Exclusive negotiations have commenced between Warner Bros Discovery and Netflix for a potential sale of its core studio and streaming operations, a development that could profoundly reshape the film and television landscape.
An Intense Bidding War
Netflix is said to be competing against other major players like a rival studio and the cable giant, which owns Universal Studios and Sky, for control of the legendary Warner Bros studio, the premium HBO, and the Max streaming platform.
Sources indicate the company has proposed a substantial breakup fee of £3.7 billion if the acquisition not obtain antitrust approval in the United States.
The Financial Picture
With Warner Bros Discovery shares sitting around approximately $24 per share, its overall market cap stands at roughly $60bn. It is believed Netflix's offer ranges from $28 to $30 per share, which suggests a total bid value in the range of $70 billion to $75 billion.
Industry experts have cautioned that this consolidation could raise significant antitrust concerns, as it would unite two of the most dominant streaming services in the American market.
Assurances and Corporate Restructuring
As part of its bid, Netflix has provided guarantees that the Warner Bros film studio, behind major franchises like Batman and Harry Potter, would retain broad cinema distribution.
Prior to a final agreement, Warner Bros Discovery is expected to complete a pre-arranged separation of its linear TV networks, which include CNN, TBS, and TNT.
A Content Powerhouse
Should the deal proceed, Netflix would become the owner of HBO, creator of critically acclaimed hits including Game of Thrones, Succession, The Sopranos, and The White Lotus, plus an extensive archive of beloved TV series.
The studio officially began its sale process in October following overtures by multiple suitors.
Industry Concerns
The potential sale has not been without concern. Acclaimed filmmaker James Cameron, director of Titanic and the Avatar series, recently warned that a sale to Netflix could lead to a "catastrophic loss of enduring worth" for the creative sector.
At first, Paramount had been considered the leading candidate. It had also offered a $5 billion termination fee if approval issues.
Allegations of an Unfair Process
This week, Paramount argued in a letter that its offer was the most likely to gain regulatory clearance. Additionally, the company accused the seller of running an "unfair auction process" that unduly benefited Netflix, calling it "compromised" in official documents.
Officials from Warner Bros, Netflix, Comcast, and Paramount refused to comment on the ongoing negotiations.
