Netflix enters definitive agreement to buy WBD’s streaming, studio assets for $82.7bn
Netflix has entered a definitive agreement to acquire Warner Bros Discovery’s studio and streaming assets for US$82.7bn, the companies confirmed on Friday.
As part of the blockbuster deal, which will give Netflix ownership of WBD’s studio businesses, HBO, HBO Max and a massive content library, the streaming leader said it will “maintain Warner Bros current operations.”
The companies said they expect the deal to close after the completion of WBD’s planned spin-off of its global linear networks division. Pending all regulatory approvals, which could still provide major hurdles, Netflix and WBD said they expect the transaction to close in 12-to-18 months.
The acquisition will result in US$2-3bn in annual cost savings, with the companies claiming the deal will create a “stronger entertainment industry.” It will also enable Netflix to “significantly expand US production capacity and continue to grow investment in original content over the long term, which will create jobs and strengthen the entertainment industry,” they said.
The transaction has been unanimously approved by the boards of directors of both Netflix and WBD.
“Our mission has always been to entertain the world,” said Netflix co-CEO Ted Sarandos.
“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.”
“This acquisition will improve our offering and accelerate our business for decades to come,” said fellow Netflix co-CEO Greg Peters.
“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.”
WBD president and CEO David Zaslav added: “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.
“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.”
Following the announcement of the deal, Netflix execs spoke to analysts about the deal, reiterating that they plan to keep running Warner Bros businesses in the same was as before, continuing to put films in theatres and continuing to produce content for third parties and sell library content outside of the combined group.
Sarandos said he sees “limitless” potential for bringing Warner Bros IP to life through Netflix originals, in addition to improving its content offering with the additional of Warner Bros’ deep experience in content development and franchise building.
One area where execs remained quiet, however, was how HBO and HBO Max fit into the longterm strategy under Netflix. Asked whether HBO could become a hub within Netflix, Peters said it was “quite early to get into the specifics of how we’re going to tailor this offering for consumers.” As it stands, HBO Max operates in around 100 countries, with high-profile launches set for the UK, Italy and Germany over the next few months.
Elsewhere, Sarandos claimed Netflix is “highly confident” in the regulatory process, and in Netflix’s ability to clear any potential antitrust hurdles.
“This deal is pro-consumer, pro-innovation, pro-worker, pro-creator, pro-growth, and our plans here are to work really closely with all the appropriate governments and regulators, but [we’re] really confident that we’re going to to get all the necessary approvals that we need,” he said.
Sarandos also shrugged off a question about whether another bidder could come in to challenge Netflix. “In terms of anyone else coming [in with another offer], we’ve signed our deal, and we are running full speed towards regulatory approval,” he said.
