Netflix to buy Warner Bros. in historic deal

Critics say takeover would harm theaters, consumers and film industry workers.

- BY MEG JAMES

First, Netflix upended Hollywood. Now, the streaming giant is buying a historic piece of it.

Netflix prevailed in a contentious bidding war to buy Warner Bros., agreeing to pay $72 billion for the storied Burbank film and television studios, its spacious lot, HBO and the HBO Max streaming service.

The two companies announced the blockbuster deal early Friday, a proposed baton pass that would give Netflix such beloved characters as Batman, Harry Potter, Jon Snow and Fred Flintstone.

"Warner Bros. has some of the best entertainment in the world," Netflix Co-Chief Executive Ted Sarandos said during a conference call with Wall Street analysts. "The combination of Netflix and Warner Bros. creates a better Netflix for the long term. It sets us up for success for decades to come."

Netflix's cash and stock transaction is valued at about $27.75 per Warner Bros. Discovery share. Netflix also agreed to take on more than $10 billion in Warner Bros. debt, pushing the deal's enterprise value to $82.7 billion.

Netflix shares closed at $100.24 Friday.

Buying a studio that dates back 102 years to the silent picture era represents a major strategic shift for the Los Gatos, Calif., firm.

Netflix sputtered to life in 1997 by buying movie DVDs and mailing them in red envelopes to customers.

[See Netflix, A12]

While Netflix has delivered some successful TV franchises along the way — including “Stranger Things,” “Squid Games,” “Bridgerton” and “KPop Demon Hunters” — the streamer does not have a deep library.

And that’s what this deal represents.“This move is all about adding serious firepower to Netflix’s content game,” said Julie Clark, senior vice president of media and entertainment at information firm TransUnion.

“HBO brings a treasure trove of IP, proven franchises and world-class storytelling,” she said. “That’s huge for Netflix.”