On Friday, Warner Bros. Discovery’s board agreed to promote its studio and streaming belongings to Netflix in an $82.7 billion deal that many believed would reshape Hollywood. However only a weekend later, the plot shifted: Paramount Skydance CEO David Ellison got here out swinging with a fair bigger, all-cash proposal to purchase all of WBD’s belongings for $108.4 billion (or $30 per share). By going straight to WBD shareholders, the younger media govt argued that Paramount would function a greater residence for WBD and assist protect Hollywood’s legacy.
Ellison’s bid notably contains WBD’s TV networks—CNN, TBS, TNT and others—which Netflix didn’t need. The proposal is reportedly partially backed by Ellison’s father, Oracle founder Larry Ellison, and RedBird Capital Companions, which additionally financed Skydance Media’s $8 billion acquisition of Paramount World that closed in August.
In an interview with CNBC’s Squawk Field immediately (Dec. 8), Ellison known as a Netflix acquisition a “horrible deal for Hollywood” and argued that Paramount’s supply would higher serve clients and the trade. “As somebody who spent the final 15 years of my life producing motion pictures and tv exhibits, that is an trade that I like, that is an existential second for our enterprise, and we consider that what we’re providing is healthier for Hollywood. It’s higher for the shoppers and it’s pro-competitive,” he mentioned.
Earlier than Paramount entered the fray, a lot of the weekend chatter centered on what a Netflix takeover would possibly imply for the way forward for leisure. Hollywood guilds—together with SAG-AFTRA, the WGA and different teams—shortly started exploring methods to dam the merger. Lots of their issues stem from fears that additional consolidation would result in job and wage losses, lowered competitors and fewer artistic freedom and content material variety. There are additionally anxieties concerning the theatrical enterprise, given Netflix co-CEO Ted Sarandos’s long-held perception that watching motion pictures in theaters is “outdated.”
A number of politicians have additionally raised crimson flags. Senator Elizabeth Warren known as the proposed Netflix–WBD mixture a “nightmare” that might end in “greater subscription costs and fewer selections.” President Donald Trump has likewise voiced skepticism concerning the deal.
Ellison argues that Paramount’s deal would ease antitrust issues and truly improve competitors by pairing Paramount+ with WBD’s HBO Max to higher rival Netflix and Disney. A mixed Netflix and WBD streaming service would create one of many trade’s largest platforms and virtually definitely set off intense antitrust assessment. Netflix has greater than 300 million subscribers, whereas WBD’s streaming companies have round 128 million. In distinction, Paramount+ has solely round 79 million. A merger with Paramount will seemingly face a smoother regulatory course of attributable to its comparatively smaller scale.
Some analysts speculate that the Ellisons’ shut ties to Trump may give Paramount a bonus with regulators. Since making the bid, Ellison has mentioned he has had “nice conversations” with the President, although he careworn that he doesn’t “wish to communicate for the President.”
In the meantime, regardless of Trump’s skepticism towards a Netflix–WBD merger attributable to issues about market dominance, he referred to Netflix Co-CEO Sarandos as a “implausible man” and “nice individual.”
As of Monday afternoon, WBD mentioned it will assessment Paramount’s supply and difficulty a call inside 10 days. In an announcement, the board emphasised that it “isn’t modifying its suggestion with respect to the settlement with Netflix.” As a result of WBD has already signed an settlement, it will owe a $2.8 billion breakup charge if it accepts Paramount’s bid as an alternative. Netflix, for its half, must pay a $5.8 billion breakup charge if the transaction collapses or fails to safe regulatory approval.
