Netflix Will Own HBO Max If Warner Bros. Discovery Deal Goes Through

Warner Bros. Discovery Inc. and Netflix are in exclusive sale negotiations, people familiar with the matter informed Bloomberg. Warner Bros. put itself up for sale in October, after receiving offers from several parties. Reports at the time claimed Apple TV was interested in acquiring Warner Bros., a move that would significantly boost the appeal of Apple TV. Paramount and Comcast are two other interested parties in Warner Bros.' content. However, if the information is accurate, Warner Bros. will entertain only Netflix's bid for the foreseeable future. It's unclear how much Netflix is ready to pay for Warner's film and TV studios, and the HBO Max streaming service.

Bloomberg notes that Netflix is offering a $5 billion breakup fee in case regulators reject a proposed deal. That agreement may be announced in the coming days, assuming the two parties reach a consensus. Warner Bros. is valued at more than $60 billion, the report notes. A Warner Bros. purchase isn't guaranteed for Netflix, as antitrust regulators in the U.S. and Europe will have to approve it. The deal is already facing opposition in the U.S. Rep. Darrell Issa (R-CA) reportedly sent a letter to U.S. regulators last month arguing that a sale to Netflix could hurt consumers.

Netflix is one of the top streaming services in the world, outperforming rivals including Warner's HBO Max. Over the years, the company licensed content from others while also building its own library of originals. Home to plenty of beloved TV shows, HBO has gone through a few tumultuous years, which saw Warner rebrand it as HBO Max before changing its mind and bringing back the HBO moniker. In case the Netflix-Warner deal is approved, Netflix would own the HBO Max streaming service and the original content Warner Bros. developed for it. Netflix could run HBO Max as a standalone service or merge it with its own streaming app. It could also follow Disney's model, which runs both Disney+ and Hulu combined. The two streaming apps are also available separately, with Disney offering the subscription as a bundle.

In addition to HBO Max and the HBO originals, Netflix would also own other Warner Bros. brands and properties once the deal goes through. The list includes DC Comics, the universe of movies featuring Batman, Superman, and other beloved superheroes. This would give Netflix a way to compete against Disney's Marvel movies. Netflix would also own the Harry Potter franchise and beloved TV series like Friends and Game of Thrones. Warner Bros. Pictures and Discovery content would also come under Netflix's umbrella. Warner Bros. would have to spin off various properties before closing a deal, including cable channels CNN, TBS, and TNT.