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Netflix introduced the definitive buy Warner Bros Discovery on Friday, together with its movie and tv studios, HBO Max and HBO, after a high-stakes months-long bidding battle that included rival big-name studios resembling Paramount and Comcast.
In a press release, the streaming large confirmed the mammoth $82.7 billion (€71bn) deal, which is being framed as a bringing collectively of “two of the best storytelling corporations on this planet to deliver to much more individuals the leisure they love to observe essentially the most,” Warner Bros CEO and President David Zaslav mentioned.
“This acquisition brings collectively two pioneering leisure companies, combining Netflix’s innovation, international attain and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling,” the announcement continued.
The deal would put Final Week Tonight and the remainder of HBO’s late-night and comedy slate underneath Netflix’s company roof however the corporations say they intend to maintain Warner Bros’ operations working as-is, at the very least initially.
Promoting off the silverware
Simply months in the past, Warner Bros Discovery was nonetheless weighing how a lot of its crown jewels it was keen to promote.
In June it set out plans to separate into two listed corporations, with a streaming and studios arm constructed round Warner Bros, HBO, HBO Max and the group’s movie and TV libraries and archives, and a separate International Networks division, later branded Discovery International, holding CNN, TNT Sports activities, Discovery’s channels and companies resembling Discovery+ and Bleacher Report.
This meant that any purchaser might purchase solely the studio and streaming property, whereas the legacy cable networks have been carved off right into a standalone enterprise.
Paramount, backed by Skydance, was among the many vultures circling on the time, reportedly making multiple majority-cash strategy that was rebuffed by Zaslav.
Nevertheless it was not clear from these early stories whether or not any profitable bidder would find yourself securing HBO in addition to the Warner Bros studio, or whether or not the corporate would attempt to hold its status pay-TV model on a tighter leash.
The Netflix deal removes that ambiguity. Beneath the brand new construction, Discovery International — the cable networks enterprise — will probably be spun off as a separate firm, whereas Netflix acquires all the Warner Bros unit, explicitly together with HBO and HBO Max.
“This separation is now anticipated to be accomplished in Q3 2026, previous to the closing of this transaction … (that includes the separation of) premier leisure, sports activities and information tv manufacturers all over the world together with CNN, TNT Sports activities within the US, and Discovery, free-to-air channels throughout Europe, and digital merchandise resembling Discovery+ and Bleacher Report,” the Netflix assertion mentioned.
The boards of each corporations have signed off on the deal, however it nonetheless faces a sequence of approvals from competitors regulators within the US and abroad, in addition to a ultimate shareholder vote at Warner Bros.
Competitors authorities are prone to study whether or not combining Netflix’s dominant streaming service with HBO Max and one in all Hollywood’s largest studios would give the enlarged group an excessive amount of energy over premium TV, movie and licensing, and the regulatory gauntlet is prone to lengthen the ultimate shut by 12-18 months.