Streamer That Started by Mailing Discs to Own Studio That Made the Discs
The FTC is expected to voice concerns before approving the merger anyway.
Employees Assured Nothing Will Change
HOLLYWOOD — Netflix, the company founded in 1997 as a DVD-by-mail rental service, said Friday it will acquire Warner Bros., the 102-year-old studio responsible for much of what people were renting in those red envelopes.
The US$82.7 billion deal unites a company that once charged late fees on borrowed discs with the studio that manufactured what was on them, completing a three-decade journey from distribution middleman to owner of the means of production.
"Our mission has always been to entertain the world," said Netflix co-CEO Ted Sarandos, standing before an intellectual property portfolio that now includes Batman, Superman, Harry Potter, Bugs Bunny, Casablanca, The Sopranos and whatever else Warner Bros. has produced since before anyone involved in the deal was born. "By combining Warner Bros.' incredible library with our culture-defining titles, we'll be able to do that even better."
The acquisition includes HBO, the network that spent decades proving prestige television required patience and which now belongs to a streamer that cancels shows after two seasons if completion rates dip below a threshold. The Wire, a program that found its audience over five years of critical evangelism, will now be evaluated using the same 28-day performance metrics applied to Is It Cake?
Sarandos acknowledged that buying the biggest studio in Hollywood represented a departure from Netflix's stated philosophy. "Over the years, we have been known to be builders, not buyers," he told analysts, announcing the largest purchase in entertainment history.
Cinema United, the exhibition industry's trade group, called the deal "an unprecedented threat to the global exhibition business." Netflix assured stakeholders it would "maintain Warner Bros.' current operations, including theatrical releases for films," a commitment that appears nowhere in the binding agreement.
The deal is expected to close in late 2026, following a regulatory review during which the Federal Trade Commission will voice significant concerns before approving the merger anyway. Warner Bros. Discovery's cable networks, including CNN and TNT, will be spun off into a separate company called Discovery Global, having been successfully avoided by every bidder.
Warner Bros. employees learned of their new ownership through the same press coverage as everyone else. Six hours later, the studio's human resources department invited them to an "exciting transition town hall" Monday at 9:00, sources said.
The email assured them that nothing would change. ■
