – Netflix will acquire the film and streaming businesses of Warner Bros. Finding in a deal valued at $72 billion, reshaping the global entertainment landscape. The agreement will see TNT Sports International join Netflix, while Warner Bros.’ global networks division will become a separate entity named Discovery Global, encompassing cable channels like CNN and TNT Sports in the US, alongside Discovery and free-to-air channels in Europe.
The move follows Warner bros.’ decision to reject a previous bid from Paramount Global to purchase the entire company, including its cable networks, in October.
Industry analysts predict notable implications for both the entertainment industry and consumers. “This is a huge statement of intent and underlines Netflix aspirations to be a global leader in the new world order of streaming,” saeid Paolo Pescatore, founder and technology media and telecom analyst at PP Foresight. However, he cautioned that integrating the companies could “provide a headache for Netflix” due to the deal’s scale.
Tom Harrington, head of television at Enders Analysis, noted the deal’s potential impact on cinema, stating it would “reorient Hollywood.” He anticipates “big reductions” in television and film output, potentially facing resistance from Hollywood and relevant unions.
Consumers are likely to see higher prices as a result of the merger, according to Harrington. “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.”
Netflix has attempted to assuage concerns within the film industry by promising to continue releasing Warner Bros. films in theaters, according to Danni Hewson, head of financial analysis at AJ Bell. “If this deal can clear those significant regulatory hurdles quickly there are likely to be considerable cost savings to be made,” Hewson added, noting scrutiny will focus on weather savings are passed on to subscribers or absorbed as increased pricing power for Netflix.
The deal is subject to regulatory approval.
