Harry Potter, Batman and Tony Soprano are coming to Netflix. The streaming company beat out rival media giants to acquire Warner Bros. Discovery’s movie studio and HBO Max streaming service for $72 billion, a deal that sent shockwaves through Hollywood.
The companies announced the agreement today (December 5). WBD’s global network businesses, which include CNN, TNT Sports and Discovery, are still expected to spin off into an independent publicly traded company, as previously announced this summer.
“For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention and shaped our culture,” WBD CEO David Zaslav said in a statement. “By partnering with Netflix, we will ensure that people around the world can continue to enjoy the world’s most resonant stories for generations to come.”
Antitrust review
The transaction has been approved by the boards of directors of both companies and is expected to close within 12 to 18 months. That timeline assumes the deal can withstand intense regulatory scrutiny given the companies’ dominance in the streaming space. Netflix currently has more than 300 million paid subscribers, while WBD has 128 million paid subscribers.
Some politicians have expressed concerns. Mike Lee, a Republican senator from Utah, said in an article on
The acquisition will bring HBO hit series such as The Sopranos, game of Thrones, and this white lotus Netflix and WBD’s studio and TV and film archives, including Harry Potter, friends, and DC Universe. If the merger fails, Netflix will owe $5.8 billion in termination fees, according to SEC filings. WMD’s breakup package totaled $2.8 billion.
In addition to antitrust concerns, the acquisition also raises questions about how WBD’s theater business will develop under Netflix’s control. While Netflix has historically prioritized streaming and released only a limited number of movies in theaters, the company said it intends to maintain WMD’s theatrical lineup.
Not everyone is convinced. Cinema United, a trade association representing movie theater owners, said in a statement: “Netflix’s proposed acquisition of Warner Bros. poses an unprecedented threat to the global exhibition business.” The group warned that the deal would threaten 25% of the domestic annual box office, adding that “theaters will close, communities will suffer, and jobs will be lost.”
Netflix will also face a boycott from rivals after winning a fierce bidding war. Comcast acquired WBD’s studio and streaming operations, while Paramount sought to acquire the entire company, including its global networks division.
Paramount reportedly criticized Netflix’s size and what it called an unfair bidding process in a series of letters to WMD’s lawyers earlier this week. Paramount wrote that awarding the deal to Netflix would “consolidate and expand global dominance without permission under domestic or foreign competition laws,” and later accused WMD of accepting “a short-sighted process with a predetermined outcome that favors a single bidder.”
