Warner Bros Chooses Netflix Over $108bn Paramount Takeover
Warner Bros Discovery urges shareholders to reject Paramount’s offer, backing a Netflix deal amid a major Hollywood takeover battle.
Paramount had argued that its offer was "superior" to Warner Bros.' $72 billion deal with Netflix for its film and streaming business.
But the saga over who would control one of Hollywood's oldest and most iconic movie studios took a dramatic turn when the Warner Bros. board "unanimously" recommended rejecting the offer, concluding that the deal with Netflix was in the company's best interest.
The media giant had put itself up for sale in October after receiving "multiple" expressions of interest from potential buyers, including the Paramount-Skydance proposal.
On December 5, Warner Bros. Discovery announced it had agreed to sell its film and streaming business to Netflix.
In a lengthy legal filing, the Warner Bros. Discovery board stated that Paramount's higher offer presented several significant risks and strongly refuted the notion that the Ellison family—one of America's wealthiest families—was financially backing the bid.
Paramount is backed by the billionaire Ellison family, which has close ties to the president.
In a move that underscores where the power now lies in the entertainment industry, the Warner Bros. board stated that the offer from streaming giant Netflix was well-financed and provided better long-term value for shareholders.
Netflix welcomed the Warner Bros. recommendation. Netflix co-CEO Ted Sarandos described the company's merger agreement as "superior" and "in the best interests of shareholders."
In a letter to Warner Bros. shareholders, Netflix reiterated its position that its bid for Warner Bros. included a clear funding structure and lower regulatory risk.
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Paramount could still return with another offer, meaning the takeover saga gripping Hollywood is far from over. A week after Netflix announced a deal to acquire Warner Bros., Paramount Skydance launched a new offer for the entire company, including its television networks.
The Warner Bros. takeover could face scrutiny from competition regulators in the US and Europe.
The new owner of Warner Bros. would gain a significant advantage in the highly competitive streaming market. They would acquire a vast library of films and TV shows, including Harry Potter, the MonsterVerse, Friends, and the HBO Max streaming service.
Some in the film industry have criticized the plan to merge all or part of Warner Bros. with a rival. The East and West branches of the Writers Guild of America have called for the merger to be blocked, arguing that it would lead to lower wages and job cuts.
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