How Netflix Won Warner Bros Discovery
Published Cached
Reuters
Key Facts
- Deal announced for $72 billion: Netflix said it would acquire Warner Bros Discovery’s TV, film studios and streaming division, a transaction that shapes the future of global entertainment. [1]
- Auction kicked off Oct 21: Warner Bros Discovery initiated a public auction after rejecting unsolicited offers from Paramount Skydance, with Netflix entering the bidding process amid competition. [1]
- Catalog value drives rationale: Netflix senior leadership saw value in Warner Bros’ deep library, noting library titles can account for a large share of viewing and subscriber engagement. [1]
- HBO Max and studio fit: The acquisition would integrate HBO Max and Warner Bros’ studio operations, leveraging Netflix’s experience to accelerate growth and expand content reach. [1]
- Other bidders and strategy: Paramount and NBCUniversal/Comcast pursued competing approaches, with discussions around combining or reshaping entertainment assets; Netflix favored a cleaner, immediate structural acquisition. [1]
- Record breakup fee to reassure regulators: Netflix proposed a $5.8 billion breakup fee, signaling confidence in regulatory approval and signaling seriousness of the bid. [1]
Who Said What
- Netflix executives and advisers – “No one lights $6 billion on fire without that conviction.” [1]
- Sources familiar with deliberations – “the board favored Netflix’s deal, which would yield more immediate benefits over one by Comcast.” [1]
Some Context
- Warner Bros Discovery spin: The company planned to split into two public entities, separating cable networks from Warner Bros studios and HBO/HBO Max, influencing bidders’ strategies. [1]
- Breakup fee significance: A large breakup fee is often used in mega-deals to deter other bidders and reassure regulators about the seriousness and finalize terms. [1]
Source: Reuters article on the Netflix-Warner Bros Discovery deal. [1]