HOLLYWOOD, LOS ANGELES (KABC) — It’s a mega deal for Hollywood — Netflix is acquiring Warner Bros. for approximately $83 billion.
It’s a deal that would put a lot of power in the hands of just one entertainment company.
Depending on where you stand, the iconic Netflix “Tadum” sound that plays with their logo before their original content could be considered the death knell for Warner Bros., or its wedding song.
Streaming giant Netflix has won the bidding war for Warner Bros. Discovery.
Either way, Netflix’s offer to buy up Warner Bros. is beyond a big deal.
“The amount of content, the amount of platforms, the amount of eyeballs involved in this is mega-bucks on a mega-level,” said Dominic Patten, the executive editor of Deadline.com.
The offer price of $82.7 billion would be the biggest sale of a Hollywood studio ever.
It combines Netflix — the world’s largest streaming company with more than 300 million subscribers — with the third largest streamer — home to HBO and a trove of popular entertainment franchises like DC Studios and Harry Potter.
Whether or not the deal would cast a good spell on the industry or a bad one is still up in the air.
“I’ve talked to a number of people who have said this is the worst thing ever. The former CEO of Warner Bros. said this was the worst thing ever,” said Patten. “But I’ve also talked to people who said this could be really the revitalisation that the industry needs after the tough years of the pandemic, the strikes and the wildfires.”
The Netflix deal comes as a surprise, not just for its size.
For the past several weeks, Warner Bros. had been in talks with Paramount, the presumed front-runner, mostly because it wanted to buy all of Warner Bros., unlike Netflix, which is carving out the company’s cable assets.
But even with the Netflix announcement, experts say the deal is far from done, with some serious antitrust issues facing them.
“Simply put, you take Netflix, the biggest streamer in the country and the world, with the third-biggest streamer in the country, HBO Max, and you do have more than 51% of the streaming audience,” Patten said.
Patten said the deal could push Hollywood and its movies further down the streaming line, with a bigger focus on the smaller screens at home instead of the big screens in theaters.
Gaining Warner’s legacy studios would mark a notable shift for Netflix, particularly its presence in theaters. Under the proposed acquisition, Netflix has promised to continue theatrical releases for Warner’s studio films, honoring Warner’s contractual agreements.
Netflix has kept most of its original content within its core online platform. But there have been exceptions, including qualifying runs for its awards contenders, including this year’s “Frankenstein,” limited theater screenings of a “KPop Demon Hunters” sing-a-long and its coming “Stranger Things” series finale.
“Our mission has always been to entertain the world,” Ted Sarandos, co-CEO of Netflix, said in a statement, adding that merging with Warner will “give audiences more of what they love.”
David Zaslav, CEO of Warner Bros. Discovery, added that merging with Netflix “will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Critics question potential effect on movie theaters and filmmakers
Critics said a Netflix-Warner combo would be bad news for moviegoers and for people who work in theaters. Cinema United – a trade association that represents more than 30,000 movie screens in the U.S. and another 26,000 screens internationally – was quick to oppose the deal, which it said “poses an unprecedented threat to the global exhibition business.”
“Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite,” Michael O’Leary, CEO of Cinema United, said Friday. “Theaters will close, communities will suffer, jobs will be lost.”
The Writers Guild of America sounded a similar alarm and called for the merger to be blocked.
The Producers Guild of America said the Netflix deal must prove that it protects workers’ livelihoods and theatrical distribution. “Legacy studios are more than content libraries – within their vaults are the character and culture of our nation,” the union added.
Warner Bros., which is 102 years old, is one of the “big five” studios left in Hollywood. If the Netflix sale goes through, the remaining legacy studios would be Disney, Paramount, Sony Pictures and Universal.
The Netflix-Warner deal also sent shock waves through Washington, on both sides of the aisle.
Democratic Sen. Elizabeth Warren, a longtime antitrust hawk, said the proposed merger “looks like an anti-monopoly nightmare.” And Sen. Roger Marshall, a Kansas Republican and close Trump ally, said the deal “raises serious red flags for consumers, creators, movie theaters and local businesses alike.”
The Associated Press contributed to this report.
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