Netflix is going to acquire Warner Bros. in a multi billion dollar deal, details explored

In a move that is certain to move markets, entertainment company Netflix is buying the entertainment giant Warner Bros. in a deal that is currently valued at $82.7 billion ($72 dollars equity value). There's also a breakup fee of $5.8 billion, so if Netflix decides to back out of the deal, well, it can, but the company has to give Warner Bros. this hefty sum.

This move will now give the streaming giant more power in Hollywood, given that the acquisition will bring major franchises like Harry Potter, DC Comics, Game of Thrones, and more with it. It will also bring HBO Max under its control, a major streaming platform that holds a user base of 130 million.

Ted Sarandos, the co-CEO of the streaming platform, said of the deal that,

"Our 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 favorites 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."

It is also reported that the company is likely to reduce the costs of HBO Max plans for more accessibility. But that isn't going to happen soon, given that the deal may take quite some time.

How this Netflix and Warner Bros. deal may affect the industry

This Netflix and Warner Bros. deal might mean shorter theatrical releases (Image via Getty)

It may not have been announced on a jumbotron, but we are officially in a streaming war. So many platforms are emerging and providing content to the public at the comfort of their couches. While this is a good approach when it comes to TV shows, it is certainly bad for films.

Following this deal, we may see shorter theatrical releases, which are certain to tank major films at the global box office. A conflict regarding this came up in 2021 when Scarlett Johansson sued Disney following the simultaneous release of Black Widow (2021) in theaters and on the streaming platform Disney+. It was resolved later.

As of this writing, Netflix is currently the biggest streaming platform in the world with over 300 million subscribers, followed by Amazon Prime (200 million) and Disney+ (131 million), according to FlixPatrol. These numbers are only expected to grow in the years to come.

A regulatory scrutiny might be on the cards for Netflix

This deal isn't going under the radar and is likely to garner the attention of regulators. If you have been following up with such acquisitions, a similar deal happened back in 2023, where, again, in a shocking move, Microsoft acquired the gaming giant Activision Blizzard in a whopping $69 billion deal.

Some believed that this would give Microsoft a monopoly over the gaming industry, especially because it now owns one of the greatest games ever made in history, Call of Duty. Interestingly, a movie based on it is also being developed by Paramount, a company that was also on the list of this bidding war for WB.