Warner Bros. Discovery has reported that Paramount has increased its acquisition offer to $31 per share from its previous bid of $30 per share, a move that could escalate the competition with Netflix over the future ownership of the Hollywood studio. Paramount's aggressive bid began in December, challenging a deal that Warner had secured with Netflix to sell its studio and streaming business for $27.75 per share.
A potential acquisition by Warner Bros. Discovery would significantly alter the landscape of Hollywood and the broader media industry, integrating popular platforms like HBO Max and esteemed franchises like "Harry Potter." Depending on the outcome of the ongoing contest between Netflix and Paramount, important assets like CNN could also come under new ownership.
In its revised offer, Paramount has not only raised the share price but has also increased its regulatory termination fee to $7 billion. Additionally, the company has expedited a previously agreed-upon "ticking fee," which means it will pay 25 cents for every share per quarter the deal extends past a September deadline as opposed to the end of the year as initially stated.
Despite these developments, Warner Bros. Discovery cautioned that it has not yet determined whether Paramount's new offer exceeds that of Netflix under its current agreement. While Warner's board has consistently supported its deal with Netflix, any assessment that Paramount's proposal is superior would compel Netflix to either match the offer or revise its proposal within four days.
Lawmakers and entertainment trade organizations have expressed concerns regarding the ramifications of a takeover by either company, warning that such consolidations could further limit competition in an industry already dominated by a few major players. Critics argue this could lead to job reductions, a lack of diversity in film production, and increased costs for consumers, especially amid already rising streaming subscription prices.
The growing stakes have raised significant antitrust concerns, as the potential sale of Warner Bros. could hinge on regulatory approvals. The U.S. Department of Justice has begun its review processes, and similar scrutiny is anticipated internationally. Paramount has argued that its proposal is beneficial for consumers, while Netflix maintains that its own acquisition would promote competition against larger content libraries, specifically highlighting YouTube.
Moreover, politics may play a significant role in this merger battle. Former President Donald Trump has previously made statements indicating his interest in influencing a deal, although he later characterized regulatory approval as a matter for the Justice Department to decide. Trump's connections to Larry Ellison, the billionaire backing Paramount's bid, raise questions about potential political implications for the merger.
In the backdrop of this high-stakes bidding war, Trump has displayed a contentious relationship with both parties. He has criticized Paramount for editorial decisions at CBS's "60 Minutes," where CBS has seen significant changes since being acquired by Skydance under Ellison's leadership. Despite past interactions with Netflix co-CEO Ted Sarandos, Trump has also issued demands for Netflix to remove former U.N. ambassador Susan Rice from its board due to her controversial comments about corporate accountability regarding him.
As both Paramount and Netflix continue their public tussle over the acquisition of Warner Bros., the combination of economic, political, and regulatory factors will significantly influence the outcome of this competitive scenario in Hollywood.
