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Netflix’s bid to buy Warner Bros. Discovery’s streaming assets and studios has had a momentous week, which has now come to an end. Netflix has confirmed that it is walking away from its acquisition of Warner Bros. Discovery (WBD). Despite months of speculation and a high-stakes bidding war, the streaming giant has refused to match Paramount Skydance’s “superior offer,” effectively meaning that with the board’s support, Paramount must now win the vote on March 20.
While Netflix had the opportunity to raise its bid to stay in the race with DC, Harry Potter and HBO, co-CEOs Ted Sarandos and Greg Peters have decided to stay in line, citing financial discipline.
For those who are out of the loop, Netflix reached a deal with Warner Bros. Discovery in December to purchase HBO and HBO Max along with their TV and movie divisions, as well as the cable network and other assets, into a separate company. Under Paramount’s deal, they take everything. Following the initial announcement, Netflix emailed every subscriber around the world to announce the deal.
Netflix has refused to raise its bid, especially after months of Ted Sarandos being aggressive in offering his approach and hoping to convince regulators that they would be the best home for the property. Since Warner Bros. and Netflix gave Paramount the opportunity to increase its bid last week, Sarandos has committed to a number of interviews in business media and other outlets, including the Today program on BBC Radio 4.
According to reports, Paramount’s new bid will give them all the assets of Warner Bros. Discovery for $110 billion. You only have to rewind after about 18 months of company The overall market capitalization was less than $20 billion. Paramount is committed to saving at least $6 billion if the deal closes, although Sarandos said last week that number could be as high as $16 billion. As part of Paramount’s new bid, they will pay Netflix $2.8 billion as a break-up fee.
“It’s nice to have, of course not.”
In an official statement released by Sarandos and Peters, both said that they saw value in the merger, but that the price had become too high to be justified.
“The transaction we negotiated will create shareholder value with a clear path to regulatory approval,” he said. The statement reads. “However, we have always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match Paramount Skydance’s bid.”
The statement praised David Zaslav and WBD leadership for the “fair and rigorous process”, but ultimately placed the acquisition as a secondary priority to Netflix’s core mission.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” the CEO said.
What does this mean for Netflix subscribers
For those wondering if this means a slowdown in content, the answer appears to be a resounding “no.” As part of the announcement, Netflix reaffirmed its broader commitment to original programming.
The company confirmed that it will invest approximately $20 billion in quality films and series this year alone. Instead of spending tens of billions on massive corporate mergers, Netflix intends to double down on its “organic growth.”
For customers, this probably means a continued focus on:
- more original: Doubles down on franchises like Stranger Things, Squid Game, and Bridgerton.
- Licensed Content: Although they won’t own WBD, Netflix has already seen huge success in licensing HBO titles like Band of Brothers, Insecure, and Sex and the City. This “arms dealer” relationship is expected to continue with other studios, including Paramount, which recently announced a deal for a bunch of its high-profile TV shows during an earnings call.
- extended offer:Continuous promotions in live sports (like WWE Raw and NFL games) and Netflix games.
Of course, this story may take a few more turns before it’s all said and done… It won’t be over until it’s really over…
Are you disappointed that Netflix didn’t increase its bid to acquire Warner Bros.? Let us know in the comments.