Netflix Is Buying Warner Bros. and HBO Max in $82.7 Billion Deal

Holy cannoli, Batman. Literally, in this case. Netflix is about to buy Warner Bros. for $82.7 billion dollars. That is a number SO big we cannot wrap our minds around it. But since the fate of Batman is literally at stake, we understand that this is serious business. All we can say is, this is a major shift in the TV landscape. The historical studio and network are coming under the umbrella of THE disruptor. It’s a lot to take in. For now, Netflix promises the following things: It will maintain Warner Bros.’ current operations and it will “unite Warner Bros.’ iconic franchises and storied libraries with Netflix’s leading entertainment service, creating an extraordinary offering for consumers.” Once again we say, holy cannoli, Batman! Here are more details.

Netflix Is Buying Warner Bros., Separating It From Discovery. Global

In a release, Netflix discusses buying Warner Bros., noting that this combination will offer more choice and greater value for consumers and create more opportunities for the creative community. We have to admit, we’re not too sad to see Warner Bros. part ways from Discovery Global, Warner Bros. Discovery was making many questionable descisions for a long time now, which we hope Netflix does not repeat. Among them was shelving Batgirl (the north remembers), removing classic title after title from its library, shutting down Cartoon Network, and almost preventing us from the wonder that is Coyote vs. Acme.

In this deal, “Netflix, Inc. (the Company) and Warner Bros. Discovery, Inc. (WBD) announced they have entered into a definitive agreement under which Netflix will acquire Warner Bros., including its film and television studios, HBO Max and HBO.”

What Does Netflix Buying Warner Bros. Mean for DC Studios, Game of Thrones, and More?

Yes, Netflix buying Warner Bros. means that Game of Thrones and the DC Universe will join Stranger Things, Wednesday, and more after this acquisition. For now, Netflix promises no change to “Warner Bros.’ century-long legacy of world-class storytelling.” It shares, “Warner Bros.’ studios are world-class, with Warner Bros. recognized as a leading supplier of television titles and filmed entertainment. HBO and HBO Max also provide a compelling, complementary offering for consumers. Netflix expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.”

We’re liking where the DC Universe is heading and Warner Bros. has historicially (before Warner Bros. Discovery) known what it’s doing, so we’re crossing our fingers Netflix will allow a return to form when it buy Warner Bros.

Netflix notes, “This acquisition brings together two pioneering entertainment businesses, combining Netflix’s innovation, global reach and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling. Beloved franchises, shows and movies such as The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz and the DC Universe will join Netflix’s extensive portfolio including Wednesday, Money Heist, Bridgerton, Adolescence and Extraction, creating an extraordinary entertainment offering for audiences worldwide.”

Does This Mean HBO Max Will Close and Only Netflix Will Remain?

Netflix doesn’t confirm the fate of HBO Max as its own streaming platform. However it does say, “By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose. This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content.” So it sounds like HBO’s programming will somehow come under the Netflix umbrella.

Will Warner Bros. Movies Still Release in Movie Theaters?

Netflix shares that Warner Bros. movies WILL still release in theaters. “It’s not like we have this opposition to movies into theaters,” Netflix CEO Ted Sarandos shares, “My pushback has been mostly in the fact of the long exclusive windows, which we don’t really think are that consumer friendly, but when we talk about keeping HBO operating, largely as it is, that also includes their output movie deal with Warner Bros., which includes a life cycle that starts in the movie theater, which we’re going to continue to support.”

But Sarandos also hinted that any Warner Bros./Netflix movies in theaters would stay there for a much shorter time, “I wouldn’t look at this as a change in approach for Netflix movies or for Warner movies… I think, over time, the windows will evolve to be much more consumer-friendly, to be able to meet the audience where they are quicker…I’d say right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through through Warner Bros. and Netflix movies will take the same strides they have, which is, some of them do have a short run in the theater beforehand, but our primary goal is to bring first run movies to our members, because that’s what they’re looking for.”

Netflix Is Buying Warner Bros. For an ENORMOUS Amount of Money

We won’t get into too much of the stakeholder/acquisition stuff. But, Netflix acquiring Warner Bros. for $82.7 billion (equity value of $72.0 billion) is SO MUCH MONEY.

Will You Have to Pay More For Netflix After It Buys Warner Bros.?

We’re going to go out on a limb and say you’ll probably see a Netflix price increase after the acquisition of Warner Bros. is complete. But we can’t swear to it. They are out $82.7 billion, sooooo… Hopefully, you won’t have to pay anything for HBO Max anymore, though, a notably expensive streaming platform. But we will have to wait and see.

When Will Netflix Officially Buy Warner Bros.?

A release notes the transaction between Netflix and Discovery Global is expected to close in 12-18 months. What that means for consumers is hard to say.

Netflix Shares the Strengths of This Acquisition

Below are some of the pros of Netflix’s buying Warner Bros.:

• Complementary strengths and assets: Warner Bros.’ studios are world-class, with Warner Bros. recognized as a leading supplier of television titles and filmed entertainment. HBO and HBO Max also provide a compelling, complementary offering for consumers. Netflix expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.
• More choice and greater value for consumers: By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose. This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content.  
• A stronger entertainment industry: This acquisition will enhance Netflix’s studio capabilities, allowing the Company to significantly expand U.S. production capacity and continue to grow investment in original content over the long term which will create jobs and strengthen the entertainment industry. 
• More opportunities for the creative community: By uniting Netflix’s member experience and global reach with Warner Bros.’ renowned franchises and extensive library, the Company will create greater value for talent—offering more opportunities to work with beloved intellectual property, tell new stories and connect with a wider audience than ever before.
• More value for shareholders: By offering members a wider selection of quality series and films, Netflix expects to attract and retain more members, drive more engagement and generate incremental revenue and operating income. The Company also expects to realize at least $2-3 billion of cost savings per year by the third year and expects the transaction to be accretive to GAAP earnings per share by year two.

The CEOs Chime in

Ted Sarandos, co-CEO of Netflix shares, “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.” 

Greg Peters, co-CEO of Netflix adds, “This acquisition will improve our offering and accelerate our business for decades to come. 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.”

David Zaslav, President and CEO of Warner Bros. Discovery, meanwhile shares, “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.”

Our Minds Are Still Blown

We honestly don’t know what to think. Is this good or bad? It’s a change. We’ll have to see what implications this has for the streaming landscape and us all.