Netflix acquires Warner Bros. Discovery studios for $72 billion
Netflix has secured a $72 billion deal to acquire Warner Bros. Discovery, giving it control of iconic series such as “Game of Thrones” and “Harry Potter.”
Netflix has agreed to buy Warner Bros. Discovery’s television and movie studios and streaming division for $72 billion. It’s a massive deal that will give the streaming pioneer control of one of Hollywood’s most valuable and oldest assets.
The agreement, announced on Friday, Dec. 5, comes after a weeks-long bidding war in which Netflix took the lead with an offer of nearly $28 per share, outpacing Paramount Skydance’s nearly $24 bid for the entire Warner Bros. Discovery, including the cable TV assets that will be spun off.
Warner Bros. Discovery stock closed at $24.50 on Thursday, December 4th, giving it a market capitalization of $61 billion.
Netflix and Warner Bros. Discovery deal set to reshape media landscape
Netflix has traditionally built its own catalog of franchises, but acquiring major franchises like “Game of Thrones,” “DC Comics” and “Harry Potter” is a “rare opportunity,” Netflix co-CEO Ted Sarandos said in a call about the deal Friday.
“Together, we can give our viewers even more of what they love and help define the next century of storytelling,” Sarandos said in a statement.
A merger between Netflix and Warner Bros. Discovery could further tilt the balance of power in Hollywood in favor of the streaming giant, helping it avoid competition from Walt Disney Co. and Paramount, which is backed by the Ellison family.
“If this deal passes regulatory approval, it would solidify Netflix’s position as the Goliath of streaming services with the combined weight of HBO Max and the content studios behind it,” said Mike Proulx, director of research at technology advisory firm Forrester. “This deal changes the calculus of the streaming wars and represents a seismic shift in the entertainment industry.”
Will a deal between Netflix and Warner Bros. Discovery materialize? May be subject to strong antitrust laws
Analysts say Netflix is driven by a desire to secure long-term rights to hit shows and movies and reduce its dependence on outside studios as it looks to expand into gaming and find new avenues of growth following its success in cracking down on password sharing.
But the deal is likely to come under intense antitrust scrutiny in Europe and the U.S., as it would give the company access to an expanded network of about 300 million Netflix subscribers and about 130 million HBO Max streaming subscribers.
Paramount, led by David Ellison, son of Oracle founder Larry Ellison, was expected to be the leader in the bidding war after Warner Bros. Discovery launched a bidding war with a series of unsolicited offers. Ellison and Paramount have close ties to the Trump administration and questioned the sale process in a letter earlier this week alleging preferential treatment to Netflix.
To allay concerns about market concentration, Netflix argued in contract negotiations that combining its streaming service with HBO Max would lower the cost of the bundled service and benefit consumers, Reuters reported on Tuesday.
“This agreement supports consumers, innovation, workers, creators and growth,” Sarandos said, expressing confidence that the deal will be completed.
Consumers will now be able to subscribe to Netflix and Warner Bros. Discovery packages, increasing “value for consumers,” he said.
Netflix will continue to release Warner Bros. Discovery movies, fending off concerns that the deal could eliminate another studio or major source of theatrical films.
Facts about Netflix’s cash and stock deal with Warner Bros. Discovery
Netflix’s stock fell nearly 3% in premarket trading, while Paramount’s fell 2.2%. The deal for a third suitor, Comcast, was little changed.
Under the deal, each Warner Bros. Discovery shareholder will receive $23.25 in cash and approximately $4.50 in Netflix stock per share, valuing Warner at $27.75 per share, or approximately $72 billion in equity and $82.7 billion including debt.
Sarandos said the transaction is expected to close within 12 to 18 months, with Warner Bros. Discovery spinning off its global networks division Discovery Global as a separate publicly traded company, currently scheduled to close in the third quarter of 2026.
Netflix said it expects to save at least $2 billion to $3 billion a year by the third year after the deal closes.
Contributed by: Reuters
Mike Snyder is a national trends news reporter for USA TODAY. You can follow him on Threads, Bluesky, and X, and email him at: mike snyder & @mikegsnider.bsky.social & @mikesnider & msnider@usatoday.com
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