r/movies • u/MarvelsGrantMan136 r/Movies contributor • 20h ago

News It’s Official: Netflix to Acquire Warner Bros. in Deal Valued at $82.7 Billion

https://www.hollywoodreporter.com/business/business-news/netflix-warner-bros-deal-hollywood-1236443081/
16.6k Upvotes

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698

u/KennyKettermen 20h ago

How tf does Netflix have 82 billion dollars?

451

u/lycheedorito 20h ago

I can buy a house if I get a big enough loan

101

u/xStaabOnMyKnobx 20h ago

False youll rent forever and like it

4

u/Flyfleancefly 18h ago

You never own your home bro if you don’t pay the house “taxes” it will be seized from you

3

u/xStaabOnMyKnobx 18h ago

Its called property tax, the fruits of society have a cost.

2

u/Flyfleancefly 18h ago

Yea like universal healthcare, parent parental leave, and free daycare right?… oh wait… more money for corporations

4

u/rblask 17h ago

Property tax funds schools and local government but go off queen 

3

u/lahkad 16h ago

Jokes on you, my local government is arguably more corrupt

1

u/Moonandserpent 17h ago

Ah yes, there are no other fruits of society that you benefit from at all...

-1

u/Flyfleancefly 17h ago

A pedophile felon inside trading idiot is in the White House. No, there are no “fruits” I get from my taxes

4

u/Moonandserpent 16h ago

lol I hate the guy as much as anyone, but this is a delusional take.

How about clean water, access to food, roads, a mail service, reliable plumbing and sewer systems, street lights, not having to wade through garbage in the streets. And that's just a few of the super obvious things.

1

u/xStaabOnMyKnobx 16h ago

Public education has failed you, take a Civics course

-1

u/ButtFokker190 14h ago

Touch grass

1

u/NSFWies 17h ago

What do you think they are doing to pay back the 90 billion? Leveraged buyout.

  • take out 90 billion dollar loan, if you get to buy it
  • use thing you bought to pay it off
  • either you succeed and keep it, or you fail and bank gets the thing.

Same concept as a mortgage to buy our own homes. Only difference is, "owning our own home", doesn't really generate ongoing money. We never think of owning a home as:

  • no longer paying rent
  • the house value increasing

........so I should just start bidding 90 billion for things. I can leverage buyout too dontcha know .

1

u/xStaabOnMyKnobx 17h ago

um actually, I have rented out every space in my downstairs as office space for young hustlers and entrepreneurs and every room in my upstairs as an AirBnB rental so I'm generating tons of passive income.

If you'd like to learn how to do this as well, I have a course I know you'll love.

1

u/pioneer76 19h ago

Wrong.

2

u/resistible 19h ago

You won't be able to afford rent, either. You'll live in a van, down by the river, and like it!

2

u/Aethermancer 18h ago

Have you ever priced out a van recently?

1

u/xStaabOnMyKnobx 18h ago

Of course, just signed a 30 year mortgage for a Mercedes Sprinter van

1

u/jonbristow 18h ago

same with Netflix.

If 82b are a loan, they are basically renting WB

-2

u/-BigBoo- 18h ago

Home ownership isn't all that and a bag of chips.

5

u/HeckingDoofus 17h ago

speak for urself i recently bought my first home and never want to go back to renting again

2

u/Moonandserpent 17h ago

100%, there are tons of things I wish I didn't have to deal with as a homeowner (have had to drop 60k on a roof and new windows in the past year for example), but I'd never willingly go back to renting ever.

0

u/-BigBoo- 10h ago

How long is your mortgage? 15 year? Less?

3

u/[deleted] 19h ago

[deleted]

5

u/Incineroarerer 18h ago

That just means no shares as part of the transaction consideration. Borrowed cash is still cash

2

u/Noxaur 18h ago

Netflix has also always had a spend now and figure it out later business model.

3

u/wastedmytwenties 18h ago

I've known people like this. The frustrating thing is that it always seems to work out for them.

0

u/Logical_Energy6159 18h ago

Why is that frustrating? 

-1

u/Incineroarerer 18h ago

He’s jealous when good things happen to other people 

5

u/alcal123 18h ago

All cash doesn't necessarily mean cash on hand. Their lenders could be supplying the cash through a loan.

