Big! Netflix wins bidding war for Warner Bros. Discovery
What's the story
In a significant development, Netflix has reportedly won the bidding war for Warner Bros. Discovery (WBD), according to Deadline. The streaming giant's bid was around $28 per share, mostly in cash. This comes after WBD opened itself to bids in October following offers from Paramount. Now the deal is expected to be finalized between the two parties.
Bid details
Netflix's bid includes $5 billion breakup fee: Report
Netflix's winning bid for WBD included a $5 billion breakup fee in case the deal doesn't go through, reported Bloomberg. The acquisition will give Netflix control over Warner Bros. Studios and HBO Max streaming assets. Meanwhile, Paramount's offer was for all of WBD, while Comcast also made a bid for the studio and streaming businesses only.
Regulatory hurdles
Paramount raised antitrust concerns over Netflix's bid
Paramount argued that it was the only bidder with a "clear path" to closing the deal, citing potential regulatory issues with Netflix's acquisition of HBO Max. The company claimed in a letter to WBD that rival offers from Netflix and Comcast "present serious issues that no regulator will be able to ignore." It also criticized the sale process as being unfairly tilted toward Netflix.
Management conflicts
Paramount's criticism of WBD CEO David Zaslav
Paramount also took a veiled dig at WBD CEO David Zaslav, alleging that the sales process has been "tainted" by management conflicts. The studio claimed that certain members of management have potential personal interests in post-transaction roles and compensation due to recent amendments to their employment arrangements. Despite these criticisms, WBD maintained that its board has fully complied with its fiduciary obligations and will continue to do so.
Industry impact
Netflix's potential acquisition of Warner Bros. could reshape industry
The potential acquisition of Warner Bros. by Netflix could significantly reshape the entertainment industry. The deal would provide Netflix with a global theatrical distribution apparatus and a massive library that includes titles from DC Studios, Turner Entertainment, HBO, New Line, and the MGM pre-May 1986 catalog. Notably, the swift-moving bidding happened amidst industry voices trying to rope in Congress's support against Netflix's merger. Top Hollywood producers wrote to Congress anonymously, urging them to publicly oppose the acquisition.