The multimillion-dollar deal between audiovisual giants Netflix and Warner Bros. Discovery (WBD) for $82.7 billion outlines the formation of a streaming colossus, but faces obstacles from regulators and rivals, amid a division between film figures.
Under the purchase agreement, which settles a bidding battle, Netflix will incorporate WBD’s film and television studios and its HBO and HBO Max platforms, and both aim to complete the transaction in the third quarter of 2026, when WBD spins off its cable television channel unit Discovery Global.
Netflix is the largest paid streaming content company, with more than 300 million subscribers and key titles in contemporary pop culture, such as “Squid Game” or “Stranger Things”, with strong growth after the Covid-19 pandemic (2020), which boosted the consumption of digital entertainment compared to in-person entertainment.
The company has won Oscars in recent years by acquiring movie theaters in which it shows some original films for a short time so that they can compete for the awards, and generated debate about the impact of mass consumption content on the so-called seventh art.
Meanwhile, WBD, resulting from the merger between WarnerMedia and Discovery, is a key player in the world of cinema, owner of sagas such as “James Bond” and “Harry Potter”, the DC Comics franchise, and classics from the golden age, but it faces competition from streaming and changing consumer habits.
Continue reading: What does Netflix’s planned acquisition of Warner Bros. mean for theaters and titles like HBO and CNN?
Netflix trusts regulators, Paramount objects
The co-CEO of Netflix, Ted Sarandos, addressed doubts about the agreement and the future of Hollywood at a conference for investors and assured that he is not opposed to showing films in theaters, but believes that giving long exclusivity to theaters over streaming “is not consumer friendly.”
However, he maintained that WBD films will continue to be released in theaters.
Sarandos said he has “confidence in the regulatory process,” which will correspond to the Government of Donald Trump, who has not yet commented, but a senior official told CNBC that there is “high skepticism,” amid reports of Administration meetings with another major interest in Netflix, Paramount.
Paramount Skydance, run by David Ellison, whose family is close to Trump, had repeatedly bid for WBD and denounced bias in the process in an open letter Thursday, alleging that it favored Netflix.
So had Comcast, which controls Universal movie studios.
As reported by CNBC, citing anonymous accounts, Paramount on Thursday night offered $30 per share in cash, which would exceed Netflix’s final offer of $27.75 per WBD share.
Also read: Netflix agreed to purchase Warner Bros. Discovery for $82.7 billion
A ‘threat’ and a ‘nightmare’, but not for everyone
Democratic Senator Elizabeth Warren called the agreement an “antitrust nightmare,” alluding to a “media giant that controls almost half of the streaming market,” and denounced that under the Trump administration the regulatory process has become a “sinkhole of political favoritism and corruption.”
The largest association of cinemas in the US, Cinema United, warned for its part that the proposal “poses an unprecedented threat to the (film) exhibition business” and believed that it will negatively affect theaters of all sizes and around the world, given Netflix’s “business model”, which is unrelated to cinema.
The top executive of that association, Michael O’Leary, estimated that the company resulting from the agreement threatens “to eliminate 25% of the annual domestic box office receipts if Warner Bros. films that traditionally have a robust release in theaters disappear from theaters.”
Meanwhile, a group of “concerned film producers” today sent an anonymous letter to the US Congress for fear of labor reprisals asking for “the highest level of antitrust scrutiny” and expressing that Netflix will “destroy” the film market, Variety reports.
There was already division among film figures before the agreement: director James Cameron, for example, said in a podcast that the purchase of WBD by Netflix “would be a disaster” and expressed his doubts regarding Sarandos’ promises that he will continue showing films in theaters.
On the other hand, other figures have benefited from the Netflix model and their new stage may benefit them, such as director Greta Gerwig, who is preparing a new installment of the ‘Narnia’ saga, or figures such as Martin Scorsese or Guillermo del Toro, who have launched successful titles under the umbrella of the platform.
With information from EFE
