Netflix to buy Warner/Discovery

[Leo Enticknap]

Source

Netflix to buy Warner Bros. Discovery in $72B deal
Deal brings 'Game of Thrones,' DC Universe and HBO Max under Netflix's control

Netflix agreed to buy Warner Bros. Discovery in a $72 billion deal, the streaming service announced on Friday.

Under the deal, Netflix will acquire Warner Bros. Discovery's film and television studios and streaming platform, HBO Max. Franchises, shows and movies such as "The Big Bang Theory," "The Sopranos," "Game of Thrones," "The Wizard of Oz" and the DC Universe will join Netflix’s extensive portfolio.

The cash-and-stock deal is valued at $27.75 per Warner Bros. Discovery share and has an enterprise value, is the total value of a company, including debt, of $82.7 billion. The value of Warner Bros. Discovery shares are $72 billion.

The transaction is expected to close after Warner Bros. Discovery separates its Streaming & Studios and Global Networks divisions into two separate publicly traded companies, which is now expected to be completed in the back half of 2026.

"This acquisition will improve our offering and accelerate our business for decades to come," Netflix co-CEO Greg Peters said. "Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities."

The move marks a significant move in the entertainment industry as it underpins Netflix as the most powerful distribution platform. In its latest quarter,

Netflix added a record ~18.9 million new users in Q4 2024, pushing it past the 300 million milestone — a sign that despite growing competition, it’s still expanding rapidly.

This is a developing story. Check back for updates.

More consolidation in a shrinking industry, I fear.

[Steve Guttag]

I agree and it is unfortunate. We need MORE competition within theatrical. Thus far, Netflix has only considered theatrical as an advertisement for it streaming. Put a high profile movie into theatres for a couple of weeks to give it "street credit" (and Oscar qualifications) and then slam it onto their streaming platform. I don't have a problem at all with Netflix, a streamer, putting everything into streaming. That IS where their revenue comes from.

However, thus far, they have, at best, shown a contempt for theatrical as a dinosaur that needs to go away (except for getting them the above mentioned promotions). That doesn't help cinemas, the industry at large or movies, quite frankly. Their focus will never be theatrical. Their value in movie content is filler to be used between their serial content. Most of their movies are what I would call B-grade or C-grade in development. You forget about them about as fast as you see them. Who cares if they drop off of the platform because you don't have a desire to see them again. However, every once in a while, they produce a feature film like Frankenstein that is a quality piece through-and-through. It is a grade-A movie all of the way. If you haven't seen it, I encourage you to. It doesn't feel Netflix-y at all. But those sorts of movies are far and few between.

[Marcel Birgelen]

Maybe, in a few years, Netflix rediscovers the business model behind the cinema... Maybe someone studies the past, where movies made way more money by being shown in large halls with lots of people, all paying for the privilege to see a movie projected onto a large screen, rather than just dumping your shiny new $200M movie right in between all the other all-you-can-view slop that has accumulated over the last decades.

So, what's left of the big studios? And who will be next?

Disney
Netflix
MGM / Amazon
Universal / Comcast
Paramount Skydance powered by Oracle
...
SPE

[Mark Gulbrandsen]

The deal was finalized, and Warners was bought for 83 Billion. A very dark day in the film Industry for lots of people...

[Ryan Gallagher]

Alas no thumbs-down reaction on FT.

If I was working today I'd wear all black in mourning. But being a stage technician, wearing all black isn't much of a change.

I'm glad my sis got to work at WB while it was the original. Started out as a tour guide and eventually found her way to studio facility management. She moved back to Austin a couple years ago for friends and family reasons, and landed one of the couple venue operations tracks at my theatre!!, I just wish her track was union here so I could call her sister in that sense too. I could out in LA.

This place is oddly full of many way over qualified people cause they love the building and care.

[Rick Cohen]

In the good ol' days we had six major studios. Disney, 20th Century Fox, Universal, Sony, Paramount, and of course Warner Brothers. Lionsgate was even threatening to break into the club as a seventh major studio for a while. Today, only Disney, Universal, and Warner Brothers can legitimately be considered major theatrical production studios. Paramount appears like they are mildly interested in getting back into the game after their acquisition by Skydance but still needs to prove themselves. Sony appears to have checked out, or pulled back to the point where they are virtually irrelevant. Fox was absorbed by Disney. Lionsgate lacks vision and is back to being a minor studio. With the recent acquisition of WB by Netflix, their commitment to being a long-term major theatrical studio is now in serious doubt. Disney and Universal are putting more resources into their streaming platforms every year. Is theatrical dead? Not yet, but it's hardly a vibrant sector for growth, either. If anything, it's a constricting market with minimal growth opportunity, if any. Would you want to hold a large stake of AMC, Cinemark, or Regal in the stock market right now? This is a very dark day for theatrical exhibition, indeed.

