How Will Netflix Buying Warner Bros Impact Disney+?

In the past month, three different companies, Comcast, Netflix and Paramount, have been placing bids to purchase all or part of Warner Bros Discovery.

Today, Netflix announced that it has agreed to acquire Warner Bros., including its film and television studios, HBO Max, and HBO.  This deal is valued at $27.75 per WBD share, with a total enterprise value of approximately $82.7 billion (equity value of $72.0 billion).

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.   This new company will include all of the linear channels, such as CNN, and the streaming platform, Discovery+.

Greg Peters, co-CEO of Netflix, said in a statement regarding the new deal:

“This acquisition will improve our offering and accelerate our business for decades to come.  Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities. With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”

David Zaslav, President and CEO of Warner Bros. Discovery, added:

“Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most.  For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

There are lots of questions about this new major deal, especially with regard to the future of Warner Bros theatrical films, since Netflix has generally been opposed to doing longer theatrical releases, plus there are also questions about the future of the streaming service, HBO Max, which could eventually be merged into Netflix.  

Currently, Disney has a deal with Warner Bros Discovery to offer a bundle in the United States, offering Disney+, Hulu and HBO Max at a discounted rate.   So, should Netflix decide to eventually close down HBO Max, moving all of its content into Netflix, this bundle’s future is now in question. 

Regardless of Netflix purchasing Warner Bros., the bundle’s future was unlikely. If Comcast had won the bid, HBO Max would likely have merged into Peacock, and if Paramount had won, the same would have happened with Paramount+.

Much like with Disney’s purchase of 20th Century Fox, it might take over a year before Netflix completes its purchase of Warner Bros, as it will also have to go through some regulatory approval, which might be tricky with the current government, though, should it fail to get approval, Netflix will have to pay Warner Bros, $5 billion anyway. 

There is another layer to this situation that could eventually impact Disney programming, as Warner Bros. Television creates the following shows for Disney+/Hulu and its linear channels.

• Abbott Elementary
• The Bachelor
• The Bachelorette
• Bachelor In Paradise
• Afterlife with Archie

Over the past few years, Warner Bros has also made a number of original shows for Disney+, including:

• Growing Up Animal
• Save Our Squad with David Beckham
• The Right Stuff

Warner Bros TV also makes shows for other streaming services, such as “Shrinking” and “Bad Monkey” for Apple TV.  This isn’t uncommon among the traditional studios, as Disney also continues to make shows for other networks, such as “Nobody Wanted This” for Netflix or “Imperfect Women” for Apple TV.  Paramount and Universal also make shows for other platforms.

While it’s unlikely to impact any show in the short term, once Netflix does have full ownership of Warner Bros, will it want to divert all of the studio’s attention and funding onto projects it can utilise, or will it be happy to still produce shows for other networks/platforms?

Other potential problems for Disney+ with this merger between Warner Bros and Netflix, is that it will also likely result in many films and shows no longer being available to license, such as “The Amazing World of Gumball” or classic films/shows, such as “Fresh Prince Of Bel Air”, “Gremlins” and “Full House”. which are currently available to stream on Hulu.

But perhaps the biggest issue for Disney, is that the merger of Netflix with Warner Bros, means Disney will need to be even more competitive than ever, it will need to offer more content, at a higher quality than ever before, which is going to be good for Disney+ subscribers.  More competition usually results in better products for the audience. 

Ultimately, it’s all a waiting game, and we are just going to have to see what happens next.  But this is another massive shift in the entertainment world, and it’ll be years until we see the fallout. 

If I was a Disney executive, I’d certainly be looking at any project involving Warner Bros much more cautiously and looking to make changes now, such as investing more in giving access to Disney/20th Century’s archive of films and shows, as Netflix will likely be much more willing to use Warner Bros back catalogue as a direct competitor to Disney, Paramount and Comcst.  While also cutting back on cross-promotional projects and focus on their own bundle of Disney+ and ESPN Unlimited.   Plus, Disney has time now to continue to invest in its own original content to compete with a combined Netflix/HBO/WB in a few years’ time.

What do you think of Netflix buying Warner Bros?  Let me know on social media!