Netflix has pulled out of the bidding war for Warner Brothers (Warner Bros Discovery), opening the way for its rival Paramount to take over the Hollywood veteran.
This means that the news channel CNN is also likely to be under the control of the family of the tech billionaire who is considered a Trump supporter Larry Ellison hike. Paramount Skydance, which was taken over by the Ellisons last year, recently improved its bid for Warner Bros Discovery from $30 to $31 per share. The Warner board of directors has now decided that the offer is superior to the previously accepted offer from Netflix. The streaming giant would have actually had four days to approach Paramount with a better proposal. But Netflix said if it tried to outbid Paramount, the deal would no longer be financially attractive.
Since Warner’s new Paramount offer was classified as the better one, the company is now likely to win the contract. Paramount had previously agreed to cover the $2.8 billion contractual penalty that Warner must pay to Netflix in this case.
Paramount wants more weight
Netflix offered almost $83 billion just for Warner Brothers’ studio and streaming business. The TV stations should be spun off into a new company. After the increase, Paramount is offering around $111 billion for the entire current group, including the television division.
Paramount is run by Larry Ellison’s son, film producer David Ellison. He wants to gain weight in Hollywood by taking over Warner Bros. Discovery. Paramount is among the smaller players in the industry. Warner now owns, among other things, the DC superhero universe with Superman and Batman, film series such as “Harry Potter” and a strong streaming business based on the pay channel HBO.
Competitive exam
At the same time, California’s Attorney General Rob Bonta warned the companies that there would be a competition review – and that a takeover of Warner by Paramount was not yet a sure thing. The competition watchdogs in Washington will also take a close look at the deal given its dimensions. According to media reports, the Ellisons were hoping for a positive decision given their proximity to Trump.
Paramount agreed to pay $7 billion if the deal fell through. Large portions of the purchase price are personally guaranteed by Larry Ellison. The 81-year-old tech mogul can afford it: his fortune is currently estimated by the financial service Bloomberg at a good $200 billion.
Fear of Job cuts in Hollywood
The mood in Hollywood was divided regarding the bidding war between Netflix and Paramount. Netflix was guilty of always focusing on streaming and its top managers had expressed skepticism about the movie theater business in the past. Assurances from co-chief executive Ted Sarandos that Warner films would be released to theaters as they were did not entirely offset the mistrust.
On the other hand, it was also clear that Warner’s studio business and Netflix’s previous activities would largely complement each other. If Paramount buys it, however, many structures will be duplicated, which could result in major job cuts.
Future of CNN
The bidding war also concerns the fate of the news channel CNN, which often reports critically on US President Donald Trump. Trump said in December that it was important to ensure that CNN would definitely change hands in a deal.
Trump critics in the US fear that CNN could lose editorial independence under the Paramount umbrella. The concern is not unfounded: Since the Ellisons took over, the newsroom at the Paramount broadcaster CBS has adopted a friendly tone toward the Trump administration.
The technology group Oracle, controlled by Larry Ellison, also plays a key role in Tiktok’s US business as a technical service provider that is responsible, among other things, for data storage and the algorithm that suggests the next videos to users.
This is how the stocks react
Netflix shares rose 8.51 percent to $91.79 after hours on the NASDAQ. From an investor’s perspective, Netflix is in a better position without Warner Brothers. Netflix announced that it would continue to invest in high-quality films, series and entertainment. The company also wants to restart a share buyback program. The Netflix share price had fallen significantly in recent months due to the costly takeover plans. Paramount Skydance also gains 4.74 percent to $11.71, while Warner titles lose 1.74 percent to $28.30.
LOS ANGELES (dpa-AFX)
By the way: Netflix and other US stocks can even be traded on finanzen.net ZERO until 11 p.m. (without order fees, plus spreads). Open a depot now for free and secure a new customer bonus!
Selected leveraged products on Netflix
With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on Netflix
The leverage must be between 2 and 20
Advertising