Paramount files a hostile takeover bid against Warner Bros. Discovery (WBD) at US$108.4 billion (about C$150 billion), a direct challenge Netflix recently announced plans to acquire the entertainment giant.
In a press release, Paramount said Netflix's $82.7 billion (about C$114.5 billion) has “less” value for WBD shareholders, arguing it would result in a “protracted regulatory clearance process in multiple jurisdictions with an uncertain outcome.” Paramount says its proposal represents a “more reliable and faster path to completion” for WBD. The company also says it wants to buy all of WBD, including its Global Networks business, which operates news and sports brands such as CNN and Discovery, while Netflix is only interested in WBD's film and streaming divisions.
Of course, there are reasons to be wary of any move beyond the general disdain for consolidation. As for Netflix, there are concerns about the future of the already troubled theatrical business. While Netflix has said it will honor existing WBD theatrical release agreements, it says it intends for those windows to “evolve” to become more “consumer friendly.” To date, the company only releases films in theaters for the required period of time to be eligible for awards such as the Oscars. People also aren't optimistic about Netflix's commitment to the theatrical business, given that co-CEO Ted Sarandos Previously he called the theatrical model “outdated.”
Paramount, meanwhile, is attracting scrutiny because of owner David Ellison's close ties to Donald Trump. For example, he recently made headlines give the green light to the long-awaited Rush Hour 4 simply because Trump asked him to do it. Affinity Partners, the holding company of US President Jared Kushner's son-in-law, is also involved in Paramount's bid for WBD. And this is to say nothing of the fact that sovereign wealth funds from Saudi Arabia, a regime that known for human rights issues such as the murder of journalist Jamal Khashoggi. — support Paramount's move.
It remains to be seen what will come of Netflix and Paramount's respective bids for WBD. Naturally, any enterprise will be subject to scrutiny by regulatory authorities. Trump, for his part, said he would participate in approving the sale of VBDnoting that “there could be a problem” if Netflix acquired the company due to what market share it would then occupy.
Image credit: Paramount
Source: Paramount
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