Netflix agrees to buy Warner Bros in £62bn deal

Netflix has agreed to buy Warner Bros. in a historic deal set to dramatically reshape the Hollywood film and TV industry.

The hugely popular streaming service announced that it would be acquiring Warner Bros Discovery (WBD) – the film and streaming businesses of Warner Bros – for $82.7bn (£62bn) after a weeks-long bidding war that also saw rival bids from Comcast and Paramount Skydance.

The total equity value of the deal is $72bn (£54bn), while the enterprise value of the deal is said to be $82.7bn (£62bn).

The takeover will see the streamer take control of some of WBD biggest franchises, including Harry Potter, Superman, and Batman, as well as the streaming service HBO Max, known for the shows Succession and Game of Thrones.

Netflix will also gain access to an extensive TV archive that includes Friends, which is scheduled to be removed from Netflix at the end of the year, and the classic movies such as Casablanca and Citizen Kane.

Netflix said the acquisition could make $2bn to $3bn in annual savings by the third year after the deal is complete.

The deal will close after WBD completes a proposed spinoff of its cable channels, which include CNN, TBS and TNT Sports in the US. That transaction is expected to be completed by late 2026 or 2027.

In a statement shared on Friday, Ted Sarandos, the co-chief executive of Netflix, said the acquisition “will improve our offering and accelerate our business for decades to come.”

“Together, we can give audiences more of what they love and help define the next century of storytelling.”

“Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most,” David Zaslav, President and CEO of WBD, said.

“By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

Could the price of Netflix subscriptions go up?

It is not known if the acquisition will affect Netflix’s millions of customers and their monthly subscription costs.

Currently, the streaming service’s subscriptions start at £5.99 per month for an ad-supported plan. That is the cheapest membership that allows subscribers to watch on one device at a time.

Their standard subscription plan is £12.99 per month, which allows people to watch ad-free and in HD and on two devices at a time.

It is not known how the takeover could affect Netflix customers. / Credit: AP

Their premium subscription is currently £18.99 per month. On that plan, viewers can watch in Ultra HD where available, and on four devices at a time.

Will there be fewer cinematic releases as a result of the deal?

Many have been wondering what the deal will mean to cinemas, and whether films made by WBD will continue to get theatrical releases.

A statement from the streamer says it “expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films”.

WBD has already negotiated its cinema release slate through until the end of 2029, so Netflix will have to honour these obligations.

Netflix tends to restrict its cinema releases to award contenders only. This year, Guillermo del Toro’s Frankenstein and Kathryn Bigelow’s A House of Dynamite had limited runs in cinemas before being released on the streamer.