Netflixhas finally broken its silence after a shocking twist in the battle to acquire Warner Bros. Discovery and its assets.
In December, Netflix announced it had reached a deal to buy Warner Bros.’ studios and HBO Max, with multiple press releases announcing the exciting merger. However, Paramount Skydance and its CEO, David Ellison, were hot on their tails in what felt like a never-ending pursuit to outbid Netflix, and ultimately, it led to Paramount winning the battle.
In an interview with Bloomberg, Netflix’s co-CEO Ted Sarandos revealed why he quit the race to acquire WBD after Paramount upped its bid. WBD revealed that Paramount had upped its bid and gave Netflix four days to respond, but the streaming giant dropped out of the bidding war, causing a shock throughout Hollywood. It wasn’t clear to anyone who they wanted to win.
“We had a very tight range that we’d be willing to pay and made that offer back when we closed this deal. We hadn’t moved much from that, except for moving to cash, which served to move the deal faster. I’m happy where we got in and happy where we got out.
We knew right away, when we got the notice on Thursday that they had a superior offer and the details of that deal. We knew exactly what we were gonna do.”
Paramount’s new deal with WBD is causing lots of speculation as it was revealed that the company would be borrowing tens of billions of dollars to acquire the media entity, which Sarandos claims would require Ellison to cut $16 billion in costs to avoid debt, including eliminating thousands of jobs. Paramount had to pay $2.8 billion to Netflix for its new deal, as the original merger had been canceled.
When asked if Paramount’s new merger should be approved, Sarandos stated, “It should be highly scrutinized, the way I’m glad that ours was highly scrutinized. It should be looked at with every bit of the same microscope. Remember, we were asked to go and testify. David and I both were. I came.” The new offer from Paramount was $31 per share, which wasn’t a significant leap. However, Sarandos felt he was dealing with an irrational buyer in Ellison:
“Unusual, yeah, unusual, irrational, whatever words you want to use in that. It’ll be fascinating to see the next steps. I have been on the record a lot in the last two weeks talking about what I think the future looks like. I’m confident in our future that we’re not impacted by all that. In fact, maybe it’s to our advantage. But I hope I’m wrong for the sake of the industry.”
It isn’t all doom and gloom for Netflix’s co-CEO, as he hints that this isn’t the last time WBD could be up for sale. When asked if the asset may or may not come up again soon, Sarandos added, “Possibly. Or if you look at the history of Warner Bros….”
