Netflix announced the blockbuster deal with Warner Bros. Discovery on Friday morning. It has agreed to buy the legendary TV and movie studio and assets like the HBO Max streaming service for $72 billion.
Netflix announced the blockbuster deal with Warner Bros. Discovery on Friday morning. It has agreed to buy the legendary TV and movie studio and assets like the HBO Max streaming service for $72 billion.
Netflix has a market cap (valuation) of $421 billion, warner discovery is $64 billion now, but it was only ~$30 billion a couple months ago before rumours of a buyout started happening.
They both have the same revenue of $39 billion but Netflix runs at a $10 billion profit while warner runs at a $10 billion loss. That’s why they’re able to buy it, with warner the business is bad and they’re burning money and need cash to keep them going but they’re sitting on a gold mine of IP that would be valuable to another studio that’s willing to cover their losses until they can turn things around.
It’s more profitable to make low budget reality tv slop then risky high budget stuff that may not find an audience.