Netflix is close to winning Warner Bros. Discovery.
Warner Bros. Discovery, the old-line entertainment company that controls the Harry Potter and Batman franchises, has entered exclusive talks with Netflix for a deal to sell its movie and television studios and HBO Max streaming service, according to two people familiar with the negotiations who were not authorized to talk publicly. The culmination of a deal would send shock waves through Hollywood and the broader media landscape.
The move to exclusive talks with Netflix came after a bidding war that pitted Netflix, Comcast and Paramount against each other. The three companies submitted sweetened bids this week. Netflix offered mostly cash.
Comcast has also been bidding for Warner Bros. Discovery’s studios and HBO Max streaming service. David Ellison, the Paramount chief executive armed with billions from his father, has been trying to buy all of Warner Bros. Discovery, including traditional television channels like CNN and TNT.
The pitch from Netflix, the streaming juggernaut with more than 300 million subscribers, was notable in part because it included a pledge to continue theatrical releases for movies from Warner Bros. Discovery, one of the people with knowledge of the talks said. That would be a significant development for Netflix, which pioneered at-home viewing and has so far avoided going all in at the box office.
Although it has grown into the largest paid streaming service, Netflix has never attempted an acquisition even remotely close to this size. Bloomberg earlier reported that Netflix and Warner Bros. Discovery had agreed to exclusive talks.
Any deal would need approval from federal regulators. How the Trump administration evaluates antitrust concerns in any of the proposed deals will depend in part on how it defines the key participants in a media industry that is rapidly evolving as technology giants like Apple and Amazon become rivals to legacy players.
Politics have also seeped into some deal approvals during the Trump administration. Mr. Ellison has cultivated a relationship with President Trump, who has praised his family’s ownership of Paramount. Brian Roberts, the chief executive of Comcast, has found himself at odds with Mr. Trump, with the president calling him a disgrace to broadcasting.
On Thursday, a group of anonymous feature film producers sent a letter to Congress with “grave concerns” about Netflix buying Warner Bros. Discovery. “Netflix views any time spent watching a movie in a theater as time not spent on their platform,” the letter said. “They have no incentive to support theatrical exhibition, and they have every incentive to kill it.”
The letter also voiced worry about “monopolistic control” of the streaming market. The producers said they didn’t sign their names to the letter out of “fear of retaliation.”
Nicole Sperling contributed reporting.
Brooks Barnes covers all things Hollywood. He joined The Times in 2007 and previously worked at The Wall Street Journal.
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