Key Points
- Netflix has agreed to purchase Warner Bros. Discovery for $72 billion.
- The deal would make Netflix a traditional Hollywood powerhouse, owning iconic assets like HBO.
- The biggest obstacle is expected to be a tough and lengthy review by government regulators worldwide.
- Netflix would have to honor existing contracts to release Warner Bros. films in theaters through 2029.
Netflix has agreed to a massive $72 billion deal to buy Warner Bros. Discovery, a move that would hand the streaming pioneer control of one of Hollywood’s most legendary studios. The deal would transform Netflix from a tech disruptor into a dominant force in traditional media, owning everything from HBO and CNN to the DC Comics film universe.
While the move is a huge strategic shift for Netflix, analysts and investors are approaching the news with caution. The biggest hurdle facing the deal is intense regulatory scrutiny.
Experts believe that getting approval from governments in the United States and around the world will be a “lengthy and difficult” process. Antitrust concerns will be high, as the merger would combine two of the largest players in the entertainment industry.
Many in Hollywood are also worried about the future of movie theaters. However, analysts point out that Warner Bros. has existing theatrical release contracts that run through 2029. Netflix has stated it would honor those obligations, meaning Warner Bros. films would continue to play in theaters for at least the next four years.
For Netflix, the deal may not be the immediate boost to its stock price that some investors crave. There is a wide overlap between Netflix and HBO Max subscribers, so the immediate growth in users might be limited.
Some see the acquisition as a long-term play to secure a massive library of content and production capabilities rather than a short-term win.
