Netflix (NFLX) told Warner Bros. Discovery’s (WBD) management that it would keep releasing films in theaters if it acquires the studio, Bloomberg News reported, citing people familiar with the matter.
The streaming giant has mostly resisted distributing its movies in theaters, giving some films limited theater runs to qualify for awards and placate talent.
Warner Bros. (WBD) has contractual obligations to release films in theaters, which Netflix (NFLX) reportedly said it would honor.
The first round of nonbinding bids for Warner Bros. (WBD) are due Thursday. Paramount Skydance (PSKY) is eyeing a full buyout, while Netflix (NFLX) and Comcast (CMCSA) are interested in WBD’s streaming and studio operations.
Warner Bros.’ (WBD) board is expected to meet before Thanksgiving to evaluate the bids, with the aim of wrapping up the process by year-end.
If Netflix’s (NFLX) bid is successful, it would be its largest ever deal. But the film industry is said to be concerned that this deal would eliminate another studio and major source of theatrical films.
Meanwhile, Morgan Stanley analyst Benjamin Swinburne said a Netflix (NFLX)-Warner Bros. (WBD) deal would have long-term benefits for the streamer. However, Netflix “may have the smallest synergy opportunity and perhaps the toughest regulatory path” to closing the deal.