Netflix Devours Warner Bros. Discovery Whole in $72-Billion Acquisition

David Zaslav awoke this morning with the weight of Warner Bros. on his shoulders, a media giant woven together from the vestiges of a bygone era of cable television and the relentless tugging of streaming. By midday, he had inked a path forward that hands Warner Bros to Netflix, thus cutting ties with the old world of linear networks.

Warner Media stockholders receive $27.75 per share in cash and Netflix stock, valuing the entire studio and streaming business at $72 billion in equity, or $82.7 billion when debt is factored in. Zaslav described it as a marriage of two narrative titans, and it truly feels like a partnership made to stay, one that will ensure that stories continue to be told for decades to come. Then there was Ted Sarandos, Netflix’s co-head honcho, who really blew it up, claiming that this is an opportunity to take Warner’s masterpieces and blend them with their own Netflix originals, essentially redefining what entertainment is.

Things became heated over the last few weeks, with Comcast and Paramount attempting to sway the contract, but Warner ultimately decided to go with Netflix. The idea is that Netflix is a better fit for the film and streaming arms of the business now that the old cable side has been spun off into this new entity called Discovery Global, which will carry all of the CNNs, TNT Sports, and Euro Discovery channels and will be listed on the stock exchange by the autumn. The real handover to Netflix will take some time, presumably between 12 and 18 months, depending on what authorities and shareholders believe.

Until then, Warner will continue to conduct business as usual, with scripting rooms and soundstages. Sarandos kept harping on the consumer viewpoint, stating that this will imply a lot more options for viewers and a whole new set of chances for producers. On the other hand, there are companies like Paramount that are skeptical about the whole affair and believe it will be difficult due to antitrust regulations. Netflix has remained very quiet about the situation, and it appears that they are relying on their global reach to iron out any wrinkles.

Warner Bros. is going to unleash a treasure trove of content, including shadowy Casablanca vibes and Citizen Kane’s towering ambition, as well as the magical world of Harry Potter and dragon-slaying from Game of Thrones. Then there are HBO’s crown jewels, The Sopranos’ gritty street talk, Friends’ easy laugh, and The Big Bang Theory’s wacky science, which all fit neatly into Netflix’s most-watched roster. Toss in a little bit of The Wizard of Oz’s Technicolor splendor, and you’ve got a big buffet of episodes and films featuring DC superheroes alongside Netflix’s own ensemble of Stranger Things misfits, or the high-speed chases of Extraction. Greg Peters, Netflix’s other co-chief, stated that one of the major benefits of this agreement is that they can now produce a lot more TV and movies in the United States, which means way more original content.

HBO Max remains a distinct service with its own edge and personality, whilst Netflix experiments with various ways to bundle its offerings, such as a la carte alternatives. Warner Bros. films will continue to be released in theaters first, paying homage to the enchantment of the large screen that many people desire to experience in a traditional cinema. They will also continue to sell to other networks as usual to ensure a consistent supply of fresh material. According to Peters, HBO has a strong pull with viewers, which makes it an excellent tool for creating packages that appeal to a variety of tastes and inclinations. For the creators, this means that their work will reach a far larger audience, both to Warner’s big brands and Netflix’s knack for creating very popular content like Squid Game or Bridgerton. Zaslav imagined a future in which all of these disparate worlds began to intersect, and new followers emerged out of the woodwork who became captivated. The two boards unanimously approved the transaction, a rare moment of unity in a typically fragmented business.
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