Warner Bros. Is Said to Begin Exclusive Talks With Netflix

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00:00Bloomberg understands that Warner Brothers Discovery has entered exclusive negotiations

00:03to sell its film and TV studios and HBO Max streaming service to Netflix.

00:09For more on this Bloomberg scoop, let's bring in our deals reporter Manuel Baigori.

00:13Manuel, how significant then would this be?

00:18Tom, significant indeed, because it's going to send shockwaves in the industry.

00:25It's a transformative deal for the entertainment industry,

00:29not only in the U.S., but globally, given how powerful these franchises are.

00:34It would be definitely the biggest ever deal by Netflix.

00:39They've never done a deal of this magnitude.

00:42And it will also be very, very consequential for competitors,

00:50take Paramount, Walt Disney, and others that are also growing in this field.

00:55So surprising also, Tom, to see a potential $5 billion breakup fee.

01:02That is quite remarkable and perhaps one of the reasons why Netflix seems to be,

01:08according to our sources, pulling ahead of the game here.

01:11Yeah, that is a chunky, that's a chunky breakup fee, as you say, $5 billion U.S.

01:17Manuel, you are the deals expert.

01:18So what are you and the team watching for in terms of how this story evolves?

01:22This all could happen quite quickly, is my understanding.

01:25Yes, Tom, it's moving really fast.

01:28We understand that a potential agreement could be just as close as just a few days.

01:34We might see something announcing over the coming days.

01:38But with any auction, we need to keep our ears close to the ground

01:43because things can move quickly in different directions.

01:47I mean, the fact that they have potentially signed exclusivity that should grant Netflix

01:52with, you know, enough legroom to potentially get, you know, the terms signed.

02:01But you never know.

02:03Companies can move aggressively if they feel that they are losing out to a competitor.

02:08So I think the next few days are critical,

02:12although everything seems to suggest that is Netflix really the one to win on this auction.

02:20But let's keep, you know, our ears pretty close

02:25because things can unfold in every direction.