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Netflix has reportedly won a bidding war for Warner Bros. Discovery, and it will now enter exclusive talks over a final deal. They beat Paramount and Comcast to provide an offer of reportedly around $30 per share.
Warner Bros. Discovery previously received three different offers from Paramount in October this year. Netflix is looking to acquire Warner Bros. Studios and HBO Max, which Comcast also bid for. Paramount, meanwhile, looked to acquire the entire WBD.
As per Deadline, the major streaming platform won the bidding war this week and will now enter exclusive talks. However, it's important to note that a deal hasn't been finalized yet. Meanwhile, David Ellison's Paramount has raised questions about the bidding and WBD potentially choosing to work with Netflix or Comcast.
Ellison's company wrote multiple detailed letters to claim that the other two offers “present serious issues that no regulator will be able to ignore.” In a letter released on December 1, the company's attorneys from Latham & Watkins and Cravath wrote:
“While a proposed Paramount/WBD transaction would be pro-competitive and likely have a favorable and relatively smooth approval process by regulators, a transaction with either Netflix or Comcast would face grave uncertainty and significant opposition by competition law enforcement agencies in the U.S. and abroad.”
Paramount was also seen as the frontrunner to acquire Warner Bros. Discovery following their recent deals with the White House.
A leaked letter from Paramount claims Warner Bros. Discovery bid is “a tilted and unfair process”, slams company's CEO
As per Deadline, a leaked letter from David Ellison's company appeared to take aim at WBD CEO David Zaslav. It claimed,
“Sales process has been tainted by management conflicts, including certain members of management’s potential personal interests in post-transaction roles and compensation as a result of the economic incentives embedded in recent amendments to employment arrangements.”
Zaslav was set to get a role if Paramount had closed the deal with Warner Bros. Discovery. Warner Bros. would have slimmed down after a potential merger, and Zaslav would've been its CEO. It's unclear what his role would be if Netflix closes the deal instead.
Meanwhile, Paramount's letter also rued a potential lack of competition if Netflix wins the bidding war, as it stated:
“Netflix dominates Streaming Video On Demand in the U.S., Europe, and globally. WBD has positioned HBO Max as an important challenger to Netflix’s SVOD dominance, particularly in Europe. Regulators around the world will rightfully scrutinize the loss of competition to the dominant Netflix streamer and any Netflix-WBD deal’s impact on both streaming customers and content creators in each of these jurisdictions.”
It also took aim at the other competitor, Comcast, writing:
"Comcast’s presence as a leading broadband and MVPD player also presents antitrust and other regulatory concerns, potentially limiting access, raising prices, or otherwise negatively affecting consumers."
Regardless, Netflix has now won the bidding war and will look to close the deal. A potential acquisition will give it access to the likes of DC Comics, Harry Potter, Hanna-Barbera, and other WBD library properties.
