Now Streaming: Netflix to acquire Warner Bros. in $72B deal

“Now Streaming” is The Fly’s weekly recap of the stories surrounding the biggest content streamers.

STREAMING THIS WEEKEND: This weekend’s most notable new streaming content is comedy-drama film “Jay Kelly,” starring Adam Sandler and George Clooney, which is available to stream on Netflix (NFLX). Meanwhile, Amazon Prime Video (AMZN) subscribers can catch Christmas comedy film “Oh. What. Fun.,” starring Michelle Pfeiffer and Felicity Jones.

NETFLIX/WARNER BROS.: Early Friday, Netflix and Warner Bros. Discovery (WBD) announced they have entered into a definitive agreement under which Netflix will acquire Warner Bros., including its film and television studios, HBO Max and HBO. The cash and stock transaction is valued at $27.75 per WBD share, subject to a collar, with a total enterprise value of approximately $82.7B and equity value of $72.0B. The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026.

“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netix. “By combining Warner Bros.’ incredible library of shows and movies-from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends-with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”

The deal has received criticism both before and after the official announcement. Yesterday, in an op-ed for said the deal “looks like an anti-monopoly nightmare.” “A Netflix-Warner Bros. would create one massive media giant with control of close to half of the streaming market,” Warren said in a post on X, formerly Twitter. “It could force you into higher prices, fewer choices over what and how you watch, and may put American workers at risk. Under Donald Trump, the antitrust review process has also become a cesspool of political favoritism and corruption. The Justice Department must enforce our nation’s anti-monopoly laws fairly and transparently – not use the Warner Bros. deal review to invite influence-peddling and bribery.”

Meanwhile, Huber Research downgraded Netflix to Underweight from Overweight with a price target of $92, down from $137.50, following the company’s agreement to buy the film and television studios, HBO, and HBO Max streaming assets from Warner Bros. Discovery. The firm views this as “a very risky transaction,” particularly given its announced size of $82.7B enterprise value and fact that it marks “a significant change in strategy at Netflix” that the firm does not think is needed. The transaction is expected to take 12-18 months to close and the firm does not think Netflix’s stock will trade well through that period or likely for a while after closing, if the deal closes at all, the analyst tells investors.

Additionally, CNBC’s David Faber reported that Paramount Skydance (PSKY) had offered $30 per share in cash for all of Warner Bros. Discovery, a bid that was turned down. Later, CNBC’s Alex Sherman said that Paramount was weighing an even higher bid for Warner Bros.

PRIME VIDEO NEWS: On Wednesday, Amazon said that Prime Video customers in the U.S. can now easily and conveniently tune in to local, national, and world news coverage from major providers, including daily news roundups, financial market analyses, and talk shows, with the launch of a dedicated news destination that will be accessible directly on the Prime Video homepage. News networks will include ABC News Live (DIS), CBS News 24/7, LiveNOW from Fox (FOXA), CNN Headlines, and NBC News NOW (CMCSA). The dedicated news destination is currently rolling out and will become available to all U.S. customers for free by end of year. Customers can also access additional news offerings with subscriptions to Peacock Premium Plus, Paramount+, or FOX One among others.

AMAZON/SONY PICTURES: Additionally, Amazon announced that Sony Pictures Core (SONY) is available on Prime Video in the United States and Canada. The new channel features a collection of classic films and television series from Sony Pictures’ extensive library, all presented in the highest available quality through a subscription on Prime Video. Sony Pictures Core is a video service where customers can watch a curated selection of Sony Pictures movies and shows. Sony Pictures Core is available to all Amazon customers in the U.S. and Canada for $6.99 per month on Prime Video. The channel can be accessed directly through the Prime Video app on compatible devices.

STOCK PLAYS: Other publicly traded companies in the space include Apple (AAPL), FuboTV (FUBO), Roku (ROKU), and AMC Networks (AMCX).