Trump: Deal may be 'a problem' as it gives Netflix monopoly

Paramount challenges Netflix bid to buy Warner Bros., with help from Jared Kushner

Also putting up cash for takeover offer are sovereign wealth companies from Saudi Arabia, Qatar and Abu Dhabi, and fellow Trump ally Larry Ellison, whose son runs Paramount

US President Donald Trump’s son-in-law Jared Kushner is teaming up with fellow Trump ally Larry Ellison and sovereign companies from Saudi Arabia, Qatar and Abu Dhabi to fund a Paramount Skydance bid to take over Warner Bros. Discovery, in a challenge to Netflix’s contested deal.

Netflix shocked the industry last week by announcing it had sealed an agreement to buy the Warner Bros. studio, drawing bitter reactions from voices in Hollywood worried about the future of their industry. Unlike Netflix’s offer, Paramount’s latest bid includes the buyout of cable channels such as CNN, TNT, TBS and Discovery — which would be added to its group of TV assets like CBS, MTV and Comedy Central.

“We’re really here to finish what we started,” said Paramount chief David Ellison — whose father Larry is the world’s second-richest man — in an interview with CNBC on Monday, as Paramount launched its sixth bid to acquire Warner Bros. Discovery since the bidding war with Netflix began in September.

A regulatory document released Monday stated that one of the backers of Paramount’s $30-a-share offer was Affinity Partners, an investment firm run by Kushner, who helped broker the Gaza ceasefire and is involved in the Ukraine peace talks.

Asked about the bidding war on Monday, Trump said neither party was “friends of mine” and that he wanted “to do what’s right.” He added that he had not spoken to Kushner about the Paramount bid.

On Sunday, before Paramount made its offer, Trump said Netflix’s deal “could be a problem” as it would leave the streaming behemoth with a huge market share of the film and TV industry.

In a break from usual practice, Trump said he would be “involved” in the government’s decision to approve the deal over fair competition concerns, instead of leaving the question solely in the hands of the US Department of Justice or Federal Trade Commission, as is usually the case.

Paramount’s offer values Warner Bros. Discovery (WBD) at $108.4 billion, and represents a 139 percent premium over Warner Bros. Discovery’s stock price of $12.54 when the bidding war began.

Paramount in a statement called Netflix’s bid, which values Warner Bros. studios at nearly $83 billion, “inferior and uncertain.”

“WBD shareholders deserve an opportunity to consider our superior all-cash offer,” Ellison said.

The Warner Bros Discovery board of directors on Monday afternoon said it would review Paramount’s offer, but was not modifying its recommendation with respect to Netflix.

It advised the company to “take no action at this time” in regard to the Paramount Skydance proposal.

Netflix declined a request for comment from AFP.

‘Far from over’

“The Warner Bros. Discovery acquisition is far from over,” said Emarketer analyst Ross Benes.

“Netflix is in the driver’s seat but there will be twists and turns before the finish line… The battle could become prolonged.”

Over the decades, Warner Bros. has produced film classics including “Casablanca” and “Citizen Kane,” as well as more recent blockbuster shows including “Friends,” “Game of Thrones” and the “Harry Potter” movies.

Paramount argued its deal provides greater regulatory certainty than the Netflix transaction, which it said would give Netflix a 43 percent share of global streaming subscribers and face “protracted regulatory challenges across the world.”

The combined company would unite Paramount’s portfolio — including Paramount Pictures, CBS, Nickelodeon and streaming site Paramount+ — with WBD’s assets including HBO Max and major sports rights.

Paramount said the merger would generate over $6 billion in cost savings while maintaining theatrical releases and increasing content spending.

Keeping movies in theaters is a very sensitive issue for the creative industry in Hollywood.

Netflix is already viewed negatively in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of the industry.

Many veterans consider theatrical releases essential to cinema’s appeal and prestige, and also integral to maintaining Hollywood jobs and a vibrant economy.

Warner Bros. Discovery’s share price skyrocketed by more than 7% on Monday while shares in Netflix fell by over three percent.

Times of Israel staff contributed to this report.