It was back in December when Netflix made an $82.7 billion offer to win the bidding war to purchase Warner Bros. Discovery. But transactions of this magnitude take a long time to go through with lots of hurdles to clear, including political maneuvering, and Paramount Skydance owner David Ellison refused to give in so easily to Netflix’s win.
Leading up to Netflix’s announcement that they won the bid, Paramount alleged that the sales process was “tainted.” Paramount then made an unsolicited hostile
“superior all-cash offer” for WBD after the fact that was valued at $108 billion.
Earlier this week, WBD acknowledged that it received an offer from Paramount that was “superior” to its current agreement with Netflix. Netflix responded today by refusing to match the offer.
Here is an excerpt from the streaming giant’s press release on the matter, where they say it doesn’t make financial sense to match Paramount’s offer, and Netflix will be just fine going forward without acquiring WBD.
“Netflix, Inc. today announced that it has declined to raise its offer for Warner Bros. Netflix had earlier received notice from Warner Bros. Discovery (WBD) that its Board of Directors has determined Paramount Skydance’s (PSKY) latest proposal constitutes a “Superior Proposal” under the terms of WBD’s existing merger agreement with Netflix. Netflix issued the following statement in response from co-CEOs Ted Sarandos and Greg Peters:
The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.
Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process. We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.
Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertainment offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program.
We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”
This situation is of great interest to wrestling fans because WBD is the only media rights partner AEW has ever had, and there is a lot of debate over which WBD suitor is better (or worse) for AEW’s future. That’s in part because Netflix and Paramount both have strong ties to WWE’s parent company, TKO. Netflix currently holds the domestic rights to broadcast WWE Raw, while Paramount has a huge domestic rights media deal with TKO’s other brand, UFC.
Due to the nature of the offers, AEW’s fate on TBS would be completely in Paramount’s hands if they acquire WBD, whereas Netflix wasn’t interested in buying WBD’s television properties.
We’ll bring you more on this story as we have it, Cagesiders.
