Netflix has entered exclusive talks with Warner Bros. Discovery to acquire the company’s film and television studio, as well as the HBO Max streaming service, Variety confirms.
The development comes after a weeks-long bidding war for the assets at Warner Bros. Discovery between Netflix and rivals Paramount Skydance and Comcast. Paramount Skydance, under the newly minted studio CEO David Ellison, had sought to acquire the entirety of Warner Bros. Discovery in an all-cash deal, while both Netflix and Comcast only submitted bids for the company’s studio and streaming businesses.
Prior to a potential sale to Netflix, Warner Bros. Discovery would complete its plans to spin off its cable channels, including CNN, TBS, TNT, TruTV and the Discovery Channel.
The news follows months of speculation and anxiety in the larger entertainment and media sector surrounding the potential sale of Warner Bros. Discovery. Ellison’s Paramount was the first and, arguably, most aggressive bidder at roughly $27 per share for the whole of Warner Bros. Discovery. Netflix and Comcast came in later to solidify an intense horse race.
The bidding war saw highest offers submitted Monday. Paramount went nuclear Thursday morning, accusing Netflix of impropriety surrounding its bid for the legendary studio, arguing that it “has a credible basis to believe that the sales process has been tainted by management conflicts, including certain members of management’s potential personal interests in post-transaction roles and compensation.”
Paramount’s offer submitted on Monday included financial backing of three Middle Eastern sovereign wealth funds, Variety reported.
Should Netflix and Warner Bros. Discovery reach a deal, it would mark a seismic transformation to the media landscape. As the leader in paid streaming services, Netflix has grown into far and away the biggest company in Hollywood. The streamer has never acquired a major studio before; it instead reached its dominant position by starting as the first premier streamer, beginning with a library of licensed content from traditional studios before developing its own projects in-house. A deal would give Netflix rights to the Warner Bros. library and its IP, including comic book characters at DC Studios, acclaimed HBO series, Harry Potter and over 100 years of output from the film studio.
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A potential acquisition is also expected to face antitrust scrutiny. On Thursday, Variety exclusively reported that a consortium of A-list talent signed an open letter to Congress, imploring members to speak out against a Netflix deal and arguing that the streamer would “effectively hold a noose around the theatrical marketplace” by reducing output to movie theaters and forcing down subsequent licensing fees for home video windows. The statement was signed anonymously, with an explanation that it was done so “not out of cowardice” but fear of retaliation, given Netflix’s considerable power in the marketplace.
From Variety US