It wasn't that long ago that Netflix's acquisition of Warner Bros. Discovery felt like a done deal. Paramount Skydance kept trying, however, and amidst all the threats of legal action and snarky comments thrown both ways, it appears that Netflix is surprisingly officially throwing in the towel.
Netflix heads Ted Sarandos and Greg Peters issued a joint statement amidst news that WBD was given a significantly more attractive offer by Paramount Skydance. Variety shared the statement, which seemingly all but confirmed WBD originals won't be available with a Netflix subscription in the near future:
The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid. Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process. We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.
Ted Sarandos publicly said just days ago that if Paramount Skydance wants to acquire WBD, they need to make a better offer rather than try to circumvent the process through other tactics. It seems as though someone there got the memo, and it was such a big offer that Netflix had no choice but to back out of the race rather than up the number once again.
Reading between the lines, it sounds like Netflix's team believes that Paramount Skydance is planning to overpay for Warner Bros. Discovery. Of course, Paramount Skydance likely has people on their end crunching numbers as well, and the acquisition seems likely now. Netflix's statement continued, perhaps to give shareholders an idea of what its plans are now that it won't be acquiring Warner Bros. Discovery, or its extensive library of shows and films:
Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertaining offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program. We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.
Based on that, it sounds like the focus will be to put more money into upcoming Netflix shows and movies and continue to work with big directors and actors to bring more original content to the platform. It sounds like a solid strategy, if not the only other strategy without another major studio on the market to acquire.
While Netflix subscribers may be bummed the deal is not going through, there were notable critics of the acquisition of Warner Bros. Discovery that may be happy to hear it's no longer planning to make a play for the studio. Director Christopher Nolan was one person against the deal, saying it would be "a huge blow" to the film industry.
Talks about Paramount Skydance acquiring Warner Bros. Discovery have gone back for a couple of years, and there's no immediate understanding about how it would work. It may be something that both parties have yet to fully understand themselves, and we won't see how it shakes out until they're officially merged. Personally, I'm just excited for the possibility of a giant crossover between the DC Universe and Star Trek, but who knows how or if that'll happen.
While not official, it appears that Paramount Skydance will officially acquire Warner Bros Discovery in the near future. Keep with CinemaBlend for more updates when they're available, as well as other unexpected twists in this story.
