Unexpected, huge, and decisive turn in one of the most media and politically significant business operations of recent times. After making a massive offer and doubling down under pressure, Netflix announced on Thursday that it is stepping back from its intentions to acquire Warner Bros. Discovery, a decision that completely clears the way for its major rival, David Ellison, son of magnate Larry Ellison (Oracle) and a friend and ally of President Donald Trump, to take over the historic studios.
"We have always been disciplined, and at the price required to match the latest offer from Paramount Skydance, the deal is no longer financially attractive, so we decline to match it," Netflix stated in a release. "This transaction was always a good purchase at the right price, not an 'obligation' at any price," they lamented.
In early December, the streaming giant announced the agreed purchase of Warner Bros. Discovery for nearly $83 billion, the largest acquisition in the entertainment sector since Disney bought Fox for $71 billion in 2019. With this move, expected to revolutionize the audiovisual sector for many reasons (a platform competing with cinemas leading the group), Netflix not only hoped to acquire one of the most powerful catalogs in the industry but also firmly establish itself in the television business through HBO Max.
However, the commotion caused by this announcement paled just three days later when Paramount, frustrated by the negotiation outcome, launched a hostile takeover bid of $108 billion to acquire the entire company, offering over $30 per share. Not only the mentioned services but also the part that includes historic channels like CNN, TNT, Food Network, HGTV, Discovery Channel, or TBS. The consequences of this offer, which has now succeeded after months of legal, business, and political battles, are enormous. Paramount is controlled by David Ellison, son of the Oracle founder, one of the wealthiest individuals on the planet and a personal friend and ally of Trump. Ellison is the founder of Skydance, a production company that in July acquired Paramount for $8 billion, taking control of the CBS network, as well as historic channels like MTV, Nickelodeon, Comedy Central.
In the US, there are five major national television networks, and until recently, only one was clearly politically aligned to the right. Fox, owned by Rupert Murdoch, has always been conservative and is now fully aligned with the president. After acquiring CBS, Ellison made significant editorial changes, merging with The Free Press, a media outlet created just a couple of years ago by journalist Bari Weiss, which has now taken on a fundamental role in the network. Since his arrival, significant figures have left, and there have been several complaints and lawsuits over editorial positions.
If Paramount also acquires CNN, three of the five networks will be in the hands of clear Trump allies, who have often threatened the other two, ABC and NBC, taking them to court and forcing them to pay millions of dollars for their presidential library after unusual complaints, both regarding their campaign coverage and the editing of an interview with Kamala Harris. The owners chose to pay rather than completely alienate the White House, which fully controls the regulator that can veto multibillion-dollar business deals.
The conclusion, at least for now, of all this chaos came today when Netflix announced that after careful consideration, they had decided not to increase their offer to counter the $111 billion bid presented earlier this week by Paramount Skydance, over $32 per share. "The deal is no longer financially attractive," said the streaming company. "This transaction was always a 'good acquisition' at the right price, not an 'obligation' at any price," explained Netflix's co-CEOs, Ted Sarandos and Greg Peters, in a statement, after Warner had given them four days to respond.
The operation is now in the hands of regulators, both in the US and Europe. Not only media regulators but also the Department of Justice, in case there is a dominant position contrary to the law. However, given the interest expressed by Donald Trump and his family (his son-in-law, Jared Kushner, even participated in Ellison's offer with one of his funds, although he later withdrew), it is unlikely that such a politically significant move will be blocked, giving Netflix the opportunity to try again. Sarandos himself, before withdrawing from the bidding, spent all of Thursday at the White House, speaking with administration officials and the Department of Justice. This was just 48 hours after Trump publicly asked him to remove a former senior Obama official from the board.
"We believe we would have been strong advocates for Warner Bros.' iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the United States," Sarandos declared yesterday.