Warner Bros. is reportedly considering reopening talks with Paramount despite having already agreed to sell to Netflix.
Bloomberg reported that members of Warner Bros.’ board are debating whether to talk to Paramount again after the company amended its offer, which would be a superior deal to that already set in stone by Netflix. However, Bloomberg made it clear that no decision has been made, and Warner Bros. may end up sticking with Netflix.
Paramount’s latest offer would give shareholders extra cash for each quarter the deal fails to close after this year (about $650 million), and would agree to cover the $2.8 billion breakup fee Warner Bros. would owe Netflix if it walked away. However, it did not raise its $30-per-share offer, valuing the deal at $108.4 billion including debt.
This comes just two months after Warner Bros. told its shareholders they should reject Paramount’s takeover bid for the company, urging them to approve the Netflix deal instead. At the time, Warner Bros. hit out at Paramount, accusing it of consistently misleading its shareholders by saying its bid had a “full backstop” from the Ellison family. “It does not, and never has,” Warner Bros. insisted. Netflix, as you’d expect, welcomed the decision. “The Warner Bros. Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders,” said Ted Sarandos, Netflix co-CEO.
Netflix’s proposal has sparked a tough response from some members of Congress, and it is expected to face significant scrutiny under antitrust laws. Meanwhile, at least one HBO Max subscriber has already sued Netflix, claiming the deal threatens to reduce competition in the U.S. subscription video-on-demand market.
Warner Bros.-owned streaming platform HBO Max includes everything from Game of Thrones to Harry Potter, and James Gunn’s DC Universe to Barbie, and its content is expected to be added to Netflix if and when the deal goes through.
After its announcement, Netflix sent subscribers an email of reassurance amid concern over potential price rises. The email promised subscribers that nothing was changing “today,” and confirmed that HBO Max and Netflix would continue to operate separately until the deal closed. It did not rule out future price rises, but did promise that current membership plans would remain in place at least until the deal goes through. As for when that will be, Netflix has said it expects to close the transaction in 12-18 months — so, at the earliest December 2026, but it could be as late as summer 2027.
In an investor call, Sarandos struck a confident tone when asked about the deal’s chance of success. “We’re highly confident in the regulatory process,” he said. “This deal is pro-consumer, pro-innovation, pro-worker, it’s pro-creator, it’s pro-growth.” As part of the same call, Sarandos said Netflix would continue to release Warner Bros. movies in theaters for now, though expected theatrical release windows to shorten over time to become “more user friendly.” More recently, Sarandos committed to a 45-day window for theatrical movie releases once the deal goes through.
One report has claimed Netflix is particularly keen to obtain Warner Bros.’ vast content library as the streamer ramps up its potential to offer AI-generation tools and content in the future.
Photo by Anna Barclay/Getty Images.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
