Netflix Was Working on Buying Disney Before Warner Bros. Deal, So is Disney Up For Sale as Well!?
Netflix making a play for Warner Bros. Pictures and HBO already feels like a massive turning point for Hollywood, but it turns out this was not the streamer’s first stop while scouting for a major acquisition.
According to new reports, Netflix actually explored the idea of buying Disney and everything that comes with it before locking onto its current $82.7 billion move for Warner Bros. Discovery’s film and television assets.
That early exploration would have put Marvel Studios, Star Wars, Pixar, and even Disney’s theme parks under the Netflix umbrella. Bloomberg notes that the company was eyeing a truly sweeping expansion, and that Electronic Arts was another option on the table.
EA has since struck a deal to go private with an investor group that controversially includes Saudi Arabia’s Public Investment Fund, so that option is now long gone.
Netflix’s leadership ultimately backed away from Disney for a mix of philosophical and financial reasons. Co-founder and chairman Reed Hastings prefers growing internally rather than through massive corporate takeovers.
He reportedly avoids major acquisitions because he would rather build things from scratch. There was also a pricing concern since executives could not fully unite around a deal. They felt they could end up “hurt their stock price by overpaying for an asset that traded at a much lower multiple.”
Disney being on the market at all sends its own shockwaves through the entertainment industry. The company that has dominated pop culture for decades is now in a position where another major corporation could swoop in and reshape its future.
The fact that Netflix and Disney were in negotiations at one point is wild! Anyone looking to take on the massive empire of Disney shows how rapidly the balance of power in Hollywood is shifting, and it raises big questions about what the next era of media consolidation will look like.
With that potential deals off the table, Netflix moved forward with its pursuit of Warner Bros. and is now positioned to control one of Hollywood’s oldest studios along with HBO, DC Studios, and major franchises like Harry Potter and The Lord of the Rings.
Netflix will still face competition from Paramount Skydance as the process continues, but the streamer is clearly determined to fold theatrical and streaming operations into one enormous entertainment ecosystem.
Industry watchers are understandably anxious about what this means for theaters. If Netflix ends up running a Netflix Warner Bros. HBO mega platform, a sharper monthly subscription price is almost guaranteed. There is also the fear that Netflix’s general philosophy could lead to a diminished theatrical experience.
Co CEO Ted Sarandos insists otherwise and has been vocal about preserving the traditional release model for Warner Bros. movies.
He recently said, "We didn’t buy this company to destroy that value. We’re deeply committed to releasing [Warner Bros.] movies exactly the way they release those movies today.
“If we did this deal 24 months ago, all those movies we saw this year do so well at the box office for Warner Bros. would have been released in the same way in theaters, talking about 'Minecraft,' 'Superman,' 'Weapons,' 'Sinners,' All those movies. With the Warner Bros. operating entity, we think it’s really important the way that they create and the way that they drive value."
It is a reassuring promise, although Sarandos has also been open about wanting to shorten the typical theatrical window. With movie theaters already fighting to bring audiences back, a tighter window could make the situation tougher for multiplexes that rely on exclusive access to new releases.
Still, Netflix buying Warner Bros. gives the company everything it has been chasing a deep library of beloved franchises, a prestigious theatrical brand, and a shot at reshaping the entertainment landscape.
The idea that it could have been Disney is pretty crazy, but the path Netflix chose is setting up a future where the streamer becomes one of the most powerful forces in Hollywood.