Netflix to acquire Warner Bros. studio and streaming business for $72 billion

NEW YORK AP Netflix has struck a deal with Warner Bros Discovery the legacy Hollywood giant behind Harry Potter and Friends to buy its studio and streaming business for billion The acquisition would bring two of the industry s biggest players in film and TV under one roof and alter the entertainment industry landscape Beyond its namesake television and motion picture division Warner owns HBO Max and DC Studios And Netflix is ubiquitous with on-demand content and has built its own production arm to release popular titles including Stranger Things and Squid Encounter For more than a century Warner Bros has thrilled audiences captured the world s attention and shaped our civilization David Zaslav CEO of Warner Bros Discovery revealed in a message Friday By coming together with Netflix we will ensure people everywhere will continue to enjoy the world s largest part resonant stories for generations to come The cash and stock deal is valued at per Warner share giving it a total enterprise value of approximately billion The transaction is expected to close in the next to months after Warner completes its previously-announced separation of its cable operations Not included in the deal are networks like CNN and Discovery The bid will draw tremendous antitrust scrutiny Beyond TV and movie production the merger would bring two of the streaming world s biggest names Netflix and HBO Max under the same ownership If the transaction goes through Netflix will cement itself as the Goliath of streaming declared Mike Proulx a VP research director at Forrester This deal changes the calculus of the streaming wars representing a seismic shift in the entertainment industry What the future of both Netflix and HBO Max will look like has yet to be seen But if the two platforms remain separate subscriptions users may encounter more bundle promotions and boost content libraries more broadly Netflix on Friday noted that the addition of HBO and HBO Max offerings will give its members even more high-quality titles from which to choose and optimize its plans for consumers Still a few warn that consolidation across the industry will mean less variety of content and fewer choices for consumers down the road Gaining Warner s legacy studios would mark a notable shift for Netflix particularly its presence in theaters Under the proposed acquisition Netflix has promised to continue theatrical releases for Warner s studio films honoring Warner s contractual agreements for movie releases Netflix has kept the bulk of its original content within its core online platform But there s been exceptions including qualifying runs for its awards contenders including this year s Frankenstein limited theater screenings of a KPop Demon Hunters sing-a-long and its coming Stranger Things series finale Though the streaming company has a approach of not reporting ticket sales KPop Demon Hunters unofficially topped the box office in late August taking in nearly million Our mission has inevitably been to entertain the world Ted Sarandos co-CEO of Netflix explained in a message adding that merging with Warner will give audiences more of what they love Critics say a Netflix-Warner combo would be bad news for people who love to go to movie theaters and for those who work in them Cinema United a business association that represents more than movie screens in the U S and another screens internationally was quick to oppose the proposed deal which it mentioned poses an unprecedented threat to the global exhibition business Netflix s stated business model does not aid theatrical exhibition In fact it is the opposite Michael O Leary CEO of Cinema United disclosed Friday urging regulators to look closely at the impacts Theatres will close communities will suffer jobs will be lost Netflix had previously avoided venturing into other parts of the legacy entertainment landscape As in the last few days as October when Warner signaled that it was open to a possible sale of its business Netflix s Sarandos reiterated on an earnings call that the company had been very clear in the past that we have no interest in owning legacy media networks and that there was no change there We believe that we can be and we will be choosy Sarandos noted at the time without fully ruling out a prospective bid for Warner Friday s announcement arrives after a monthslong bidding war for Warner Bros Discovery Rumors of interest from Netflix as well as NBC owner Comcast started bubbling up in the fall But Skydance-owned Paramount which completed its own billion merger in August had also reportedly made several all-cash offers backed heavily by CEO David Ellison s family Paramount seemed like the frontrunner for particular time and unlike Netflix or Comcast was reportedly vying to buy Warner s entire company including its cable business housing networks like CNN and Discovery Warner reported its intention to split its streaming and studio operations from its cable business in June outlining plans for HBO HBO Max as well as Warner Bros Television Warner Bros Motion Picture Group DC Studios to become part of a new streaming and studios company Meanwhile networks like CNN Discovery and TNT Sports and digital products such as the Discovery streaming system and Bleacher Statement would make up a separate cable counterpart called Discovery Global Discovery Global is set to become a new publicly-traded company in a process now expected to be completed in the third quarter of Shares of Warner Bros rose nearly after U S markets opened Friday while shares of Netflix fell nearly Paramount fell nearly AP Film Writer Lindsey Bahr contributed to this review from Pittsburgh Source