Paramount challenges Netflix with hostile takeover bid for Warner Bros.

Paramount has launched a $108.4 billion (about $150 billion Canadian) hostile takeover bid for Warner Bros. Discovery (WBD), directly challenging Netflix’s recently announced plans to acquire the entertainment giant.

In a press release, Paramount said Netflix’s $82.7 billion (about $114.5 billion Canadian) is of “inferior” value to WBD shareholders, arguing it would lead to a “prolonged multi-jurisdictional regulatory clearance process with an uncertain outcome.” Paramount says its offer presents “a safer and faster path to completion” for WBD. It also says it wants to buy all of WBD, including its Global Networks business, which houses news and sports brands such as cnn and Discovery, while Netflix is ​​only interested in WBD’s film and streaming divisions.

Of course, there are reasons to be apprehensive about any of these measures beyond the general disdain for consolidation. With Netflix, there is concern about the future of the already rocky theater business. While Netflix has said it will honor existing agreements for WBD theatrical releases, it says it intends for these windows to “evolve” to become more “consumer-friendly.” To date, the company has only released films in theaters long enough to be eligible for awards such as the Oscars. People are also not optimistic about Netflix’s commitment to the theatrical business, given that co-CEO Ted Sarandos He previously described the theater model as “obsolete.”

Meanwhile, Paramount is under scrutiny due to owner David Ellison’s close ties to Donald Trump. For example, he recently made headlines for give the green light to prolonged gestation rush hour 4 simply because Trump asked him to. Affinity Partners, the holding company of the US president’s son-in-law, Jared Kushner, is also part of Paramount’s bid for WBD. And this is not to mention that the sovereign wealth funds of Saudi Arabia (a regime that is known for human rights issues such as the murder of journalist Jamal Khashoggi – are supporting Paramount’s move.

It remains to be seen what will result from Netflix and Paramount’s respective bids for WBD. Naturally, either company will face intense regulatory scrutiny. Trump, for his part, said it will participate in the approval of the sale of WBDnoting that “it could be a problem” if Netflix acquires the company due to the market share it would have then.

Image credit: Paramount

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