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Exclusive negotiations are now underway between Warner Bros Discovery and Netflix for a blockbuster acquisition of its core studio and streaming operations, a development that could dramatically alter the film and television landscape.

A High-Stakes Competition

Netflix is said to be vying with other major players like Paramount Skydance and Comcast, the owner of Universal Studios and Sky, for control of the iconic Warner Bros studio, the premium HBO network, and the Max streaming platform.

According to reports Netflix has offered a hefty termination penalty of $5 billion should the deal fail to secure antitrust approval in the US.

The Offer Details

With Warner Bros Discovery shares sitting around about $24 per share, its total market valuation stands at around $60 billion. It is believed Netflix's offer ranges from $28 and $30 per share, which suggests a total bid value in the range of $70 billion to $75 billion.

Industry experts have cautioned that such a merger could raise significant antitrust concerns, as it would combine two of the most dominant subscription platforms in the United States.

Assurances and Strategic Moves

In its proposal, the streamer has provided guarantees that the Warner Bros film studio, home to major franchises like Batman and Harry Potter, would continue to enjoy wide theatrical releases.

Prior to a final agreement, Warner Bros Discovery is expected to complete a planned spin-off of its cable television channels, such as CNN, TBS, and TNT.

A Content Juggernaut

Should the deal proceed, Netflix would gain ownership of HBO, the maker of critically acclaimed hits including Succession, The White Lotus, The Sopranos, and Game of Thrones, along with an vast archive of classic television.

The studio formally initiated its sale process in October after attracting overtures by several interested parties.

Industry Concerns

The potential sale has not been without controversy. Acclaimed filmmaker James Cameron, director of Titanic and the Avatar series, recently warned that a sale to Netflix could lead to a "catastrophic loss of enduring worth" for the creative sector.

Initially, Paramount Skydance had been considered the early favorite. It had also offered a $5bn breakup fee if regulatory hurdles.

Claims Regarding an Uneven Playing Field

This week, the rival bidder argued in a letter that its bid was the most likely to secure regulatory clearance. Furthermore, the company accused Warner Bros of conducting an "biased sales process" that favored Netflix, calling it "compromised" in official documents.

Representatives for all companies involved have declined to provide a statement on the ongoing negotiations.