In a move described as the biggest in the history of entertainment broadcasting, Netflix announced that it has reached a final agreement to purchase the film and broadcast units of Warner Bros Discovery, including HBO, for $72 billion, in a deal that ignited the American media and was considered the end of what is known as the "global streaming war".
How will the deal be done?
The acquisition will be completed after the planned split within Warner Bros Discovery in 2026, where the group will be divided into two companies:
- First: Includes Warner Bros and HBO plus studio and broadcast operations.. which will go to Netflix.
- Second: "Discovery Global", which includes CNN and the cable channels and global networks, remaining independent.
Thus, Netflix actually swallows the most valuable half of the group, gathering under its umbrella libraries of Harry Potter, Game of Thrones, Casablanca, and other major cinema and television works.
Why is the deal historic?
- For the first time, three of the biggest names in the entertainment industry merged: Netflix + Warner Bros + HBO.
- According to a Bank of America report, "If Netflix buys Warner Bros then the streaming war is officially over.. and Netflix becomes the unbeatable force in Hollywood".. This merger gives Netflix an almost absolute dominance in the streaming market, turning it into the world's largest content production and distribution force, with no real competitor.
Why was the deal surprising?
Before the announcement, expectations were leaning towards Paramount winning the auction, especially after its successive offers, but Netflix changed the calculus with a bold offer and acceptance of the high severance fees imposed by Paramount, defeating major competitors like Comcast, and Paramount Skydance.
Financial details of the agreement
- Cash deal value (Equity Value): 72 billion dollars
- Total company value (Enterprise Value): approximately 82.7 billion dollars
- Value per Warner Bros share: $27.75
- Unanimous approval from the boards of directors of both companies.
The major obstacle: U.S. regulation
Yet, the road ahead for the deal is fraught with a major regulatory hurdle, as it will undergo review by specialized U.S. bodies, especially under the Trump administration which has already launched political objections, most notably from Senator Mike Lee who pointed out that the merger raises unprecedented concerns about monopoly and competition.
Analysts predict that regulatory bodies will handle the deal as a complete redefinition of the media industry, not just a commercial acquisition, which may prolong the review time and involve it in extensive political discussions.
How will the merger affect Hollywood?
The traditional structure of the Hollywood industry is expected to change significantly, as Netflix will own for the first time a giant film studio with a century-long history.
Experts believe this shift might lead to a reduction in TV and film production in favor of digital content, which may raise strong objections from unions and film institutions that fear the dominance of a single model over the industry.
Analysts also suggest that HBO, which is considered the jewel of American drama production, may face challenges in adapting within Netflix's production style, despite its long history with multiple owners that may help it overcome the transition.
Will this affect subscription prices?
With regard to consumers, reports expect the deal to lead to an increase in subscription prices globally, as merging HBO Max into Netflix will make the latter the most widespread and influential platform, giving it greater control over prices.
The merger may also lead to the closure or merging of some subsidiary platforms owned by Warner Bros in favor of consolidating content within Netflix, meaning that viewers will rely more on one platform to access most of their entertainment content.
Will the digital entertainment history change?
If the deal receives final approval, the world will witness the biggest media merger in the digital age; a merger that redraws the map of Hollywood and grants Netflix power and influence never possessed by any streaming platform before, as if it is the birth of a new "unopposed entertainment empire".
This was expressed by Netflix's CEO Ted Sarandos, who said that Warner Bros created the last century of entertainment, while Netflix looks forward to creating the next.
