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News Netflix to buy Warner Brothers

Owain Taggart said:
I think it would be more of an issue if there was too much overlap, like two big studios like WB and Paramount merging. Here we have a Streaming service merging with a big studio with a lot of history, and together they compliment each other in ways that I feel make some sense. Netflix as a Streaming service doesn't block out a lot of theatre space, in fact its theatre releases tend to be limited to few locations rather than wide releases.

I actually had more of an issue with Amazon buying up MGM.
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Amazon buying MGM created, IMO, the same potential issues with vertical integration and the negative impact on competition, which includes, but is not limited to theater space.

Vertical integration occurs when a company controls multiple stages of a supply chain, here combining upstream content creation (WBD's films, TV shows, and IP like DC Comics and HBO originals) with downstream distribution (Netflix's 280+ million global subscribers).

Post-merger, Netflix could:
  • Prioritize its platform for WBD content, sidelining competitors like Disney+, Amazon Prime, or Paramount+.
  • Leverage WBD's library to bolster subscriber retention, raising barriers for rivals seeking premium Hollywood titles.
  • Use data from streaming to influence production decisions, potentially excluding independent creators or smaller distributors.

This could reduce competition by limiting content availability across platforms, enabling predatory pricing , or enforcing exclusive deals—mirroring oil giants like Standard Oil, which the Supreme Court dismantled in 1911 for similar reasons.

The Paramount case targeted the "Big Five" studios (including Paramount, MGM, and Warner Bros. itself), which controlled ~70% of U.S. film production, distribution, and exhibition through owned theater chains. Key violations included:
  • lock booking: Forcing theaters to buy unwanted films bundled with hits, stifling independents.
  • Clearance and zoning: Restricting film releases to favor studio-owned theaters, creating geographic monopolies.
  • Vertical foreclosure: Owning production and theaters allowed studios to deny rivals access, leading to the court's decree to divest theaters and ban restrictive practices.
The ruling promoted a competitive market by separating production from exhibition, fostering independent theaters and filmmakers.

In today's digital equivalent, a Netflix-WBD merger could recreate these dynamics with the streaming services as the "theater space":
  • Content blocking: Netflix might withhold WBD titles from rivals, akin to block booking, reducing viewer choice and inflating costs for platforms without such libraries.
  • Market foreclosure: With Netflix at ~20% U.S. streaming share and WBD's vast IP, the combined entity could dominate ~30-40% of premium content, echoing Paramount's theater control and enabling algorithmic favoritism over independents.
  • Barriers to entry: Smaller streamers or traditional studios (e.g., Lionsgate) could face higher licensing fees or exclusion, much like pre-1948 independents squeezed out of exhibition.
 
Then he turns around this morning with a series of tweets blasting CBS/Paramount/Skydance for airing an interview with MTG critical of him on 60 Minutes last night, saying the new owners are just bad, if not worse, than Paramount.
 
deadline.com

Paramount Launches Hostile Takeover Offer For Warner Bros. Discovery

Paramount today announced it has commenced an all-cash tender offer to acquire all of the outstanding shares of Warner Bros. Discovery for $30.00 per share in cash.
deadline.com deadline.com

Deadline said:
The hostile offer, which takes the case directly and publicly to WBD shareholders, follows a contentious auction that saw the media giant headed by CEO David Zaslav reject successive bids from the David Ellison company and, last Friday, announce a deal with an equity value of $72 billion (enterprise value $82.7 billion enterprise value) to sell the Warner Bros. assets to Netflix for $27.75 a share in cash and stock.
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It's on ...

Deadline said:
WBD would first spin off its linear television business into a separate public company in Q3s of 2026. The would-be partners expect the Warner Bros. deal to take 12 to 18 months to close pending regulatory approval.
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It echoes Comcast spinning its cable networks off into a separate company called Versant. :shifty:
 
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the G-man said:
lock booking: Forcing theaters to buy unwanted films bundled with hits, stifling independents.
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This is off topic a bit, but, Block Booking was made illegal in 1948, yet Fox forced theaters to buy Star Wars by bundling it with "The Other Side of Midnight" does anyone know how that worked?
 
Gepard said:
I'm glad it wasn't anyone who already bought out another studio. Admittedly, it appeals to my sense of fairness; Disney already got Fox, Skydance Paramount, and Amazon MGM. Could you imagine if one of those guys got Warner? Netflix feels like the least-bad option.
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Exactly my thinking. And It's possible that by buying WBD, Netflix is hoping to get more into the physical space. The streaming landscape is changing quickly, and who's to know what it will look 5 years from now. But it's been quite clear from looking at some of the players that it's not something sustainable, not the golden goose that everyone's been chasing. And by being the first streamer, they likely have some advantage to be able to see the writing on the wall. By getting into the physical space, they would buy themselves some security should things shift enough that they have to have something to fall back on. If they have their eggs all in one basket on the other hand...


the G-man said:
Amazon buying MGM created, IMO, the same potential issues with vertical integration and the negative impact on competition, which includes, but is not limited to theater space.
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In some ways, maybe the issue is even worse with Amazon, given Amazon's business as a online retailer, which they can leverage to sell merchandise.

