Netflix to buy Warner Bros Discovery’s studios
Netflix agrees to acquire Warner Bros Discovery’s TV, film studios and streaming division; This deal will transfer control of one of Hollywood’s most valuable and oldest assets to the publishing pioneer.
The US$72 billion ($A109 billion) acquisition announced on Friday follows a weeks-long bidding war in which Netflix offered around US$28 ($A42) per share, eclipsing Paramount Skydance’s offer of close to US$24 ($A36) for the entirety of Warner Bros Discovery, including cable TV assets planned for a spin-off.
The acquisition of the owners of major franchises such as Game of Thrones, DC Comics and Harry Potter will further shift the balance of power in Hollywood in favor of Netflix.
That will help the streaming giant, which has so far dominated without major deals or a large library of content, fend off competition from Paramount, which is backed by Walt Disney and the Ellison family.
Netflix co-CEO Ted Sarandos said the two companies together “will help define the next century of storytelling” and once said “the goal is to become HBO faster than HBO can become us.”
But the deal is likely to face strong antitrust scrutiny in Europe and the US as it would give ownership of the world’s largest streaming service, home to HBO Max, to a rival with around 130 million streaming subscribers.
Paramount, led by David Ellison, who started the bidding war with a series of unsolicited offers and has close ties to the Trump administration, questioned the sales process earlier this week and claimed that Netflix was given favorable treatment.
Even before bids were awarded, some members of Congress said the Netflix-Warner Bros. Discovery deal could harm consumers and Hollywood.
Cinema United, a global exhibition trade association, said Friday the deal poses an “unprecedented threat” to movie theaters around the world.
Seeking to allay some concerns, Netflix said the deal would provide subscribers with more shows and movies, increase U.S. production and long-term spending on original content, and create more jobs and opportunities for creative talent.
The company argued in deal negotiations that the combination of its streaming service with HBO Max would benefit consumers by lowering the cost of the bundled offering.
According to media reports, the company told Warner Bros. Discovery that it would continue to release the studio’s films in theaters in an attempt to allay fears that the deal would eliminate another studio and major source of theatrical releases.
Warner Bros Discovery shares were up 2.4 per cent at US$25 ($A38) in pre-market trading, while Netflix was down almost three per cent and Paramount was down 2.2 per cent. The third suitor, Comcast, had not changed much.
Paramount and Comcast did not immediately respond to requests for comment.
Analysts have said Netflix is driven by a desire to lock in long-term rights to popular shows and movies and is relying less on outside studios as it expands into gaming and is looking for new growth paths after the success of its crackdown on password sharing.
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