Netflix and Warner Bros. Discovery, Inc. have announced they have entered into a definitive agreement under which Netflix will acquire Warner Bros., including its film and television studios, HBO Max and HBO.
The announcement came hot on the heels of the news that 16 Warner Bros. Discovery channels will be removed from MultiChoice’s DStv at the end of this month, 31 December.
In a statement by Netflix co-CEO Ted Sarandos says their 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 favourites 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.”
Defining entertainment
Greg Peters, co-CEO of Netflix, continues, “This acquisition will improve our offering and accelerate our business for decades to come.
“Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities.
"With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
Storytelling companies
“Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most,” says David Zaslav, president and CEO of Warner Bros. Discovery.
“For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture.
"By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Value
The cash and stock transaction is valued at $27.75 per WBD share (subject to a collar as detailed below), with a total enterprise value of approximately $82.7bn (equity value of $72.0bn).
The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026.
Mounting concerns
However, the proposal has triggered mounting concerns from Hollywood workers, lawmakers and analysts.
CPI cites that "critics warn that absorbing a major competitor could diminish creative diversity and weaken bargaining power for talent.
“If I were tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix,” Jason Kilar, former Warner Media CEO, stated on X.
CPI adds that Unions have also voiced alarm.
“The potential Netflix/Warner Bros transaction is a consolidation that may serve the financial interests of shareholders of both companies, but which raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it,” the Screen Actor’s Guild (SAG-AFTRA) said in a statement provided to Al Jazeera.
Political backlash is also growing in Washington, it adds. "Per Al Jazeera, officials in the White House view the deal with “heavy scepticism,” and several members of Congress argue it would reduce consumer choice and drive up prices."
credit: bizcommunity