Today, WBD’s board announced that it has unanimously decided that its shareholders would be much better off rejecting Paramount Skydance and accepting Netflix’s bid to buy the company’s studio production and streaming arms. The news comes weeks after WBD first said that it was ready to take Netflix up on its $82.7 billion acquisition offer, and days after Paramount tried to keep the bidding war going by upping its offer to $108 billion
In a statement about WBD’s decision to rebuff Paramount’s advances yet again, board chair Samuel A. Di Piazza, Jr., described the David Ellison-owned company’s latest offer as “inadequate” and warned that it would come with “significant risks and costs imposed on our shareholders.”
“This offer once again fails to address key concerns that we have consistently communicated to Paramount throughout our extensive engagement and review of their six previous proposals,” Piazza said. “We are confident that our merger with Netflix represents superior, more certain value for our shareholders and we look forward to delivering on the compelling benefits of our combination.”
In a statement of their own, Netflix co-CEOs Ted Sarandos and Greg Peters echoed Piazza’s sentiments about Paramount Skydance’s “unsolicited, inferior and illusory” offer being a risky, uncertain bet for WBD’s shareholders. They also described the entire bidding process — which led to them being the current frontrunners to win — as having “delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry.”
“Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television,” Sarandos said. “We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen.”
Peters added that a Netflix / WBD acquisition deal would be “fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth.”
CEOs trash talking their peers during these kinds of competitions is to be expected, but the WBD board’s insistence that selling to Paramount Skydance would be a bad idea feels very reasonable right now because one of the big partners backing Ellison’s bid is pulling out. Bloomberg reports that Jared Kushner’s Affinity Partners private equity group is no longer part of the consortium of entities — which also includes sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar — that were giving Paramount Skydance money for its all-cash bid to buy WBD in its entirety. It still is not clear exactly how much money Affinity Partners was providing in the grand scheme of things, but the firm’s connections to Kushner, president Donald Trump’s son-in-law, represented a major conflict of interest given that any deal to buy WBD would require regulatory approval from Trump’s Department of Justice and the Federal Trade Commission.
No matter who buys WBD (or any parts of it), the outcomes are almost certainly going to be bad for consumers and the larger entertainment industry as a whole. But the implications of a Paramount Skydance / WBD merger seemed uniquely terrible when you considered who was financing it and how Ellison has handled other media companies that he has recently bought.
