Netflix sends 'nothing's changing' letter to subscribers as Paramount makes hostile offer for Warner Bros
&imwidth=600&imheight=450&format=webp&quality=medium "Netflix sends 'nothing's changing' letter to subscribers as Paramount makes hostile offer for Warner Bros")
WBD is now at the centre of a high-stakes contest between Netflix and Paramount, backed by Oracle founder Larry Ellison, days after what appeared to be a near-certain announcement Photograph: (Others)
WBD is now at the centre of a high-stakes contest between Netflix and Paramount, backed by Oracle founder Larry Ellison, days after what appeared to be a near-certain announcement
Paramount Skydance on Monday (Dec 8) made a hostile 108.4-billion-dollar all-cash offer for the whole of the Warner Bros Discovery empire, in a tender that bypassed the WBD board and went directly to shareholders, just days after Netflix announced the acquisition of the film and television studios and streaming assets of the entertainment conglomerate. With the Paramount bid, WBD is now at the centre of a high-stakes contest between Netflix and Paramount, backed by Oracle founder Larry Ellison, days after what appeared to be a near-certain announcement from the streaming giant that it would acquire the prized studio and streaming operations of WBD.
Paramount Skydance makes a 30-dollar-per-share proposal
Paramount’s proposal has 54 billion dollars in committed debt from major banks, along with equity from RedBird Capital and Ellison-aligned investors, reports said. Paramount argues its offer provides 18 billion dollars more in cash than Netflix’s. It claims that its bid will face less regulatory scrutiny. It noted that Netflix’s US market share, if it merges with WBD’s streaming assets, would exceed 50 per cent and draw antitrust concerns from the Department of Justice.
WBD has been looking for suitors
Amid falling cable revenues, WBD CEO David Zaslav has been looking to pare losses. Formal bids for WBD emerged in late November, with Netflix aggressively seeking WBD’s studios and streaming assets, including HBO Max, in a deal valued at 72 billion dollars in equity, at 27.75 dollars per share.
How is Paramount’s bid different?
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Paramount seeks to acquire the entire company — Warner Bros studios, HBO Max, CNN, Discovery networks and cable channels. Besides Ellison, Paramount is backed by Middle Eastern financing, and has been positioning itself as the only “full-service” buyer.
What is happening with the Netflix–WBD negotiations?
The WBD board on 4 December granted Netflix exclusive negotiating rights and accepted a 5-billion-dollar breakup fee. Paramount accused WBD of a “rigged” process and failure to honour fiduciary duties, saying in a letter that Netflix’s bid carried “substantial risks.” Paramount highlighted Netflixs antitrust challenges, reduced theatrical releases and conflicts with cable networks. WBD had earlier dismissed these claims, stating that the sale process with Netflix had been “robust.”
Netflix sends midnight letter to subscribers'
After announcing that it would purchase WBD’s studio and streaming assets, Netflix sent a “midnight letter” to its 300 million subscribers on 6 December, promising “nothing is changing today,” on subscription pricing and content libraries. It also said theatrical releases would continue, but with shorter windows to transition to streaming in order to “meet audiences quicker.”
Netflix is trying hard to win regulators
US President Donald Trump has hinted that Netflix’s acquisition of WBD would be “a problem.” Ellison has reportedly lobbied him directly. Amid this, Netflix has intensified lobbying regulators. It has reportedly hired advisers and bankers familiar with Skydance’s own acquisition strategies.
What is the future for Warner?
WBD acknowledged the Paramount tender, but has not moved away from Netflix’s agreement. WBD has committed to a formal review of Paramount’s offer, which will remain open until 8 January. Labour unions and lawmakers have raised alarm about likely job losses and subscriber price hikes under Netflix. European regulators are also preparing reviews of the merger if it happens. Shareholder rejection, potential lawsuits, regulatory blocks or even no sale at all are possible.
