The $72 Billion Netflix Deal Now Needs the Trump Administration’s Blessing
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How did Netflix win the $72 billion bid for Warner Bros. and what did the companies announce first?
Netflix is buying Warner Brothers for $72 billion in a huge Hollywood deal, but is a huge fight next. Plus, a CDC panel remade by RFK Jr. votes to drop longtime hepatitis B recommendations for newborns.
Kennedy pushed out all the previous members who were longtime public health and infectious disease experts. So you had people who were presenting on the hepatitis B vaccine who are longtime anti-vaccine activists.
And Western buyers line up for Israel's latest military technology. It's Friday, December 5th. I'm Pierre Bien-Aimé for The Wall Street Journal, filling in for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that moved the world today. First up, we have an update on that Netflix deal we mentioned on this morning's show. The streaming giant has agreed to buy Warner Bros. Discovery Studios and HBO Max streaming service for $72 billion, beating out Paramount and Comcast. On an investor call this morning, Netflix's co-chief executive Ted Sarandos acknowledged that some were surprised by the deal, the company's largest acquisition ever.
This is a rare opportunity. And it's going to help us achieve our mission to entertain the world and to bring people together through great stories.
Wall Street Journal entertainment reporter Joe Flint says the deal would change Netflix across the board and could shake up the theater industry.
Going forward, when Netflix is really calling the shots there, how committed will they be to the traditional theatrical release? We know the company doesn't love it. So certainly it is safe to say that if Netflix does continue with a theatrical model for Warner Brothers, they are going to really try to shorten those windows between how long a movie is in the theaters and when it can be elsewhere.
And after the dramatic auction process for Warner, there may still be more drama to come. People familiar with the matter say Paramount, which also made a bid, is now weighing its next move. And Joe Flint says antitrust scrutiny is going to be significant. A senior Trump administration official said today that the president's advisers are concerned about the Netflix deal. And Netflix has agreed to pay Warner what's called a breakup fee of $5.8 billion if the deal falls through because the companies don't get the approvals they need.
To hear Netflix and Warner talk about it, this deal is going to sail right through. But to talk to Paramount, which of course lost out, and to various antitrust lawyers and even a few former regulators I've chatted with, this deal is going to face a lot of Challenges. The real question for Netflix will be how the Department of Justice views the streaming landscape and competition. Netflix would tell you they compete with everyone. YouTube, Facebook, Instagram, Fortnite, sleep. Anything that can keep you away from a Netflix screen is a competitor to them. But DOJ experts don't see it as broadly as that. That's where Netflix could face some challenges because combined with HBO, they would have over 30% of the subscription streaming marketplace in the U.S.
And that's kind of a trigger point when you hit that 30% mark that borders into prove you're not doing something wrong material. We're seeing people on both sides of the aisle politically weigh in against this deal. Elizabeth Warren this morning put out a statement. There's been statements from some Republican senators as well. So it's going to be a fight.
That was WSJ reporter Joe Flint. We exclusively report that Elon Musk's SpaceX is kicking off a secondary stock sale that would value the rocket maker at $800 billion, surpassing OpenAI to make it the most valuable U.S. private company, ahead of a potential IPO next year. That's according to people familiar with the matter. There's no guarantee SpaceX will reach the $800 billion value it's aiming for. The secondary share sale allows employees and investors to cash out their existing shares in a company that is nearly 25 years old and hasn't yet gone public. People familiar with the matter say SpaceX executives are weighing a potential initial public offering in 2026.
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Chapters
3 chapters
1
How did Netflix win the $72 billion bid for Warner Bros. and what did the companies announce first?
0:04–6:04
2
What questions did Netflix executives raise about theatrical releases after the Warner deal?
6:04–12:11
3
Why could the Netflix–Warner acquisition face antitrust scrutiny from the Trump administration and DOJ?
12:11–12:48
Speakers
4 identifiedMore from WSJ What’s News
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