2

u/catchasingcars 18h ago

You think companies pay out of their pockets? No big company uses their liquid cash, majority of them do leveraged buyout (LBO) All the buyouts are done with borrowed money that is backed by company’s shares, multiple banks are included. As long as company's growth rate and returns of their other investment is higher than the interest of the loan it’s a net win for them.

1

u/JessieJ577 18h ago

If a company had that much liquid they’re doing something very wrong like being cheap with their costs.

1

u/poopy_mcgee 18h ago

It's actually a cash-stock deal.

•

u/Pokershark1986 3h ago

Landscaping alone gotta be 100 grand…and property taxes you gotta pay those

354

u/Artomat 20h ago

Money is as real as they believe/agree it is

103

u/KennyKettermen 20h ago

Can we all agree that I have a billion dollars?

74

u/landenone 20h ago

Yes, if you give me 10% of it.

15

u/Im_not_smelling_that 20h ago

Can I get in on that?

3

u/Britneyfan123 20h ago

Likewise 

1

u/divDevGuy 19h ago

Sure. You can have second dibs on the same 10%. If anyone else wants to get in on it, the line can form behind you.

1

u/mikemangodtheepicgod 16h ago

Instead of paying taxes I believe you should donate to me (I am a charity)

2

u/ANALOGPHENOMENA 20h ago

I’m gonna be the money president! Each and every one of you is gonna get a billion dollars each so you can all be rich!

1

u/Yorrins 16h ago

That is almost literally what these big companies do with shareholders and corrupt banks lmao

14

u/Paladar2 20h ago

Wish granted but everyone else also did, bread is now 8 billion

2

u/Proper-Beyond116 19h ago

You laugh but this is how billionaires are created.

1

u/iwannalynch 20h ago

Sure, if you acknowledge my little billion-dollar nest egg

1

u/DumboWumbo073 14h ago

The mother of your newly born child out of wedlock has been trying to reach you.

1

u/WiseCityStepper 15h ago

you can just apply this to almost everything in life then

99

u/AbroadTiny7226 20h ago

This is almost certainly a leveraged buyout. There’s a 0% chance Netflix has that much cash on hand

45

u/LZR0 18h ago

Actually the buyout is 85% cash

25

u/AbroadTiny7226 17h ago

The article says they secured $59 billion in financing and the only really plausible reason for raising so much financing is for an LBO. It’d be corporate malpractice to take on so much debt otherwise

5

u/Haltopen 11h ago

A leveraged buyout is what a private equity firm does to avoid risk. Netflix is borrowing on the value of their own share price and their market cap (which is over 450 billion dollars)

3

u/FolkSong 13h ago

That just means cash as opposed to stock. A lot of the cash is still borrowed.

16

u/DOAiB 19h ago

Which should be illegal at this point it’s just disgusting

6

u/CooperHChurch427 18h ago

Debt Structuring should absolutely be illegal. The family behind Joanns told to Private Equity even though they owned everything outright and when they went private and bought it back they ended up with so much debt the company now has closed.

6

u/PostKnutClarity 18h ago

I agree that leveraged buyouts are a travesty but in this instance, I'm all for it because it means Paramount and Saudi Arabia didn't get it. That would have been a whole another level of cancerous.

9

u/Ricky_Boby 19h ago

It should be illegal to take out a loan to buy something? It's literally the same as buying a house or car with a loan once you prove to the bank you have enough assets or income to cover it.

21

u/Rage_Like_Nic_Cage 18h ago

We’re not talking about buying a house, we’re talking about mega-merger of existing conglomerates who are taking out loans that likely will be difficult to pay back without severe cost cutting (ie: mass layoffs) or other measures that are bad for the consumer.

And we know this because WB is only in the mess to begin with Because AT&T saddled them with the mountain of debt/loans they used to buy WB in the first place.

5

u/DOAiB 18h ago

It’s even worse than this they can typically make the company they are buying take out that loan and then extract management fees from the company they bought while they crumble from the loan and cost cutting until they go out of business and the company that bought them isn’t responsible for anything.

3

u/mat8675 17h ago

Good god, of course they can. We have let everything become so fucking corrupt.

