Netflix is in exclusive talks to buy Warner Bros Discovery (WBD)’s film and television studios, plus the HBO Max Streaming service, according to reports.
The streaming giant has offered $28 a share and a $5bn breakup fee if regulators block the deal, per Bloomberg.
WBD effectively put itself up for sale in October while also exploring a company split, with Netflix, Comcast and Paramount Skydance emerging as the key bidders.
Like Netflix, Universal Pictures-owner Comcast was bidding for WBD’s film and TV assets, and David Ellison’s Paramount Skydance was looking to acquire the entire company.
Earlier this week, Ellison wrote an open letter to the WBD board calling the sale process “unfair and tilted”. The letter also cited “heightened regulatory risk”, both in the US and the European Union.
The WBD and HBO libraries hold a goldmine of valuable IP, including Batman and the other DC comics characters, and the Harry Potter and Game Of Thrones franchises.
Warner Bros has enjoyed a strong year at the box office, with hits such as Sinners, A Minecraft Movie and Weapons.
Early reaction
Following the reports, which have not been confirmed by either company, the Directors Guild Of America said the deal raises “concerns” for its members and that it plans to meet with Netflix to “better understand their vision for the future of the company”, according to Deadline.
Michael O’Leary, president and CEO of exhibition trade organisation Cinema United (formerly Nato), said in a statement that the proposed acquisition “poses an unprecedented threat to the global exhibition business”.
He added: “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.”
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