Paramount Skydance has launched a hostile bid to acquire Warner Bros Discovery, despite an announcement on Friday (December 5) that Netflix had agreed to buy its studio and streaming assets – Warner Bros.’ film and TV studios, HBO and the streaming service HBO Max.
Netflix didn’t agree to take on WBD’s traditional TV operations, including CNN and the Discovery Channel, as part of its $82.7billion bid. In contrast, Paramount bid $108.4billion for the entire company directly to shareholders this morning (via Reuters).
Paramount claimed that its acquisition would offer them better value, and would be more likely to get regulatory approval.
David Ellison, CEO of Paramount Skydance, described Netflix’s deal as “an inferior proposal which exposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process.”
David and his father, the billionaire tech mogul Larry Ellison, have been on good terms with US President Donald Trump and his administration, Larry even having conversations with a senior Trump aide about the changes he might like to see at CNN (via The Guardian).
Trump himself, meanwhile, has flagged concerns over the proposed Netflix takeover. He spoke highly of Netflix’s co-CEO Ted Sarandos, describing him as a “great person” who has “done one of the greatest jobs in the history of movies,” but said that the combined size of Netflix and WBD “could be a problem”.
He explained: “Netflix are a great company and they’ve done a phenomenal job. They have a very big market share. And when they have Warner Bros. that share goes up a lot. That’s going to be for some economists to tell. I’ll be involved in that decision.”
The Writers Guild of America also weighed in. “The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” they said. “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.”
In contrast, Democratic senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal warned last month that Paramount taking over Warner Bros. would result in “one company controlling almost everything Americans watch on TV,” with the studio having a greater market share than the current leader, Disney, if the acquisition was to go ahead.
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