[Mike Blakesley]

There was a press release sent out early today by Michael O'Leary, of Cinema United. Very heartfelt, but in reading it, I was thinking: He's trying to rally the troops against this happening, but nobody cares. That's the core problem. They make theatrical a smaller and smaller piece of the overall pie, with the result being there aren't enough people left to support it. The rest don't care about theaters and wouldn't miss them if they all closed tomorrow. Never mind what it would do to the overall entertainment industry if that happened.

A sad day indeed.

[Mark Ogden]

The deal was finalized, and Warners was bought for 83 Billion. A very dark day in the film Industry for lots of people...

It's not a completely done deal yet, that doesn't happen until late next year. A lot of things could still get in the way, and both parties can still back out with a penalty payment. Not to turn political, but Orange Jesus has made it clear that he wanted his buddy buddies the Ellisons to get WB, and he could very easily cause SEC problems. I expect he'll be looking for a kickback in the same way that he forced CBS to make a little donation before the Skydance deal closed. That would probably suit WB just fine, if Netflix says "screw it" the breakup fee is something like 5.8 billion. That's a nice chunk of change, even if the deal doesn't go through.

But if it does: even as I am typing this, the guy who runs Netflix is saying that the theatrical window is going to get shorter, but it won't go away completely. They don't reveal their domestic box office but Frankenstein supposedly brought in something like $42,000,000 from 300 screens from non-subscribers and people who wanted the theatrical experience. They'd be fools to walk away from that.

[Mike Blakesley]

Not to turn political, but Orange Jesus has made it clear that he wanted his buddy buddies the Ellisons to get WB

Dude, if you want to "not turn political," try writing in a way that doesn't take sides, present insults and engage in juvenile name calling. Like this:

"The president has made it clear who he wants to get WB, and could potentially cause SEC problems."

[Scotty Wright]

One big question is what will Netflix do with Warner’s library. So many theaters book warners titles for repertory programming, not just new release. Hopefully, that doesn’t go away too…

[Marcel Birgelen]

Dealing with Netflix's licensing department has been a mess ever since, at least over here. So, let's hope WB's repertoire licensing remains as an independent entity.

It will be interesting to see how this plays out in the end, I can't imagine them just dumping all the WB / HBO content into the standard Netflix subscription tiers...

Dude, if you want to "not turn political," try writing in a way that doesn't take sides, present insults and engage in juvenile name calling. Like this:

"The president has made it clear who he wants to get WB, and could potentially cause SEC problems."

But... isn't it somewhat ironic that he who should lead by example... as in "The President", could take a leaf or two out of that very book?

[Mike Blakesley]

isn't it somewhat ironic that he who should lead by example... as in "The President", could take a leaf or two out of that very book?

It would be nice, but there's no sense in fueling the fire, so to speak.

[Ryan Gallagher]

Dealing with Netflix's licensing department has been a mess ever since, at least over here. So, let's hope WB's repertoire licensing remains as an independent entity.

We can put on some rose colored glasses and pretend Netflix bought WB specifically to obtain their licensing/booking IP to clean up their act in that department, and the WB Library and Studio properties will be unaffected. But those are soooo rose colored.... that they are almost black.

It will be quite an unusual feeling to be emailing a Netflix staff person about your 35mm library print booking.

[Mike Blakesley]

I've seen a couple of writeups now where they say they're going to keep the theatrcal business active, but the windows will become "more consumer friendly." In English, of course that means shorter.

I will say that a lot of the online comments I'm seeing about this are running from skeptical to pissed off to sad. Not a whole lot of "Yippee!" in the comments. I may be looking at the wrong sources....I'm sure they're doing backflips over at the home video forums.

[Frank Cox]

https://www.theglobeandmail.com/culture/film-and-tv/television/article-netflix-warner-bros-deal-canadian-impact/

Why the Netflix, Warner Bros. deal is a disaster for movie theatres, filmmakers and audiences

Moviegoing might have died Thursday night. Perhaps that sounds a tad dramatic, but sometimes you have to deploy the hyperbolic language of Hollywood, especially when describing an industry disaster that is existentially on par with the most explosive chaos ever put on the big screen.

The calamity stems from the news that Netflix is officially buying Warner Bros. Discovery for US$82.7-billion ($114.6-billion) in total enterprise value. While the mammoth acquisition is far from a done deal – there are genuine antitrust concerns at play, and Paramount Skydance, Netflix’s rival suitor for WBD up until a moment ago, could throw up all variety of legal challenges – the fact that the situation even got this far is a sign of the end times for Hollywood as we know it. Make no mistake: This is a devastating blow for movie theatres, filmmakers, television creators and, of course, audiences.

