Netflix, the world’s leading streaming service, has entered into a definitive agreement to acquire legacy studio Warner Bros., including its premium cable and streaming divisions, HBO and HBO Max.
The deal is valued at $27.75 per share of Warner Bros. Discovery (WBD). The acquisition does not include WBD’s Global Network Division, which runs linear television outlets CNN, TNT Sports, and Discovery, as well as free-to-air channels across Europe, and digital products such as Discovery+ and Bleacher Report. The Global Networks Division will instead be separated into a new publicly traded company, Discovery Global. Netflix would only assume control of Warner Bros. until the separation, which is expected to be completed in Q3 2026. That puts a 12-18 month timeframe for Netflix’s deal to take over Warner Bros. to be completed.
“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,” said David Zaslav, President and CEO of Warner Bros. Discovery in a statement. “For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Netflix has confirmed it expects to maintain Warner Bros.’ current operations, including the theatrical release of its films. The streamer did not provide any details on whether those theatrical releases would extend beyond any pre-existing agreements between filmmakers and Warner Bros. It has neither commented on the length of theatrical exclusivity any of those releases would receive, nor on the presence of a theatrically-driven marketing campaign to support them. Netflix has given select theatrical releases limited marketing support under exclusivity windows that have extended up to 30 days, after which they are made available on its SVOD streaming platform.
Cinema United, the trade association representing over 30,000 screens in the United States, voiced its opposition to the acquisition, citing it would risk removing 25% of the annual domestic box office.
“The proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business. The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,” said Cinema United President and CEO Michael O’Leary. “Cinema United stands ready to support industry changes that lead to increased movie production and give consumers more opportunities to enjoy a day at the local theatre. But Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite. Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition, and the entertainment industry.”
“Netflix’s success is television, not movies on the big screen. A true commitment to exhibition means a robust slate of movies with a meaningful period of theatrical exclusivity supported by marketing. Sporadic and truncated theatrical releases to meet awards criteria in a handful of theatres is not a commitment to exhibition,” O’Leary added. “Movie theatres are cultural and economic anchors of communities of all sizes—we are a Main Street industry. Research shows that for each dollar spent in a local movie theatre, an additional $1.50 is spent in surrounding businesses in the community—restaurants, bars, shopping centers, and transportation. That is what is at risk here if we sanction fewer movies in the marketplace. Theaters will close, communities will suffer, jobs will be lost.”
UNIC, the trade association representing cinemas across 39 European territories, joined Cinema United in voicing their opposition to the deal.
“Were it to be allowed to go ahead, this deal represents a double risk,” said Laura Houlgatte, CEO of UNIC. “If a studio disappears, that will inevitably mean that cinemas will have fewer films to screen for their audiences, leading to reduced income and significant cinema closures and job losses in the industry. And in many ways, this is worse than the acquisition of one movie studio by another, as we saw with Disney’s acquisition of 20th Century Fox a decade or so ago. 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”.
“Europe’s cinemas, from independent one-screen theatres to larger arthouses and multiplexes, have unique role in the communities they serve in bringing people together for a shared cultural experience,” added Phil Clapp, president of UNIC and CEO of the UK Cinema Association. “In doing so, they cater for every taste, ensuring that the widest possible audience can discover and enjoy a rich variety of films. Beyond their direct contribution to GDP, job creation, taxes and rental payments, cinemas also create immeasurable value for the entire film industry. Regulators evaluating the planned acquisition of Warner Bros by Netflix must take into account the potential risk any deal presents to every facet of that role, and its consequences for the cinema exhibition sector and the wider public. Any reduction in the diversity and quality of content arising from this acquisition, combined with the potential loss of cinemas and jobs, would have a profoundly damaging impact on Europe’s cultural landscape. UNIC will do all it can to make those potential impacts – and its strong opposition to this deal – clear to competition authorities in Europe and elsewhere.”
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