Additional Coverage:
- It’s easy to understand why Netflix walked away from WBD (businessinsider.com)
Netflix Pulls Plug on Warner Bros. Discovery Bid Amid Shareholder & Political Pressure
Washington D.C. / Los Gatos, CA – Netflix, the streaming giant, has officially backed out of its ambitious $83 billion bid to acquire Warner Bros.
Discovery (WBD). The unexpected withdrawal comes after months of speculation and appears to be a direct response to significant opposition from both the company’s shareholders and key political figures.
The decision was solidified on Thursday, just hours after Netflix co-CEO Ted Sarandos visited the White House, reportedly to discuss the proposed acquisition. While the specifics of the discussion remain private, the subsequent announcement from Netflix suggests that assurances for the deal’s approval were not forthcoming. This follows recent public pressure from former President Donald Trump, who last weekend urged Netflix to remove a board member who had reportedly offended him, highlighting the political hurdles facing major corporate mergers in the current climate.
For weeks, Netflix investors had expressed their discontent with the proposed acquisition, driving down the company’s stock price. The shares began to rebound this week as rumors of Paramount’s increasing chances for the deal circulated, and saw a significant 10% jump in the hours immediately following Netflix’s announcement to withdraw.
This move marks a departure from Netflix’s historical strategy, as the company has traditionally shied away from such large-scale acquisitions. The initial bid for WBD was seen as a bold play for the company to expand its content library, particularly the film and television studios and HBO.
With Netflix now out of the running, it is widely anticipated that Larry and David Ellison’s Paramount will emerge as the new owner of WBD. This would encompass not only the movie/TV studio and HBO, but also WBD’s extensive collection of television networks, including CNN.
The implications for WBD’s various assets and personnel are still unfolding. Questions arise regarding the future leadership of CBS News and CNN, the morale of HBO employees under new ownership, and the ongoing success of the Warner Bros. studio. Furthermore, Paramount’s previously announced financing plan, which includes a significant $24 billion from three Gulf states – Saudi Arabia, Qatar, and Abu Dhabi – will likely come under renewed scrutiny.
Should Paramount’s acquisition proceed, the Ellison family, who were considered minor players in the media landscape just a year ago, are poised to become titans of the industry. Their conglomerate would control two major movie studios, two prominent news operations, two significant streaming services, and a broadcast network with a long-standing NFL deal. This would be an astonishingly large and influential portfolio for any owner, particularly a family with limited prior experience running media companies.
The Ellison family’s reported strong relationship with former President Trump has been a recurring theme in discussions surrounding this deal. While the full extent of this relationship and its influence remains complex, the timing of Netflix’s withdrawal, juxtaposed with the Ellisons’ perceived political alignment, suggests a significant advantage for Paramount in securing the WBD acquisition.
Read More About This Story:
- It’s easy to understand why Netflix walked away from WBD (businessinsider.com)