Warner Bros Discovery might have to take David Ellison’s barely sweetened offer for the media giant, after all, The Post has learned.
As we reported last week, the firm known as WBD that controls that iconic Warner Bros. studio, HBO Max streaming service and cable properties like CNN and Discovery has been under massive pressure to reopen the entire bidding process and consider a “sweetened” offer from Paramount Skydance.
That, in turn, could upend its nearly sealed, $72 billion deal with Netflix for the studio and streaming service and force it to reconsider the bid by Paramount for all its operations.
Its decision is expected imminently, people close to the matter say. If WBD does reopen the process, it will have less to do with the recent barely enhanced offer by Paramount — where it didn’t increase its all cash $78 billion bid other than agreeing to cover a breakup fee to walk away from Netflix.
More at issue, as previously reported by The Post, is the guarantee of intense regulatory pushback by the antitrust cops in the Trump administration – not just on the deal itself, where Netflix is layering the top streaming service with the No 3 largest in HBO Max, but also scrutiny coming down hard on Netflix itself.
According to one GOP operative with knowledge of the Trump administration position of the Netflix deal: “So far it’s going nowhere with the executive branch.”
The tenor or the regulatory pushback against the Netflix offer — just weeks before WBD shareholders are expected to vote on it — has rattled people inside WBD. Its deal savvy CEO David Zaslav launched the months-long bidding process before settling on Netflix and getting a tremendous boost in WBD’s stock. But in recent days amid the regulatory heat, he’s been looking at a plan-B.
He is said to holding out hope for Paramount – backed by the CEO David Ellison, his mega billionaire father and Oracle co founder Larry Ellison and Redbird Capital – to add a couple more dollars to their $30 a share offer, bringing to total package to above $85 billion and well surpassing anything that Netflix could offer beyond its $27.75 a share, all-cash bid that relies on the uncertain value of selling WBD’s cable properties.
Netflix will have a chance to match any Paramount bid if the deal is reopened by the board this week. But its deal is already heavily reliant on debt and its stock price has tanked during the bidding drama so its appetite to throw money at its $73 billion offer is unclear.
Reps for WBD and Netflix had no immediate comment.
People inside the Ellison camp say as of Sunday night they have received no word from WBD on reopening the process. There is some feeling that WBD is leaking news it might just to protect itself from potential litigation — Paramount has already sued the company stating that it’s ignoring its superior offer because of a friendship between Zaslav and Sarandos.
But such a ploy to merely check the boxes is running into the reality of the regulatory mountain Netflix faces. Any review by DOJ antitrust would take six months and maybe longer now that the agency’s chief Gail Slater resigned amid pressure inside the White House.
If the DOJ rejects the deal and Netflix litigates to get its approval that could take another year of uncertainty.
As reported, the DOJ antitrust is looking at whether Netflix business itself represents a streaming monopoly, giving the company immense pricing power in an increasingly popular mode of entertainment for the US consumer.
Netflix has argued it isn’t close to a monopoly since it has intense competition from social media like YouTube, where millions of Americans including young people enjoy programming. That argument is facing an uphill battle with DOJ antitrust as word go the regulatory hurdles faced by the streaming giant grew more intense in recent days.
Meanwhile, powerful GOP lawmakers worry not just about Netflix’s market power but its power over the culture; during a recent Senate subcommittee hearing on antitrust they lashed out at Netflix CEO Ted Sarandos for pushing woke programming on the American public, that supported progressive causes such as transgenderism, as well as the left-wing political causes supporter by Netflix founder Reed Hastings.
Yet another reason why WBD might just find it easier to take the money from the Ellison and run.