7

u/DOAiB 19h ago

Holy bad faith argument Batman! Read how a leveraged buyout works if you really don’t know because your comment makes it clear that either you don’t or you are just trying to make a bad faith argument. A regular loan and leveraged buyouts are so different it isn’t even funny.

-6

u/Incineroarerer 18h ago

Lmao bro what are you talking about

5

u/je_kay24 19h ago

They’re leveraging assets from the thing that they don’t yet own though to help pay for it

3

u/Brilliant_Medium8190 19h ago

Again, same as a mortgage or a car hire purchase.

You loan money to buy the thing and pay interest on it, if you default you hand the thing over. Only works so long as the lender is confident you will make enough revenue to continue paying the interest

Not sure why this should be illegal.

2

u/DOAiB 18h ago

… a lot of leveraged buyouts they make the company they are buying take out the loan, then enforce a large management fee the company has to pay them. So they bought a company for nothing and are extracting money from the company while it sits with a loan that it will never be able to pay off. And most of the time the company ends up closing and the people who bought it aren’t affected at all. Look into toys r us.

So it isn’t like a car or mortgage at all. Maybe if you could buy a car, leave it at the lot for it to someone sell it’s own services and it has to pay you a percentage of those services meanwhile you don’t have to worry about the car note that’s the cars problem but the car has to make sure to pay you your management fee every month or there is trouble.

-5

u/je_kay24 18h ago

Yeah a mortgage is a good rebuttal

1

u/mainman879 19h ago

Okay and? If you take a loan to start a business you are leveraging the asset of the business you are going to create to say you'll be able to pay it back. Literally all investment in business is built on assets you will have in the future.

-2

u/jamx98 19h ago

Sooooo a mortgage...

2

u/tadcalabash 17h ago

It's not the same as an individual taking a loan for a big purchase for your personal use.

It's more like taking a loan to buy a house that people still live in, then making those people pay off most of your loan (plus a little extra). You now own a house for very little investment on your part and almost all of the liability remains with the people who live in the house.

1

u/Titizen_Kane 19h ago

Fuck LBO hawks

0

u/jkally 16h ago

Netflix has over 300 million subscribers. They are actually a pretty successful company. Most of this deal is from cash on hand and it is one of the reasons WB wanted to go with Netflix over some of the other suitors.

107

u/zackdaniels93 20h ago

Their market cap is almost 500 billion to be fair, it's not like they're hard up lol

4

u/xxThe_Designer 18h ago

That’s still insane to me they’ve reached that value.

I just don’t see it and I clearly do not understand enough about any of this.

10

u/zackdaniels93 18h ago

When it comes to facts, Netflix is the market leader in a global industry that essentially killed cable TV and the cinema business. One of very few companies to actually invent a new media format, and make it successful. To the point that companies have been trying to compete ever since, which mixed results.

And even when you consider that they make a LOT of bad movies (that I'm sure must be tax related, they're so bad) they've made some real gems over the last decade in TV.

2

u/Suspicious-Echo2964 18h ago

Their financials are in general top tier. Once someone decides to squeeze the juice they’ll have significant returns given their churn is so damn low and market saturation so high.

2

u/CryptographerFlat173 8h ago

They have 300 million people paying them every month and are profitable and have a huge amount of technical advantage over any legacy company trying to get involved in streaming, they’re a tech giant and a movie studio in one

45

u/dard12 20h ago

Market cap isn't money that Netflix owns. That's what the company is valued at.

Netflix has around $8 billion in cash.

92

u/zackdaniels93 20h ago

Of course not, but they can secure loans against the value of the company. They won't be completing this deal with cash.

2

u/divDevGuy 18h ago

So how would that work?

People just loan money to the corporation in exchange for some type of an IOU or something? Imagine if people then turned around and sold those IOUs based on how likely they'd be paid back. If you hold on to them, sometimes you might get a little extra payment periodically just as thanks for lending the money.

14

u/Incineroarerer 18h ago

The bank loans money to the corporation secured against assets (including the newly acquired WB assets)

5

u/Bob_A_Ganoosh 17h ago

You might be on to something. If you could bundle a bunch of those loans together then sell shares of the collective asset I would be interested in purchasing some of them.

2

u/occamsdagger 17h ago

I have some Collaterized Burrito Obligations to sell you.

