Economy

Netflix Announces Deal to Acquire Warner Bros. Studio, Prompting Theater Industry Concern

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Dec 5, 2025

THE BARE STORY

Netflix announced on Friday an agreement to purchase Warner Bros. Discovery's film studio and streaming service for a reported $82.7 billion. The deal follows what was described as a competitive bidding process.

The acquisition has raised concerns among movie theater operators about the future of theatrical distribution. The global exhibition trade association Cinema United described the deal as an "unprecedented threat," with its CEO Michael O'Leary stating that Netflix's business model is contrary to theatrical exhibition. O'Leary confirmed the group has engaged with regulatory bodies to review the acquisition. A group of industry players also reportedly sent a letter to Congress, warning that the merger could give Netflix excessive market control.

In response to the concerns, Netflix co-CEO Ted Sarandos stated that planned Warner Bros. films will continue to be released in theaters. A person familiar with the matter said Sarandos intends to meet with theater owners to discuss his preference for shorter exclusive theatrical windows. Sarandos also said he believes long exclusive windows are not consumer-friendly and that Netflix's primary goal is providing first-run movies to its members.

Theater operators' fears include the possibility of fewer films being released theatrically and shorter exclusive screening periods, which they say would harm box office revenues. The industry is noted to be in a period of recovery following pandemic-related shutdowns and labor strikes. An analyst at Wedbush, Alicia Reese, noted that Warner Bros. Discovery's existing theatrical contracts extend through 2029 and must be honored.

Same Facts. Different Perspectives.

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Perspective by Grok

• The deal poses a fundamental threat to the industry. The global exhibition trade association Cinema United described the acquisition as an "unprecedented threat." Its CEO, Michael O'Leary, argued that Netflix's business model is inherently contrary to the business of theatrical exhibition, which relies on exclusive screening periods.

• The merger could harm an industry in recovery. Theater operators are concerned the deal will result in fewer films being released theatrically and shorter exclusive screening windows. They say this would damage box office revenues during a vulnerable period, as the industry is still recovering from pandemic shutdowns and labor strikes.

• Critics say the acquisition could lead to excessive market control. Industry groups have reportedly engaged with regulatory bodies to review the acquisition. Additionally, a letter was reportedly sent to Congress by industry players warning that the merger could give Netflix an excessive level of control over the market.

How it may affect me

As a U.S. reader:

• New Warner Bros. movies may become available to stream on Netflix sooner, as the company intends to shorten exclusive theatrical release windows.

• The financial health of local movie theaters could be impacted, as the industry worries shorter theatrical runs will harm box office revenue during its recovery period.

• The merger faces regulatory review due to concerns about excessive market control, which could affect future competition and consumer choice in the entertainment industry.

• Any immediate changes to film releases are unlikely, as the article notes existing Warner Bros. theatrical contracts extending through 2029 must be honored.

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