US media industry
What’s behind the Takeover battle around Warner
Netflix wants to buy Warner Bros., Paramount is making a hostile counteroffer – the fight for the Hollywood studio is not just about a lot of money and market power. Politics and cultural concerns come into play.
On Friday, Netflix boss Ted Sarandos welcomed Warner Bros. Discovery. Warner and Netflix have agreed, it said. The deal: Netflix will pay a total of $82 billion for parts of the Warner Bros. Discovery group. Netflix buys the TV and film studios and the valuable rights to many of the most famous TV series such as The White Lotus or The Sopranos as well as to films such as Casablanca or the Batman and Harry Potter series.
On Monday, Paramount followed suit with a new offer and announced it would pay $108 billion. They want to “finish what we started,” said Paramount boss David Ellison on CNBC. He addressed Warner Bros. Discovery shareholders directly – a so-called “hostile takeover bid” that involved more cash than Netflix’s offer.
Sovereign wealth funds in the background
The offer will also be financed by investment funds from Saudi Arabia and Qatar. Jared Kushner’s company is also said to be involved; he is the son-in-law of US President Donald Trump.
David Ellison and his father Larry have close ties to Trump. Paramount’s own streaming service, Paramount Plus, is significantly smaller than the competition from Netflix, Amazon or Disney Plus. With the takeover of Warner’s HBO Max service, Paramount Plus would suddenly become competitive.
Hundreds of millions of customers
If Netflix takes over Warner Bros.’s streaming service, it would create a platform with over 400 million customers. It is normal for competition authorities to review a takeover of this size.
“I have serious doubts that the deal will go through,” said Republican Sen. Mike Lee of Utah. “That would be a lot of market concentration. I see about seven warning flags in this deal.”
What will become of CNN?
Netflix doesn’t want to take over TV channels like CNN. They should be spun off into their own company. Paramount’s offer applies to the entire Warner Bros. group, including CNN.
The news channel regularly reports critically about the US government. According to media reports, David Ellison is said to have promised Donald Trump that he would comprehensively change CNN if his Paramount company took over Warner.
The White House declined to comment. Trump said of the Netflix offer: “That would be a lot of market share, we’ll have to see what happens.” He will be involved in the decision. He has not publicly supported Netflix or Paramount.
“A film should be made for the cinema”
Hollywood actors, writers and directors fear that a takeover could result in many job cuts at Warner Bros. Another concern: If Netflix prevails, films could be shown in cinemas for a shorter time or not at all, but instead come to streaming platforms more quickly.
“They let the film run in the cinema for a week or ten days so that they have a chance at Oscars – that’s it,” said star director James Cameron in a podcast. “That’s lazy. A film should be made as a film for the cinema.”
Warner Bros. Studios is over 110 years old. With Netflix, a pure streaming provider would take over – a tech company. Silicon Valley journalist Kara Swisher said on her podcast: “Hollywood – buckle up. This is a huge change and just the beginning. You’ve had a long time to change and you haven’t used it.”