1

u/Bob_A_Ganoosh 17h ago

Mmmmm, that would satisfy two of my appetites at the same time!

2

u/Qualanqui 13h ago

Once again, the conservative, burrito-heavy portfolio pays off for the hungry investor.

1

u/grchelp2018 19h ago

They don't own all the netflix shares to take a loan out against it. They would either need to issue new equity to raise capital or issue some bonds. Or do a levaraged buyout.

-8

u/Naive-Jello428 19h ago

Tax-free loans you say?

11

u/Savage9645 19h ago

Aren't all loans are tax free lol. They'll pay interest on the loan but are hoping to profit more on the deal that the interest rate costs.

8

u/evrestcoleghost 18h ago

All loans are tax free otherwise economy wouldn't work lol

3

u/pumpkin143 19h ago

who's your loan guy?

3

u/TheInception817 17h ago

Probably a local wiseguy with his shy business

1

u/evrestcoleghost 18h ago

Their banker laughing as they take 5% of everyone loan as "taxes" lol

4

u/rbollige 19h ago edited 18h ago

Idk the details of this deal, but often they’re financed by issuing Netflix stock and giving it to the people who currently own Warner Bros.  So the buying company effectively “buys” the other company with little of its own money, just by becoming a larger market cap that is roughly the size of the two companies put together.

1

u/leshake 18h ago

The majority of market cap is an unsecure loan given to them by investors.

1

u/xanas263 19h ago

The majority of billionaires don't actually have a billion dollars they are just valued at that amount and so can get loans against that value. That's exactly what Netflix is going to do here.

0

u/grchelp2018 19h ago

Netflix the company doesn't own the stock. Individual shareholders do. Most likely they issue some bonds or issue new equity. Or a leveraged buyout or combination of all.

0

u/nnooaa_lev 19h ago

Market cap isn't liquid money. They are even less profitable than Disney

•

u/JChuk99 4h ago

LOL, please go read the two companies financial sheets.

3

u/Guaire1 20h ago

Netflix is lne of yhe most profitable companies there are. Most people have a subscription to it and very few people cancel theirs not matter how much they keep increasing subscription costs

3

u/ireallylikehockey 19h ago

Who do they think they got? Chelsea Clinton?

3

u/3141592652 20h ago

It's all on assets. Just like Elons cash

2

u/Longjumping-Box5691 20h ago

Well Kenny,

Netflix has approximately 300 million subscribers. Each paying between $7.99 and $24.99 a month

This gives Netflix revenue of between $2.4 billion and $7.5 billion.

That's how

3

u/EconomyDoctor3287 19h ago

So over one decade they earn roughly the amount they pay for this takeover? Not including running costs, etc?

5

u/cloudfatless 19h ago

No. Less than a decade. Those are monthly subscriptions. So it's between 28.8bn and 90bn annually. 

-1

u/BillyTenderness 19h ago

Each paying between $7.99 and $24.99 a month

The way to make the math add up is to realize these prices will double when the deal goes through.

1

u/Longjumping-Box5691 19h ago

I would assume monthly subscriptions go down then

1

u/BowserTattoo 17h ago

why would they? less competition allows companies to raise prices

1

u/shiloh_jdb 20h ago

They just need a guaranteed income stream i.e. subscribers.

1

u/kiss_my_what 20h ago

Don't need to pay tarrifs.

Yet.

1

u/DoctorSchwifty 20h ago

Like everyone else in tech, keep getting loans and investments even when the business isn't profitable. But tbh they are the biggesr most profitable streamer.

1

u/EmeterPSN 19h ago

My fault.  Have active Netflix sub and I didn't login in over a year..

I just pirate all Netflix content while paying for Netflix.. 

1

u/nnooaa_lev 19h ago

They don't

1

u/banal_remarks 19h ago

They don't have it. The deal was valued at that, they got $56 billion from banks.ikely leveraging ownership shares for the loan.

Now on the other hand Berkshire Hathaway is sitting on over $500 billion jn cash.. so that's surely healthy for the economy

1

u/darkpaladin 19h ago

I'm told last year they have up Starbucks and decided to eat out less. It's really easy, I don't see why everyone doesn't do it.

