- Netflix has abandoned its plans to buy Warner Bros. Discovery
- This comes after Paramount made WBD a “superior offer”
- And after Donald Trump threatened Netflix over one of its board members
Netflix has given in to Paramount in the duo’s fight to purchase Warner Bros. Discovery. It’s a twist that no one expected.
Many had believed that after WBD’s board of directors declared that Paramount’s newly revised $31 per share offer was “superior” to what Netflix had on the table, Netflix would take advantage of the four-day window it had to revise its offer to come back with an even higher offer. Instead, he withdrew completely.
This means that Paramount is ready to buy Warner Bros. Discovery, that is, unless it is blocked by regulators (more on that in a moment).
It is impossible to ignore the political side of this.
Netflix’s departure from the negotiating table comes just days after US President Donald Trump demanded that he fire former US national security adviser Susan Rice from his board of directors or “pay the consequences” if she decided not to, a comment that cannot help but be interpreted as a threat to block a Netflix deal with the WBD, especially after Trump had previously said he wanted to have an unprecedented level of involvement in the negotiation.
At the same time, there is Paramount’s strong connection to the Trump-friendly Ellison family. David Ellison is the CEO of Paramount Skydance, and his father, Larry, is putting up some of the cash in Paramount’s bid to buy WBD and is also involved in US-owned TikTok.
His alliance with Trump goes beyond simply being friendly to the president, from the cancellation of Stephen Colbert’s The Late Show apparently at the request of Trump – who is a vocal critic of Colbert and other popular late-night hosts – to a sense of erosion of CBS News’ impartiality as executives cut segments critical of the administration’s actions, while promoting programming aligned with the agenda of the administration and its allies.
Watchdog groups fear similar steps could be taken with WBD’s CNN once Paramount is in charge. “The Ellisons have already promised the Trump administration that if they get the chance, they will make sweeping changes at CNN, and we know what that means: firing journalists, breaking big stories, and replacing the news with empty propaganda,” says Free Press co-CEO Craig Aaron (via Variety).
Meanwhile, Variety reports that a Warner Bros. executive called the result a “gut punch,” suggesting that even WBD’s top brass expected a Netflix victory.
Hollywood drama will return
All that said, it’s still not a done deal.
Paramount’s ties to Trump suggest some US regulators could approve the deal. However, California Attorney General Rob Bonta has said that the California Department of Justice will investigate and review the deal, and that non-U.S. boards such as the EU may also encounter problems with the merger.
Paramount and Warner Bros. make up massive parts of the film industry, as does Netflix, and any deal here would come under intense scrutiny from regulators.
So we’ll have to continue to watch this space. Even though Netflix has pulled out, that doesn’t mean this Hollywood drama has come to an end. This is simply the end of Act 1.
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