It’s official: Netflix signs the purchase of Warner Bros. for $72 billion and prepares to build a mega-catalog

Netflix has emerged victorious in the fierce bidding war for Warner Bros. Discovery and has entered into exclusive negotiations to close a historic deal that could transform Hollywood. The platform has submitted the highest bid, beating out other giants such as Paramount Skydance and Comcast, and has signed a purchase agreement with Warner Bros. for $72 billion pending the spin-off of Discovery. This unprecedented move opens the door for Netflix to absorb Warner’s studios, its streaming assets—including HBO Max—and a catalog of million-dollar franchises, although the process will still have to undergo tough regulatory scrutiny.

Summary of Warner Bros. Discovery’s delicate situation in recent years

Warner Bros. Discovery’s situation had been marked for some time by growing financial pressure, with high levels of debt, continuous cutbacks, and various restructuring efforts to keep the conglomerate afloat that failed to bear fruit. The urgency to find liquidity would have pushed WBD to explore a comprehensive sale of its studios, its HBO Max streaming platform, and its historic catalog, including Harry Potter, The Sopranos, Game of Thrones, The Big Bang Theory, and the DC Universe.

The decline in its stock market value and uncertainty about the sustainability of its business model accelerated an “exit strategy” that seemed unthinkable not so long ago, but which has ended up becoming a silent auction between several giants in the sector.

Top-tier companies participated in the bidding, including Paramount Skydance, Comcast, and Netflix itself, which from the outset showed great interest in strengthening its catalog with this potential acquisition. After several rounds and a process that, according to The Wrap, has been marked by numerous tensions and accusations of favoritism, it was ultimately Netflix that presented the most attractive offer: a price of around $30 per share, making the streaming giant the winner of the bidding war and the sole negotiator in exclusive talks with Warner Bros. Discovery.

Netflix wins the bidding war for Warner Bros. Discovery and signs a purchase agreement, still in progress

Winning the bid and signing the purchase agreement does not mean that the acquisition is a done deal or will happen automatically. The agreement, valued at $72 billion, will have to pass through an extremely rigorous regulatory process, particularly with agencies such as the FTC (Federal Trade Commission) and the US Department of Justice, which will thoroughly examine the impact of a transaction of this scale on competition in the audiovisual industry.

In addition, the contract includes a break clause that could cost billions of dollars if the deal is blocked, adding an extra layer of risk and pressure for both companies.

If the takeover ultimately goes ahead, Hollywood would be reconfigured in a way not seen since the major studio mergers at the beginning of the century. Netflix would go from being “just” a streaming giant to controlling one of the most valuable catalogs in the history of film and television, with franchises capable of altering the balance of the global market.

For studios, creators, and viewers alike, the impact would be immense: a redistribution and drastic shift in the balance of power that could well redefine the future of audiovisual entertainment. And while regulators prepare their reports and companies iron out the final details, Hollywood holds its breath in anticipation of what could become the biggest turning point in the industry’s recent history.

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