Netflix’s Warner Purchase is an $82.7 Billion Blunder

Netflix’s $82.7 billion proposed acquisition of Warner Bros. Discovery, announced Friday morning, will likely prove a stupendous error by a management team that until now has rarely put a foot wrong.

Netflix paying a huge price—27.5 times next year’s expected profits, well above prevailing multiples for film and TV companies—for businesses that likely won’t help it add many subscribers. Moreover, the deal is likely to face severe regulatory obstacles. That suggests Netflix executives will be distracted for the next year to 18 months—the time they expect it will take to close—trying to win approval. And in the end, they will likely lose.