A $72 Billion Power Move — But What Happens When Netflix Controls Hollywood’s Most Storied Studio?

Netflix set off shockwaves across Hollywood after announcing a $72 billion agreement to acquire Warner Bros. Discovery, the storied home of “Harry Potter,” DC Studios and HBO Max. 

The deal, if approved, would join two of the world’s largest entertainment engines under one roof — and potentially alter how audiences everywhere watch movies and television.

The acquisition would fuse Netflix’s global streaming footprint and original hits like “Stranger Things” and “Squid Game” with Warner’s powerhouse film and television division. 

Together, the two companies would form a mega-entertainment force at a time when the industry is struggling to stabilize itself after years of rapid change.

“For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture,” David Zaslav, CEO of Warner Bros. Discovery, said in a statement. “By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

The cash-and-stock deal values Warner shares at $27.75 and places the company’s enterprise value at $82.7 billion, including debt. 

The transaction is expected to close within the next twelve to eighteen months, following Warner’s planned separation from its cable operations. CNN and Discovery networks are not part of the sale.

A Streaming Superpower — and Antitrust Flashpoint

Regulators are expected to scrutinize the merger closely, given its enormous implications for the streaming landscape. 

Netflix is already the global leader in streaming; gaining HBO and HBO Max would supercharge that dominance.

“Netflix is the top streaming service today. Now combined with HBO Max, it will absolutely cement itself as the Goliath in the streaming industry,” said Mike Proulx, vice president and research director at Forrester.

One of the biggest uncertainties is whether Netflix and HBO Max will remain separate apps or eventually fuse into a single platform.

Netflix maintained Friday that the addition of HBO content will give its members “even more high-quality titles from which to choose” as it works to “optimize its plans for consumers.” 

But others in the industry warn that the merger could create a towering entertainment giant with broad consequences for workers, creators and audiences.

The Future of Moviegoing Under Netflix Ownership

The implications for theaters remain uncertain. 

While the industry is recovering from the pandemic, it has not returned to pre-2020 levels. 

Domestic box office totals regularly exceeded $11 billion before the pandemic but only once surpassed $9 billion since — in 2023, boosted largely by Warner Bros.’ hit “Barbie.”

Cinema United president and CEO Michael O’Leary called the deal “an unprecedented threat to the global exhibition business” and urged regulators to examine its potential impact on consumers and theaters.

Netflix has increased its theatrical footprint in recent years, releasing awards contenders like Guillermo del Toro’s “Frankenstein,” Kathryn Bigelow’s “A House of Dynamite” and Noah Baumbach’s “Jay Kelly.” 

Warner Bros. currently holds three of the top five domestic films: “A Minecraft Movie,” “Superman” and “Sinners,” along with the Oscar frontrunner “One Battle After Another.” 

Unanswered Questions for Hollywood’s Biggest Filmmakers

A major unknown is how top directors will respond. 

Warner Bros. has long been a preferred home for filmmakers like Paul Thomas Anderson, Ryan Coogler, James Gunn, Denis Villeneuve, Clint Eastwood and Todd Phillips. 

Their continued loyalty may depend on whether Warner’s robust theatrical traditions endure.

The studio’s controversial 2021 decision to release films simultaneously in theaters and on HBO Max sparked a high-profile break with Christopher Nolan, who moved to Universal for “Oppenheimer” and next year’s “The Odyssey.”

 A change in strategy under Netflix could risk triggering similar fissures.

As for whether Netflix and HBO Max will merge into a single service, the company has not provided clarity. 

Bundles — like Disney and Hulu — remain a possibility. Netflix said Warner’s film library, which includes “Casablanca,” “Citizen Kane” and the “Harry Potter” franchise, will add “more high-quality titles” for viewers.

With billions at stake, the deal’s final shape now rests with regulators — and with a Hollywood eager, anxious and watching closely.