Under the terms of the deal, Netflix would acquire the entire catalogue of the 102-year-old Warner Bros. studio – one of the last five remaining “legacy” studios in Hollywood, alongside Disney, Universal, Paramount Skydance and Sony Pictures – as well as its television and streaming arms, including HBO. In terms of intellectual property, WBD has a gold mine of brands ripe for exploitation. Harry Potter, the DC cinematic universe including Batman and Superman, Looney Tunes, Game of Thrones, The Lord of the Rings, The Sopranos, The Conjuring, The Matrix, the Ocean’s films, Barbie, not to mention such Golden Age classics as Casablanca and The Maltese Falcon: They will now all be under the aegis of Netflix.

The short-view perspective might see this as a net positive for consumers. Hey, one less streaming service to subscribe to, right? But would HBO, inarguably the most quality-focused television outfit around, even exist under the new arrangement? Would Netflix commit to spending just as much as WBD had been on original productions, both for the big and small screens? There are significant reasons to be skeptical.

In its official announcement, Netflix said it “expects to maintain Warner Bros.’ current operations” and “build on its strengths, including theatrical releases for films.” But what does that mean, exactly? Looking at how Netflix has treated the theatrical experience thus far – as a nuisance at best, a business to be destroyed at worst – it is impossible not to see this as a bloody sucker punch for cinema, if not the death knell for most movie theatres.

Netflix has been famously built on the model of being a direct-to-consumer business, with no middle man. When it does put movies in theatres first – a rare occurrence – it does so in the most half-hearted fashion. Take the latest Knives Out entry Wake Up Dead Man, or Guillermo del Toro’s Frankenstein, or the George Clooney comedy Jay Kelly. These are all big-deal, high-budget, prestige-level titles that could easily play in theatres for weeks and weeks before becoming available to Netflix subscribers at home. But that is not the Netflix way.

So, to placate the big-name directors it wants to work with – and to become eligible for the Academy Awards it desperately wants to win to prove its industry legitimacy and/or boost its corporate ego – Netflix has given a handful of its films paltry two-week-or-so runs at a minority of theatres. These are exhibitors that either do not care or rather cannot afford to care about how they’ve gotten into bed with a company that was built to cannibalize their business.

But, you might argue, Netflix seems so committed to movies! I mean, look at how many films they take to festivals around the world! Sure, and TIFF and Venice and other festivals are eager to roll out the red carpet for those premieres. Yet it is all, well, a bit of theatre. Netflix gets to (briefly) show filmmakers that it cares about the cinematic experience, and everyone else gets to feel good about the state of the medium for a brief moment. But Netflix doesn’t seem to want box-office grosses, and it certainly doesn’t want to split that revenue with theatre owners. It only wants subscribers to its digital service, end of story.

This is why the larger exhibition giants in the world, such as AMC in the United States and Cineplex in Canada, have historically refused to play Netflix titles in a wide-scale fashion. And they could (mostly) afford to do so because they had other studio partners, such as WBD, who would play ball, keeping their movies in cinemas for longer than a week or two. What happens when there is one less major studio around? This year, WBD sent a dozen movies to theatres for proper runs. How can theatres fill that gap if Netflix decides, nah, we’re not so much into that model? You don’t have to be Ben Affleck’s math whiz in The Accountant (another WBD property!) to figure it out.
Then there is the creative-community angle. Forget, if you can, all the many employees (on both the WBD and Netflix sides) who are likely to lose their jobs as part of corporate restructuring and cost-saving efficiencies. Forget all the theatres that are likely to close, unable to weather a paucity of product. What about everyone who actually makes movies and television shows? With one massive and storied studio effectively gone, there will be one fewer outlet to sell their stories, to keep the business, and the art, of filmmaking alive.

This moment isn’t quite like the last major merger to go down in Hollywood, when Disney swallowed up 21st Century Fox in 2019. While that move was disastrous in its own right – Fox regularly sent a dozen-plus big titles to theatres when it was active; under the Disney umbrella this year, the husk of a studio distributed just four – the Netflix/WBD situation is exponentially more tragic. At least Disney has a century-long history of and affinity for theatrical distribution. Netflix’s very existence was formed in opposition to the business.

And then there’s the Canada angle. Bell Media’s streamer Crave thrives mostly because it has an output deal with WBD for such premium-tier content as the HBO catalogue. When Netflix gets a hold of that, what will be left? Rogers Media, too, relies on its own funnel of WBD programming to support its specialty TV cable channels.

Unless Netflix decides to license parts of its catalogue out to competitors – a move that would keep revenues flowing freely but also goes against the company’s long-standing ethos of being a walled garden of content – then the deal could singlehandedly sink the Canadian media ecosystem.

The deeply, darkly ironic thing is that WBD recently proved the power of the theatrical marketplace, becoming the first studio to hit US$4-billion ($5.5-billion) worldwide this year, thanks to a series of hits including Sinners, A Minecraft Movie, Superman, Weapons and The Conjuring: Last Rites. It is also responsible for the very best film to be released this year, Paul Thomas Anderson’s One Battle After Another, the current frontrunner in the Oscars race. Will Netflix see that theatre-first success as something to be replicated, or subsumed and eliminated? Watch and learn.