Netflix Faces Hefty Termination Fees in New Deal

Netflix Inc. has entered a strategic deal with termination clauses requiring significant fees. If the deal falls through, Netflix will pay $5.8 billion, while WBD would owe Netflix $2.8 billion. Additionally, Netflix secured a commitment letter for $59 billion in loans to fund the cash portion of the deal.

In a recent SEC filing, Netflix Inc. disclosed a major deal that includes hefty termination fees. Under certain circumstances, if the deal is terminated, Netflix could be obligated to pay a termination fee of $5.8 billion to WBD.

Conversely, if circumstances lead WBD to terminate the deal, they would be responsible for a $2.8 billion fee to Netflix. This arrangement underscores the high stakes involved in the transaction.

To facilitate the deal, Netflix has also announced that it has entered into a commitment for senior unsecured bridge term loans, totaling up to $59 billion, which will finance the cash portion of the consideration.