With the deal with Warner Bros., Netflix now owns the HBO Network and all of its hit shows, such as The Sopranos and The White Lotus.
Netflix Inc. decided to buy Warner Bros. Discovery Inc. This is a historic deal that will make Netflix the biggest paid streaming service in the world and Warner Bros. Discovery one of the oldest and most respected companies in Hollywood.
In the deal that was made public on Friday, Warner Bros. owners will get $27.75 in cash and Netflix stock for each share they own. The business value of the deal is about $82.7 billion, and the total value of the shares is $72 billion. Warner Bros. will finish the planned split of cable stations like CNN, TBS, and TNT before the sale goes through.
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The deal is a big change in Netflix’s strategy; they’ve never done a deal this big before.
The streaming pioneer became Hollywood’s most valuable business without having a library or studio. It did this by renting other people’s shows and then making its own.
What’s the gap on the Netflix-Warner Bros. deal?
With this buy, Netflix now owns HBO and all of its hit shows, such as “The Sopranos” and “The White Lotus.” Warner Bros. also owns the huge studios in Burbank, California, as well as a huge collection of films and TV shows, such as “Friends” and “Harry Potter.”
Warner Bros. put itself on the market for sale in October after several people showed interest. Paramount Skydance Corp. and Comcast Corp. were also interested in buying it, besides Netflix. As the bids went on, things got heated. Paramount accused Warner Bros. of running an unfair process that supported Netflix.
Traditional TV is going through a big downturn as more people switch to streaming, which is where Netflix really shines. Warner Bros. Cable TV network’s business saw a 23% drop in income in the most recent quarter. This was because customers cancelled their contracts and sponsors went to other networks.
Netflix made $39 billion in sales in 2024. It began almost 30 years ago as a DVD rental service that sent discs to customers by mail. The 1920s saw the start of Warner Bros., which made more than $39 billion in sales.
Warner Bros. vs. Walt Disney: Netflix
Warner Bros.’s famous shows and movies give Netflix the strong shows it needs to stay ahead of competitors like Walt Disney Co. and Paramount Skydance. Antitrust officials in the US and Europe will definitely look closely at the deal, and there are already some red flags about it.
In a letter to US officials, California Republican Darrell Issa said that he was against any possible deal between Netflix and Warner Bros. because it could hurt customers. But Netflix has said that Alphabet Inc.’s YouTube is one of its biggest rivals.
Hollywood was also scared when Netflix showed interest in Warner Bros. The company has mostly refused to put films in theatres, though its own pictures have been shown in some theatres for short periods of time.
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