What do you get the CEO who has everything this holiday season? Well, based on its increasing popularity, the thing everybody wants under the tree this year is Warner Bros. It was the focus of at least three major entertainment companies recently. Paramount, Netflix and also Comcast were engaged in a bidding war over the studio, one that we thought had been settled last week.
Last Friday, it was announced that Netflix’s bid to acquire Warner Bros. had been accepted, which left the other two competitors, Paramount and Comcast, seemingly out in the cold. However, this morning, Paramount revealed it wasn’t done when it launched a hostile takeover bid. However, in an appearance at the UBS Global Media and Communications conference (via Variety), Netflix CEO Ted Sarandos indicated that he doesn’t plan to lose sleep over the continued battle, as he still expects Netflix to win the day. He said…
Today’s move was entirely expected. We have a deal done, and we are incredibly happy with the deal. We think it’s great for our shareholders. It’s great for consumers. We think it’s a great way to create and protect jobs in the entertainment industry. We’re super confident we’re going to get it across the line and finish.
Certainly nobody is expecting Netflix’s CEO to sound alarm bells only a couple days after the deal was announced. However, if we take him at his word that the move made by Paramount earlier today to attempt to simply purchase over $100 billion in Warner Bros. stock was “entirely expected,” then we can bet Netflix either has a reason to believe it won’t work, or they have a counter in mind if and when it becomes necessary.
Ted Sarandos calls it a “done deal,” though strictly speaking, that isn’t true. There will be a lot of business decisions left to be made, and the deal will require regulatory approval from the U.S. government to be sure there are no antitrust concerns. It's not unlike what Paramount itself needed when it merged with Skydance earlier this year.
There is the possibility that it could be decided that the largest streaming platform in Netflix, taking ownership of one of the other top names, HBO Max, might constitute too much of a monopoly in the streaming space. That said, the same issues would be at hand if Paramount and Warner Bros., two of the largest movie studios, were to be housed under one roof.
Whether or not this is all a done deal or not remains to be seen. Perhaps Paramount is just spinning its wheels in a last-ditch effort to get what it wants. We'll keep you apprised as more updates on this shakeup in the entertainment industry come in.
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