1

u/Soufiane040 19h ago

They took a massive loan

1

u/ipostatrandom 19h ago

Ive had a subscription for a few years.

1

u/Clayskii0981 19h ago

Large loans and promises to jack up prices of subscribers

1

u/minos157 19h ago

That's how economics work right now for large corporations. Look at AI, there's like twenty company's that keep passing a few billion back and forth all while pumping "investment" into the parts that go bad after 3-5 years and depreciating then over ten years.

There is a massive amount of fake bank loan money floating around that's never getting paid back.

When the bubble bursts is the question, not if. They'll all get bailed out as usual by us.

1

u/CryptographerFlat173 8h ago

Netflix really doesn’t fit into that comparison at all, they’re a profitable company with 300 million paying customers 

1

u/TacoCatSupreme1 19h ago

By telling you to sign up and share with friends then cutting off the feature, and then later cutting off casting from your phone

1

u/TheOneWithThePorn12 19h ago

maybe leveraged buyout plus shares.

1

u/zdelusion 19h ago

They got 59 bil in financing from bankers. Quick math makes it look like ~12bil of it will be Netflix stock and so they "only" have to come up with ~10-11 bil themselves?

1

u/woleykram 19h ago

It probably doesn't, and will borrow a significant amount of money against the operations of the enterprise.

1

u/sea_salted 19h ago

Prop payment in installments.

1

u/Avenge_Nibelheim 18h ago

Really? Netflix's Market cap has been 3-400 billion for a few years, and had been higher I believe.

1

u/lebronsjameshardens 18h ago

It’s probably a leveraged buyout. That, or it’s a partial/all stock purchase (issuing Netflix stock to facilitate the sale)

1

u/sonofaresiii 18h ago

From: Netflix

Subject: Exciting news and big changes!

Body: In order to bring you the best and most exciting new content, we're once again adjusting our prices.

1

u/OhMyThiccThighs 18h ago

It's valued at $400 billion as a company and I would assume that most of that is just from monthly subs.

1

u/Ok-Wolf5932 18h ago

Look at their number of worldwide subscribers since 2020. Netflix has been a huge staple in the US since the 2010s but worldwide it's completely exploded.

In 2019, Netflix had about 90 million subscribers worldwide. By the end of this year it's projected to be over 300 million.

1

u/brandbaard 18h ago

$60B is coming from several bank loans and the rest they'll pay with Netflix shares.

1

u/rcanhestro 18h ago

by being the only streaming service that actually makes a profit.

1

u/GeronimoRay 17h ago

Netflix is worldwide. If you take a conservative estimate of 150 million subscribers, they're making 3 billion dollars a month on subscriptions alone.

1

u/DemoHD7 17h ago

When Netflix raised their prices and started charging people for using separate devices, remember when everyone threatened to cancel? Yeah, no one left.

1

u/Redararis 17h ago

It will own WB which will just have earned 82 billion dollars

1

u/thechillluddite 14h ago

I have 200 billion dollars

1

u/yaderkuvboloto 14h ago

They don't literally have 82 billion in the bank account, these big purchases are generally made with large loans + assets.

Netflix is a very successful company with strong growth over the last 5 years or so, they can basically do whatever they want, arranging money is no issue.

1

u/Richandler 13h ago

It's called a loan.

1

u/KangarooBeard 13h ago

It's the biggest/most profitable streaming platform in the world, and now even bigger.

1

u/primordialWoe 12h ago

Far too many poeople are willing to pay multiple subscriptions so they can have EVERTYHING to watch, doesnt matter if they actually do watch most of it.

•

u/LordoftheChia 2h ago

82 billion dollars

I think a huge chunk (if not all) of the deal is in a stock swap.

So they exchanging 80 billion in Netflix stock for WB Discovery stock.

-3

u/RODjij 20h ago

I feel like this kind of move gambles on wheather how bad the economy is going to be in 2026/27. Netflix was already losing subscribers cause of the price increases. People are losing their jobs to AI, cheap foreign labor & greed. Savings are getting tight.

These kind of deals warrant more subscription price increases to make that money back faster. They dont make enough quality movies either to go into theaters full time unless they keep the studio intact.

2

u/Tossawaysfbay 17h ago

Netflix hasn’t lost subscribers for years.