Warner Bros Discovery TV, the studios that produce movies, and the streaming division will now be owned by Netflix, in a deal that would give the streaming pioneer control of one of Hollywood’s most cherished and oldest assets for $ 72 billion.
Following a weeks-long bidding war between Paramount-Skydance and Netflix, the agreement was announced on Friday. According to CNBC, which cited sources with knowledge of the situation, Paramount offered $ 28 per share while the streaming giant offered $ 30 per share.
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Each Warner Bros Discovery shareholder will receive $ 23.25 in cash and about $ 4.50 in Netflix stock per share, giving Warner a share price of $ 27.75, or about $ 72.75 in equity and $ 82.75 in debt, under the Netflix agreement.
Warner Bros. would pay Netflix $2.8 billion if the deal expires, whereas Netflix has offered Warner Bros.
By the third year after the deal closes, Netflix said it anticipates generating at least $2 billion to $3 billion in annual cost savings. Following the merger’s conclusion, Warner CEO David Zazlav will step down as well.
The agreement would grant Netflix access to well-known franchises like “Game of Thrones,” “DC Comics,” and “Harry Potter.” Additionally, it is anticipated that the purchase would significantly increase Netflix’s purchasing power, which is already a dominant force in Hollywood, raising antitrust concerns in Europe and the United States.
According to Netflix, the agreement will open up more positions and opportunities for talent. The company’s representatives were unable to provide any information to Al Jazeera about how that would turn out.
In a post on the social media platform X, former Warner Media CEO Jason Kilar stated, “If I were tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix.”
The Writers and Screen Actors Guilds were unavailable for comment on Al Jazeera’s request for comment.
If approved, HBO Max’s 128 million subscribers will increase to Netflix’s more than 300 million, making them a formidable competitor.
The deal poses an “unprecedented threat” to movie theaters around the world, according to Cinema United, a trade association for global exhibitions.
This will raise eyebrows and concerns in light of the current regulatory environment. According to PP Foresight analyst Paolo Pescatore, the combined dominant streaming player will be closely scrutinized, according to Reuters news agency.
Washington scathing
Some members of Congress warned that a Netflix–Warner Bros. Discovery deal might harm Hollywood and consumers even before the bids were in. According to CNBC, which cited an unnamed senior administration official, the administration views it with “heavy scepticism.”
The merger, according to US Senator Elizabeth Warren, will be an “anti-trust nightmare” and will restrict consumers’ choices, she said.
A Netflix-Warner Bros would establish a “major media giant” with the power to control close to half of the streaming market, threatening to put American workers at risk by putting more money on the table with higher subscription costs and fewer options for what and how to watch.
The deal was described as a “nightmare,” according to US Representative Pramila Jayapal, who also serves as president of the House Monopoly Busters Caucus.
In a post on the social media platform X, Jayapal wrote, “It would mean more price increases, ads, and cookie-cutter content, less creative control for artists, and lower pay for workers.” “Some a few corporations already have the power to censor free speech,” the media industry says. She continued, “The government must step in.”
Republicans claimed that the agreement would stifle consumers’ choice and give Netflix an unacceptably large share of the streaming market.
US President Donald Trump’s criticism of the news organizations that cover his administration highlights the proposed merger. Close ties exist between the Trump administration and CBS News, a company owned by Paramount-Skydance.
David Ellison, the son of Oracle cofounder Larry Ellison, is the company’s founder and director. The older Ellison is regarded as having a close relationship with Trump. Paramount-Skydance has been accused of making decisions in accordance with the White House’s wishes, including that Stephen Colbert, the host, had cancelled The Late Show. According to the network, the decision was not based on politics.
Even though Weinstein has no prior experience with journalism, has been a Trump donor, and had previously led a conservative think tank, the network appointed Kenneth Weinstein as ombudsman and to investigate allegations of bias in September. Bari Weiss, a conservative opinion writer with no prior television experience, was appointed in charge of the network’s news division in October.
CNN is owned by Warner Bros. Discovery, and there are concerns that Paramount might acquire the network’s leadership, similar to those concerns about CBS.
