Reports of Netflix winning the bidding war for Warner Bros seem to have been premature. The legendary movie studio announced today that it would reengage Paramount for a limited one week window in order to get the company’s best and final offer. Not surprisingly, Netflix wasn’t too pleased with the development. Executives released a statement ripping Paramount’s “antics,” though they offered formal approval for the negotiating window as a means to “finally resolve” the ongoing mess.
The back-and-forth is all related to a vote on March 20th. That’s when shareholders of Warner Bros are going to decide whether to accept Netflix’s offer to buy the company. The Board has already approved and recommended the deal and is asking shareholders to vote for it. Paramount executives, however, have very publicly said they’re capable of putting together a more appealing deal for Warner Bros’ shareholders. They feel their offering has more long-term value and also that they have a better shot of getting regulatory approval from the US Government, since politicians have expressed some concerns about whether Netflix and Warner Bros merging is unhealthy for consumers.
I think Netflix was hoping Paramount would quietly walk away from the table at some point, but since that hasn’t happened, they’ve obviously decided letting them talk for a limited period of time to finally end all the public flirting is the right path forward. It’s pretty obvious from the tone of their public statement that they’re less than thrilled about the whole thing though. Be on the lookout for the sass in this portion of the official statement in particular…
Throughout the robust and highly competitive strategic review process, Netflix has consistently taken a constructive, responsive approach with WBD, in stark contrast to Paramount Skydance. While we are confident that our transaction provides superior value and certainty, we recognize the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics.
Ultimately, as a fan of the entertainment industry who cares deeply about a wide variety of diverse movies getting made, it’s hard to know who to root for here. Netflix has vowed to respect the theatrical window of Warner Bros films if they own the company, but the movie theater industry is so worried they put out an editorial demanding answers. Plenty of creatives have also spoken up. Paramount meanwhile has a longer track record with playing ball, but there’s something even scarier about two of the handful of movie studios we have left combining and further consolidating the industry.
I don’t imagine we’ll hear a ton from anyone involved until the negotiating window is over, but I do imagine, regardless of what happens, we’ll get some more snarky statements and business speak middle fingers. Here’s another one of my favorites that Netflix dropped today…
This extraordinary execution risk and track record of operational underperformance could impact PSKY’s ability to fund and close a transaction.
That’s a really fancy way of saying Paramount hasn’t lived up to recent financial projections, and even if they want to buy Warner Bros, we should all be worried if they even have the money to do so. In Wall Street circles, that’s a pretty aggressive right hand. It’ll be fun to see how Paramount punches back.
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