More from Netflix isn’t buying Warner Bros, Paramount is
What the bidding war over Warner Bros. Discovery says about the future of Hollywood, with Puck’s Julia Alexander.
As reported by Bloomberg, the revised deal would replace Netflix’s existing agreement to acquire WBD’s studio and streaming business in a cash and stock transaction. The rumored change comes as Paramount continues to press WBD to accept its “superior” $108 billion all-cash deal for the entire company.
The WBD board of directors said on Wednesday that Paramount’s amended bid from last month “remains inferior” to Netflix’s offer, adding that Paramount “continues to provide insufficient value.”
Apparently, even a personal guarantee from Larry Ellison wasn’t enough to top Netflix’s bid, which Netflix doubled down on today.
The new offer has a personal guarantee from Larry Ellison. WBD says it will now review it.
Last week, we talked about how Warner Bros. — quite reasonably! — had some agita about David Ellison’s bid for the company. Well, what do you know, David’s daddy is going to personally guarantee the offer. Also, since the last time we talked, Jared Kushner backed out of the nepo baby bid.
Netflix’s co-CEOs, in a letter to WBD stockholders:
There’s been a lot of talk about theatrical distribution, so we want to set the record straight: we are 100% committed to releasing Warner Bros. films in theaters with industry-standard windows. While this hasn’t been part of our business model until now, we are looking forward to bringing this expertise from Warner Bros. to Netflix.
WBD is urging shareholders to reject Paramount’s latest offer.
He’s withdrawn financial backing from the bid, which may leave it floundering, and the Warner Bros. board has recommended shareholders reject the hostile offer. It looks like everyone involved is beginning to realize what The Verge’s own Liz Lopatto pointed out yesterday: “What Paramount is doing doesn’t make any fucking sense.”
Update: The Warner Bros. board has recommended rejecting the Paramount bid.
A plan so astonishingly dumb, even Warner Bros. doesn’t believe it’ll happen.
As Ted Sarandos and David Ellison play out a public spat over whose turn it is to play with Warner Bros., while trying to impress Trump and the regulators along the way, just remember that the real winners at the end will be HBO Max subscribers.
sam flynn:
It’s really fun how we all get to sit around and watch these idiots toss gold bars back and forth across Trump’s desk while waiting to see if an HBO Max subscription will be $80 or $100 a month this time next year.
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After launching a hostile bid for the entertainment giant, Paramount’s Ellison told CNBC that Netflix’s deal to buy part of WBD would create a company with “unprecedented market power:”
When you combine the number one streamer with the number three streamer, that creates a company that has unprecedented market power, north of 400 million subscribers. The next largest competitor is Disney, with just under 200 million. That’s bad for Hollywood, that’s bad for the creative community, that’s bad for consumers.
Despite Netflix co-CEO Ted Sarandos’ efforts to woo the president last month, Trump said on Sunday that plans to combine the streamer with Warner Bros. “could be a problem.” Trump said that Netflix already has a “very big market share,” which will “go up by a lot” if the $83 billion buyout goes ahead.
WB has a checkered history of acquisitions, but joining forces with Netflix would elevate it to a new level of prominence.
Warner Bros. mergers have a not-so-great history, but with this deal, co-CEO Greg Peters said on an analyst call that, as transcribed by Deadline:
We understand these assets that we’re buying, the things that are critical in Warner Bros. are key businesses that we operate in, and we understand. A lot of times, the acquiring company, it was a legacy non-growth business that was looking for sort of a lifeline. That doesn’t apply to us.
Co-CEO Ted Sarandos, from an investor call:
This deal is pro consumer, pro innovation, pro worker, it’s pro creator, it’s pro growth. And our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need.
From its website:
The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent. The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers. Industry workers along with the public are already impacted by only a few powerful companies maintaining tight control over what consumers can watch on television, on streaming, and in theaters. This merger must be blocked.
From its press release:
Netflix expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.
“Expects” is doing a lot of work there. But responding to an investor question about theatrical plans, Netflix co-CEO Ted Sarandos said:
I wouldn’t look at this as a change in approach for Netflix movies or for Warner movies for that matter.
WBD’s board of directors determined that “this structure – Warner Bros. joining Netflix, and Discovery Global becoming a focused standalone company – provides the strongest long-term foundation for both sets of businesses,” Zaslav says.
TweakTown says it has “received confirmation that Warner Bros.’ games studios, IP, and content will indeed be part of the transaction.”
