When it was announced that Netflix had entered into a deal to purchase Warner Bros., it sent a shockwave through the entertainment industry. Nobody knew quite what it meant that the streaming giant was buying a legacy movie studio. But since the announcement, there has been little time to figure out what the future holds, because Paramount, which seemingly lost out on its bid, hasn’t given up.
Paramount launched a hostile takeover bid of Warner Bros. in the days following the announcement of the Netflix deal. It’s been offering more money to shareholders, though Netflix argues Paramount is a much bigger risk. Initially, Netflix CEO Ted Sarandos hadn't seemed to be worried about Paramount, but in a recent comment to Deadline, he appeared a bit annoyed by the whole thing, saying…
We have a signed deal with Warner Bros., they’re trying to circumvent it. The only thing I would like is that if we, in this process of if you wanna try and outbid our deal between now and the point we get regulatory approval, just make a better deal. Just put a better deal on the table.
From a pure dollars-and-cents perspective, Paramount has had the better deal, offering more money per share than Netflix had offered, although Paramount’s deal is for the entirety of Warner Bros., including the linear networks that have been spun off into a separate company. Netflix only wants the movie and TV studio. The WB board is currently in talks with Paramount that might sweeten that deal even more, likely requiring Netflix to increase its own offer if it wants to keep its deal in place.
One of Paramount’s major arguments regarding why it is the better option than Netflix has surrounded the market share of the industry that Netflix would have if it added Warner Bros., mostly focused on the streaming dominance that would arguably exist if market leader Netflix added HBO Max. However, Ted Sarandos calls that “misinformation” and argues that the fight should just be over who offers shareholders the better deal. He continued…
Don’t make up stories, don’t [spread] misinformation about market share and all these. Just put a better deal on the table and see if you can win.
Paramount has even taken the battle to court in an attempt to prevent Netflix's acquisition. Many in Hollywood have spoken out about the fight for Warner Bros. While nobody seems to love the idea of Warner Bros. being sold to either party, some do feel one or the other would be a worse option.
Analysts seem to think that a better, or at least a higher dollar value, deal from Paramount will be on offer by the end of the company’s seven-day window to offer one today. At that point, Netflix may need to offer something more itself, or walk away. In the end, either a Netflix or Paramount purchase of Warner Bros. will be a major shift in the industry with long-reaching repercussions. We won’t even know what these changes might be until we know which deal is moving forward.
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