Despite the 1948 ruling, I still do think block booking happens in specific cases, or at least feels like it's happening when it comes to smaller markets. Like for instance, the Canadian market, unless you're in big urban centers, you have much less choice, and what will happen is you sometimes end up getting several Disney movies in theatres all at once leaving little room for the Indies. And then you have second-run theatres that look like they're picking up the scraps.

And yeah, I realize the danger in the vertical integration, but looking at the other options, they aren't any better. Whichever way it ends up going, I think consumers will end up losing out big time. They'll have to through the DOJ, but of course they somehow allowed the Microsoft/Activision-Blizzard merger to go through, and we're now seeing the effects of how bad that can be on the consumer.
 
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variety.com

Warner Bros. Discovery Says It Will ‘Carefully’ Review Paramount Skydance Acquisition Offer and Issue a Recommendation in 10 Business Days

Warner Bros. Discovery, responding to Paramount Skydance's unsolicited takeover offer to acquire all of WBD's outstanding stock for $30/share, said it will review the proposal and issue its decision within 10 business days.
variety.com variety.com

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www.hollywoodreporter.com

Ted Sarandos Says Paramount Takeover Bid for Warners Was “Entirely Expected … We Have a Deal Done”

The Netflix co-CEOs were interviewed hours after a hostile offer for Warner Bros. from Paramount. "We didn't buy this company to destroy that value," Sarandos adds.
www.hollywoodreporter.com www.hollywoodreporter.com

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One thing I don't often see mentioned is WB Games, and one of the potential scenarios I could see through the courts would be for them to divest themselves of the Games division as a condition for the deal to go through. Consider the fact that Netflix once invested in a AAA studio, then when things didn't quite go their way, they closed it and pivoted their focus to mobile games. But does anyone actually go to Netflix for games? That's the issue, I think, in that it feels like they've been chasing their elusive blue whale, putting tons of money into it and not seeing much in terms of results. So, it's my guess that they'll cast aside the WB's Games division in order to make the deal work.
 
They both apparently went to Trump to make their case, but yes, the Kushner & Middle East connections would be a major red flag for Paramount's takoever, but at the same time, it's likely the one to go through due to Kushner's connections. That would be a major conflict of interest and would be in no way impartial.

Btw, that very same group made a bid to buy Electronic Arts last month.
 
valkyrie013 said:
As long as streaming goes back to as few streamers as possible.. I'm ok with it.. Remember the times it was pretty much ONLY Netflix? for 10$?? Peperage farm remembers..
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having one central repository that everyone licences their content to is a solid system, but it'll never be that cheap again. Netflix was operating at a loss to build market share.
 
^ And I believe it still is. Streaming will never be sustainable in the long-term due to the costs involved, in maintenance, servers and content production. The problem started when studios wanted in, which should technically have been a golden scenario where studios could publish new content and also have a vault of older stuff. But the major problem with all that is that they had to kick production into overdrive creating more content in order to satisfy subscribers and investors. You then have a problem like Disney+ where many Star Wars TV series are created but many of them are considered average to bad at best, which has in turn diluted the IP, where before all this, Star Wars movies were considered events. And I think the turning point was when streaming services started selling off their content, sometimes before they've even had a chance to be streamed. Hence why we are now in a situation where a company like Netflix has made a bid for WBD.


And adding to my theory of Netflix possibly divesting themselves of WB Games is this: Apparently the price of WB Games wasn't even factored into the bid because Netflix considers them worthless and relatively minor in the grand scheme of things. Given their past failures with gaming, that's understandable and they might not want to get into that again.

The other side of the coin is that perhaps WB could convince them that Netflix's games division could be run by WB Games, ie those with actual experience in the games industry.

kotaku.com

Netflix Considers Warner Bros. Games To Be Worthless

The entire gaming division behind Hogwarts Legacy and the Arkham franchise wasn't even factored into the price of Netflix's bid
kotaku.com kotaku.com
 
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According to the filing by Paramount to block the merger, the Ellison's met with Zaslav on September 14th with an initial offer of $19 a share to buy Warner Bros-Discovery.

They met again on November 24th and offered $30 plus co-CEO/co-Chairman of the Board, plus a contract to sign.

Zaslav said he would think about it; then on December 4th announced the sale to Netflix.

The Ellison's are saying that the sale contract was written up and all Zaslav had to do was sign it; therefore the sale to Netflix should be rendered null and void.
 
DarrenTR1970 said:
According to the filing by Paramount to block the merger, the Ellison's met with Zaslav on September 14th with an initial offer of $19 a share to buy Warner Bros-Discovery.

They met again on November 24th and offered $30 plus co-CEO/co-Chairman of the Board, plus a contract to sign.

Zaslav said he would think about it; then on December 4th announced the sale to Netflix.

The Ellison's are saying that the sale contract was written up and all Zaslav had to do was sign it; therefore the sale to Netflix should be rendered null and void.
Click to expand...
But... he didn't sign it. They did not sell to Paramount, so why would it invalidate the sale to Netflix? What the hell am I missing here?
 
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I mean, if there were no other bidders, then yeah, I'd argue against selling to Netflix as well, but selling to Paramount/Skydance or Universal would be just as contentious, if not more so. But, yeah, Ellison is employing scare tactics, but those are transparent AF.
 
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