- Netflix has abandoned 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 conceded to Paramount in the duo’s fight over the purchase of Warner Bros. Discovery. It’s a twist no one was expecting.
Many had believed that after the WBD board declared Paramount’s newly revised $31 per share offer to be “superior” to what Netflix had on the table, Netflix would take the four-day window it had to revise its offer to return with an even higher bid. Instead, it pulled out entirely.
This means that Paramount is set to purchase Warner Bros. Discovery, that is, unless it is blocked by regulators – more on that in a moment.
It’s impossible to ignore the political side of this.
Netflix’s exit from the negotiation table comes just days after US President Donald Trump demanded it fire former US national security adviser Susan Rice from its board, or “pay the consequences” if it chose not to – a comment that you can’t help but interpret as a threat to block a Netflix WBD deal, especially after Trump had previously said he wanted to have an unprecedented level of involvement in the negotiation.
At the same time, you have Paramount’s strong connection to the Trump-friendly Ellison family. David Ellison is the chief executive of Paramount Skydance, and his father Larry is stumping up some of the cash in Paramount’s bid to buy WBD and is also involved in the US-owned TikTok.
Their Trump allyship goes beyond simply being friendly with the president, from the cancellation of Stephen Colbert’s The Late Show seemingly 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 execs cut segments critical of the administration’s actions, while promoting programming aligned with the administration’s agenda and allies.
Watchdog groups fear similar action may be taken with WBD’s CNN once Paramount is in charge. “The Ellisons have already promised the Trump administration that they’ll make sweeping changes to CNN given the chance, and we know what that means: firing journalists, spiking important stories, and replacing the news with empty propaganda,” says Free Press co-CEO Craig Aaron (via Variety).
Meanwhile, Variety reports one exec inside Warner Bros. has called the result a “gut punch,” suggesting even higher-ups at WBD were hoping for a Netflix win.
Hollywood drama will return
All of that said, this is still not a done deal.
Paramount’s Trump ties suggest some US regulators may rubber-stamp the deal. However, California Attorney General Rob Bonta has said that the California Department of Justice will investigate and review the deal, and non-US boards like the EU may also find issues with the merger.
Paramount and Warner Bros. make up massive parts of the film industry, as does Netflix, and any deal here would be heavily scrutinized by regulators.
So we’ll have to continue to watch this space. Even though Netflix has bowed out, that doesn’t mean this Hollywood drama has reached its conclusion. This is merely the end of Act 1.
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