After three rounds of bidding, Netflix has come out as the winner to purchase Warner Bros. Discovery. The projected deal is certainly a landmark one, and one that will almost certainly change the Hollywood industry in one way, shape or form. With this deal, Netflix not only acquires the film studio Warner Bros and all its IP, including Harry Potter, The Lord of the Rings, and DC, but also HBO, HBO Max, which includes backlist titles like The Wire and Sopranos, as well as current shows like Task and House of the Dragon, and Warner Games, which includes Mortal Kombat and Hogwarts Legacy.
The steamer put in a deal worth $82.7billion, including debt, with 85% of the offer being in cash, which the streamer pulled from various loans. For weeks, Netflix has been going head-to-head with Comcast and Paramount Skydance to claim the rights to WBD. Now, the streamer enters conversations and the legal loopholes to acquire the Hollywood studio. The deal also includes a $5 billion breakup fee, where that should the deal fall apart for any reason, WBD will still get at least that amount, so really, either way, WBD wins.
Netflix has signalled its intent to continue to allow Warner Bros. to maintain current operations, meaning releasing their films theatrically. Currently, the studio has a deal to release movies on the big screen up until 2029, so time will tell if the streamer elects to renew that deal, or absorb all of WB’s future releases onto its streamer.
On the acquisition, the following statements were issued:
“This acquisition brings together two pioneering entertainment businesses, combining Netflix’s innovation, global reach and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling. Beloved 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 including Wednesday, Money Heist, Bridgerton, Adolescence and Extraction, creating an extraordinary entertainment offering for audiences worldwide.â€
“Our mission has always been to entertain the world. By combining Warner Bros.’ incredible library of shows and movies — from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends — with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.â€
When it comes to HBO and HBO Max, things get a bit more vague, as Netflix has stated that they’re thrilled to include the prestigious streamer’s catalogue into its own, but also signalled it would be keeping HBO Max alive in some capacity. In a statement, Netflix said, “By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose. This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content.â€
To me, that sounds a bit like what Disney+ is doing with FX and Hulu, keeping them as separate entities, but available on the streaming platform. I would expect a price hike that includes something like Netflix with HBO, based on their wording.
The deal is expected to take 12-18 months to close, pending review, antitrust verification, and the wrath of David Ellison, whose Paramount bid lost and has already indicated he will be challenging the deal. The Director’s Guild and theatre owners also will be scheduling meetings with Netflix to voice their concern over the deal, for fears the purchase would hurt cinemas in the long run (and potentially physical media sales as well, a worry this buyer has). Netflix seem to be signalling there’s nothing to fear, but of course, actions speak louder than words, and those groups will need to be convinced, even as Netflix promises the deal with create more opportunities. The deal will also see the separation of WBD’s other assets into a different company, branches such as CNN, HGTV, etc. This will be spun into Discovery Global, a new company not owned by Netflix. Expect that company in Q3 2026 and stay tuned here for more updates on this massive story.
