Netflix to Buy Warner Bros. in Deal Worth $72 Billion

Watch Netflix to Buy Warner Bros. in Deal Worth $72 Billion - Bloomberg on Dailymotion

Transcript

00:00Let's turn back to that breaking news from earlier this hour. Netflix planning to acquire

00:04Warner Brothers Discovery in a massive cash and stock deal valued at nearly $83 billion,

00:10representing $27.75 per share. Joining us now for more is Geetha Ranganathan of Bloomberg

00:16Intelligence. Geetha, how surprised are you that this deal was announced so suddenly after so much

00:22drama over the past few months? Yeah, actually very, very surprised, Lisa. We never saw Netflix

00:29really as a frontrunner. I mean, when we first heard the news about Netflix kind of kicking the

00:32tires, we just thought it was more of like an exercise, just kind of looking at all of the

00:37assets. So this really comes as a surprise to us because we never, I don't think anybody on the

00:42street or in the market actually thought that this was an existential deal for Netflix. It very much

00:48is the case for Paramount, Skydance and Comcast. I mean, now those are two subscale streaming

00:53platforms. I think the street was very much looking at that as a must have. You know,

00:58Warner Brothers for Netflix, not so much. So definitely a huge surprise.

01:02So why did Warner Brothers in the end go with Netflix?

01:06So I think there are a couple of different things here. I think one is just the price

01:09is something that they were looking for. I don't think Paramount was willing to pay

01:13more than about $26 for the entire company. Remember, Warner Brothers here is selling two

01:19different parts of the company. So there is the global networks business, which is, you know,

01:23TV networks, CNN and all of that. And then you have the streaming and the studio business,

01:28which is, of course, the far more valuable part of the business. And Netflix, of course,

01:32really kind of paying up almost $28 a share. So we know that David Zaslav, the CEO of Warner,

01:39was looking for something close to about $30 per share for the entire company. Remember,

01:44this is a stock that was trading at $12 just a few months ago. So there's been a huge,

01:49huge run up. And I think that this probably was the best deal for shareholders. And that's what

01:54Zaslav said he was going to do.

01:56Gita, do you think that this is going to be the best deal for regulators? Do you think

01:58they're going to sign off?

02:00Yeah, it's going. This is really a huge regulatory gamble, Lisa. I mean, you kind of look at Netflix,

02:06they already are the dominant streaming platform of 320 million subscribers globally. That's the

02:12number one streaming service. HBO Max, also pretty massive, with close to about 130 million. So

02:18you combine the number one, number three streaming services across the world, huge regulatory red

02:24flags. So it's going to be tough. There is a $5 billion breakup fee that kind of reflects that

02:29uncertainty. We'll have to see what are the concessions that Netflix is willing to give up.