Warner Bros. Discovery Rejects Paramount

To paraphrase a movie Netflix may own very soon: “I hope this is the beginning of a beautiful friendship.” Warner Bros. Discovery’s board is urging stockholders to approve Netflix’s offer to buy the company and to reject Paramount’s hostile bid. In its offer, Netflix is promising $27.75 per share for WBD but not purchasing WBD’s cable companies. Instead, those will be spun off into a separate company that will continue to provide value for shareholders. Paramount, meanwhile, is offering $30 per share, but its potential deal would be for the whole company, including the cable networks. In a press release, WBD confirmed that Netflix’s agreement is the “more certain and superior alternative” to Paramount.

“This was a competitive process that delivered the best outcome for consumers, creators, stockholders, and the broader entertainment industry,” Netflix co-CEO Ted Sarandos said in a statement. “Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical-film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television. We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen.” 

That last line is the contentious point in Hollywood. The skepticism over Netflix purchasing WBD has much to do with the company long eschewing theatrical releases with traditional windowing before its movies go on its streaming service. “Over time, the windows will evolve to be much more consumer friendly, to be able to meet the audience where they are quicker,” Sarandos said on December 5, after first confirming that WBD had accepted Netflix’s bid. For now, at least, he’s changing his tune.