Netflix announced early Friday it has struck a deal with Warner Bros. Discovery to acquire its film and television studios, along with HBO Max and HBO.
The blockbuster deal, totaling about $72 billion, will create a combined portfolio of many of Hollywood’s best known properties, adding “Harry Potter,” “Mission: Impossible,” DC Comics, MGM classics such as “Gone With the Wind,” and television shows such as “The Sopranos” and “Game of Thrones” to Netflix’s sprawling catalog.
The deal does not include the former Turner networks, including CNN, TNT and TBS, as well as the other linear television properties under the WBD umbrella. For much of this year, WBD has planned to split this part of the business off into its own company by 2026. That’s moving forward, at least for now.
Whether you’re a current or former Turner employee in Atlanta, a media obsessive or a mere subscriber, here’s what this deal means for you.
What happens next?
A couple of things. One, WBD must split into two publicly traded parts in 2026. The Netflix deal will close after the separation is completed, which it expects WBD to finish in the third quarter of next year.
The Netflix purchase of the studio and streaming businesses of WBD must receive approval from federal regulators, which could become a watershed moment in future merger and acquisition activity between legacy media brands and their Big Tech competitors. Netflix agreed to pay WBD a $5.8 billion termination fee if the deal does not receive approval, according to a Securities and Exchange Commission filing.
When completed, CNN, the Turner networks and other properties, such as HGTV and Discovery, will be operated under a company called Discovery Global that will be centered on news, sports, and scripted and unscripted programming.
As with any M&A, the spinoff of the networks and the sale of the streaming and studios business will inevitably usher in a period of belt-tightening. This could mean higher subscription prices for users, layoffs or other cost-saving measures. WBD still maintains a major presence in Atlanta, and whether its footprint will remain unchanged is unclear.
Why did WBD put itself up for sale?
After sustaining losses in viewership and advertising dollars owing to the decline of the cable business, WBD announced this year it was splitting itself into two publicly traded halves. One half, called Warner Bros., would include its namesake studio, HBO and the HBO Max streaming services, and the DC Comics film and television studio. The other, to be called Discovery Global, would feature legacy cable networks, including CNN and the other legacy Turner networks, digital products such as Discovery+ and Bleacher Report and would be saddled with much of the company’s debt.
Credit: John Nowak/Warner Bros. Discovery
Credit: John Nowak/Warner Bros. Discovery
Warner Bros., however, has been seen as the more valuable of the two properties.
In October, WBD said it was considering other options, including a sale, after receiving interest for both parts of the company and sale offers for the entirety of the business.
Paramount Skydance, now controlled by David Ellison, was one of WBD’s suitors. Paramount, which wanted all of WBD, was believed to be the front-runner in the auction, bringing with it a cultivated relationship with President Donald Trump. It reportedly offered an all-cash bid.
But after WBD accepted its second-round bids this week, Paramount called foul. In a letter to Warner CEO David Zaslav, Paramount’s attorneys said WBD appeared to have “abandoned the semblance and reality of a fair transaction process” and “embarked on a myopic process with a predetermined outcome that favors a single bidder.”
What does this change for viewers?
Netflix says its subscribers will have access to more titles and enhanced “viewing options.” The company said it intends to maintain theatrical releases for Warner Bros.’ films. During a Friday call with analysts, Netflix CEO Ted Sarandos said over time the theatrical windows “will evolve to be much more consumer friendly, to be able to meet the audience where they are quicker.”
“But our primary goal is to bring first-run movies to our members, because that’s what they’re looking for,” Sarandos said during the call.
It is unclear what will become of the HBO Max streaming service under the new deal. If the transaction is finalized and all of the properties are housed under the singular Netflix platform, consumers will have fewer independent streaming options to choose from. There is an upside to this — there is one less streaming service consumers will have to pay for — but the disadvantage is that there is less pressure on the streaming companies to keep their subscription rates low to stay competitive.
Have Netflix and WBD done business in Georgia?
Yes, both companies have been major players in Georgia’s film industry. Netflix just wrapped its fifth and final season of “Stranger Things,” which spent millions upon millions of dollars in Georgia and hired hundreds of locals in its nearly decade-long run.
Credit: TNS
Credit: TNS
Warner Bros. has filmed numerous features in Georgia, the most recent being James Gunn’s “Superman.” The director, who lives part-time in the state, has ambitions to film the second installment in Georgia.
What are people saying about the deal?
The reactions from lawmakers, movie theater operators and other stakeholders are mixed.
On Thursday, before the deal was announced, an anonymous group of feature film producers sent a letter via email to members of Congress expressing concerns over a potential economic and institutional meltdown in Hollywood, according to industry trade publication Variety. The group urged members of the House and Senate to speak out against the deal.
Sen. Elizabeth Warren, D-Mass., said in a statement the deal looks like “an anti-monopoly nightmare.” She said the acquisition would create one massive media giant with control of close to half the streaming market, “threatening to force Americans into higher subscription prices and fewer choices over what and how they watch, while putting American workers at risk.”
In a post on X, U.S. Sen. Mike Lee, R-Utah, said the deal “should send alarm to antitrust enforcers around the world.” If it materialized, the transaction would raise serious competition questions more than any transaction he’s seen in about a decade, he said.
“When Netflix has real competition, viewers and artists win,” Lee said on X, formerly known as Twitter.
European Cinema trade body the International Union of Cinemas, whose members operate 43,500 screens in 39 European countries, has opposed the deal, noting in a news release that it “fails in every regard.”
“Both in its words and actions, Netflix has time and again made it clear that it doesn’t believe in cinemas and their business model. Netflix has released only a handful of titles in cinemas, usually to chase awards, and only for a very short period, denying cinema operators a fair window of exclusivity,” UNIC CEO Laura Houlgatte said in the release.
What does this mean for the Turner networks and other properties under the Discovery Global umbrella?
Discovery Global is not part of the Netflix acquisition. It is possible WBD will restructure some of these properties or sell off all or parts of the company once it is spun off in 2026.
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