Netflix have bought Warner Bros. for $82.7 billion & will own DC, HBO and more!

What a comeback. Netflix, which was once the premiere source of online movie streaming, saw a massive exodus of titles from its platform when movie studios began launching their own streaming platforms to compete. Now, years later, Netflix is looking to beef up its selection of offerings again by acquiring one of Hollywood's longest standing movie studios – Warner Bros. Pictures and as of this morning, it appears they have done it. For a whopping $82.7 billion (roughly $12 billion above valuation), Netflix have officially won the bidding war and will soon own every single one of Warner Brothers' properties! Of course, this acquisition has been met with some contention as people worry this could spell doom for theatrical releases – however in a statement from Netflix, it sounds like they still intend to release WB films in cinemas.

This acquisition brings together two pioneering entertainment businesses, combining Netflix’s innovation, global reach and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling. Beloved franchises, shows and movies such as The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz and the DC Universe will join Netflix’s extensive portfolio including Wednesday, Money Heist, Bridgerton, Adolescence and Extraction, creating an extraordinary entertainment offering for audiences worldwide.

What it means for Movies

This deal now means Netflix will own and have total control over any and all intellectual film properties housed in the Warner Bros. vault – this includes the entire slate of DC superhero films (Batman, Superman, etc...) and all the Harry Potter films and spin-offs to name a couple high profile franchises.

What it means for Television

This deal also means Netflix will take ownershio of HBO and HBO MAX properties, which include shows like Game of Thrones and its spin-offs, Friends, The Big Bang Theory and many others. It's likely HBO / HBO MAX will be ported over to the Netflix platform, offered to members at a premium subscription. This will also dilute the offerings on CRAVE network, rendering that platform pretty much useless.

What it means for shareholders

If you're a Netflix shareholder, Netflix is anticipating this move will save the company $2-3 billion per year by the third year of this acquisition, expanding its subscriber base:

By offering members a wider selection of quality series and films, Netflix expects to attract and retain more members, drive more engagement and generate incremental revenue and operating income. The Company also expects to realize at least $2-3 billion of cost savings per year by the third year and expects the transaction to be accretive to GAAP earnings per share by year two.

If you're a Warner Bros. shareholder, you will receive $23.25 in cash and $4.50 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction.

The future of entertainment

Netflix have made a big swing by acquiring Warner Bros. and have once again positioned themselves in the running to step to other mega-conglomerates like Disney and Paramount. Disney's acquisition of Lucasfilm and 20th Century Fox propelled their streaming side to the stratosphere, taking a chunk out of Netflix’s portfolio. With the slate of Warner Bros. titles now under their belt, Netflix will most certainly recupe some of those losses in the near future.

The downside and evident concerns of this merger are that – less competition will lead to less innovation. Studios will be competing for a better bottom line, rather than competing for better quality content. With an emphasis on streaming, it's hard to believe Netflix will commit to distribute films to movie theaters, if doing so comes at a financial loss.

Time will tell. The acquisition is expected to be completed by Q3 of 2026. At that time, all of Netflix’s changes and adaptations to the acquisition will take full effect.

How do you feel about this merger? Let us know in the comments below!