Netflix to Buy Warner Brothers? No, Paramount Skydance!

[hearthesilence]

I feel worse about the film side—there were going to be layoffs no matter who won the bidding, but I was convinced (as supposedly were most WB employees) that Netflix would leave the studio more intact than Paramount...

This absolutely would've happened simply because Netflix doesn't really have a studio in the same sense as Warner Bros., Paramount, etc. in terms of the physical facilities and the departments operating within. Not the case with Paramount buying WB, where the redundancy that often comes with mergers would be far greater.

[Lowry_Sam]

This absolutely would've happened simply because Netflix doesn't really have a studio in the same sense as Warner Bros., Paramount, etc. in terms of the physical facilities and the departments operating within. Not the case with Paramount buying WB, where the redundancy that often comes with mergers would be far greater.

Which is why the Paramount deal should be considered the most problematic legally in terms of monopoly/conflicts of interest. I know that Antitrust has been whiddled away over the years & powers that be have only been arguing it when it suits their interests. However many were trying to argue the reverse (that Netflix had the bigger problem in this regard) when it's obviously not true. Seems that those at WB who don't want the Paramount to go through should be making a greater stink (if in fact there are any at this point).

[The Fanciful Norwegian]

Netflix also would've kept more of the distribution side of WB, since Netflix's current theatrical operations are way too bare-bones to cope with the additional output. It's not very plausible that Netflix would've just four-walled WB titles for fixed-length runs, at least not in the near term. We never learned much (if anything) about Netflix's plans for WBD's physical media operations, but I'm also not convinced they would've simply shut down the Home Entertainment division.

[Walter Kurtz]

Paramount Won.

[beamish14]

Paramount Won.

We lost

[Lowry_Sam]

To be more accurate, news is saying Netflix withdrew after Paramount bid 111B, as some had predicted. So do we have to boycott WB now or do we go on a spending spree?

[hearthesilence]

A boycott wouldn't do shit. We're fucked.

[Lowry_Sam]

Investor Business Daily on the details

[Matt]

So do we have to boycott WB now or do we go on a spending spree?

Spending spree now, boycott once the deal closes.

I wouldn't be surprised to see an exodus of filmmakers from Warner Bros., especially if Pamela Abdy and Michael De Luca are removed as heads of the Warner Bros. Motion Picture division. They were crucial to getting big gambles like Sinners, One Battle After Another, "Wuthering Heights", and The Bride made, and I can't see Paramount Skydance doing anything close to that. Warner Bros. already lost Christopher Nolan to Universal, so maybe they will position themselves as the auteur-friendly big studio in the near future.

Poor Tom Cruise, who jumped ship from Paramount to Warner Bros. and will now be right back where he started even before his first project comes out.

[beamish14]

So do we have to boycott WB now or do we go on a spending spree?

Spending spree now, boycott once the deal closes.

I wouldn't be surprised to see an exodus of filmmakers from Warner Bros., especially if Pamela Abdy and Michael De Luca are removed as heads of the Warner Bros. Motion Picture division. They were crucial to getting big gambles like Sinners, One Battle After Another, "Wuthering Heights", and The Bride made, and I can't see Paramount Skydance doing anything close to that. Warner Bros. already lost Christopher Nolan to Universal, so maybe they will position themselves as the auteur-friendly big studio in the near future.

Poor Tom Cruise, who jumped ship from Paramount to Warner Bros. and will now be right back where he started even before his first project comes out.

He briefly co-ran United Artists with former agent Paula Wagner, so maybe he’ll go to Amazon. Republican supporter Jerry Bruckheimer is probably thrilled

[Lowry_Sam]

It also occurs to me (with Netflix's quick retraction without much fanfare) that Netflix could also be playing a long game and hoping this deal will bankrupt Paramount & then it can get both Paramount's & Warner's catalog at a bargain basement price sometime in the not too distant future.

[swo17]

I wish the thread title could include this emoji

[Finch]

CA's Attorney General Bonta's office put out this statement: "Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review"

[captveg]

It also occurs to me (with Netflix's quick retraction without much fanfare) that Netflix could also be playing a long game and hoping this deal will bankrupt Paramount & then it can get both Paramount's & Warner's catalog at a bargain basement price sometime in the not too distant future.

With how forward thinking Netflix has been historically it certainly wouldn't shock me.

If anyone has any brains whatsoever at Paramount they'll keep the people & programs behind Warner Archive and TCM, even if under different names. Merging Paramount and Warner Home Video, on the other hand, probably wouldn't change much for collectors seeing how many titles are licensed by both companies to 3rd parties now.

[dx23]

Usually a deal like this takes about a year-year and half to close. Only way out now is if Dems take definite power in the House and Senate (enough votes to not have assholes like Fetterman take the party hostage) and they put anti-trust mechanisms in motion to not only stop this, but prevent from happening in the future.There's the Sherman Antitrust Act that's supposed to prevent things like this from happening, but they need to be updated to the 21st century loophole thinking assholian corporate world. If not, basically all media with be right wing state run partisan bullshit.

Don't know exactly how laws work in other countries but I've seen in the past the EU strike down companies who engage in this type of monopolistic bullshit from doing business there. Apple, Twitter and other recent companies have been subjected to ruling over there that have affected how their business is run worldwide, for example, when it came about Apple pushing proprietary tech like lighting cables. Apple as well as other tech companies were forced to adapt their tech to USB-C among other things.

Either way, if this merger doesn't kill us, AI will and like this comic says

Spoiler

[The Fanciful Norwegian]

There's zero chance Democrats would be able to put together a veto-proof majority for something like that. As for the EU, nobody seems terribly confident that the merger will be blocked outright, but I don't think the political implications of a Paramount deal have really sunk in for everyone. Still, if I had to guess, I'd say the EU will let it go through with some concessions.

[The Elegant Dandy Fop]

Did the film industry feel this grim in the seventies when a Casino magnate bought MGM and an oil company bought Paramount? This doesn’t leave much hope that the industry is going to improve post-COVID in both output or jobs, especially when Paramount just hired a literal rapist to write a new action figure movie.

[swo17]

Rapist looks good on a resume these days

[onedimension]

We haven’t entered the mid game of this chess match yet, when Netflix and Paramount go through back channels to negotiate Trump family media deals. How about a Barron documentary for Paramount Plus? Or will Netflix give Donald Jr. a talk show? That’s a nice video podcast Amy
Poehler has going on your platform, Mr. Sarandos.

[Captain Paranoia]

Then again, same studio is rehabilitating Brett Ratner to release Rush Hour 4. (his follow up to the financial explosion that was Melania)

[Finch]

From Forbes

What The Paramount-Warner Bros. Merger Means For Larry Ellison’s Fortune
By Forbes estimates, the elder Ellison, who is also Oracle’s largest shareholder, doesn’t have enough cash on hand to fulfill his part of Paramount’s $111 billion offer for Warner Bros. Discovery. Here’s how it could play out.

If regulators clear it, one of the largest mergers in history will hand billionaire Larry Ellison and his son David unprecedented sway over American media—CBS and CNN under one roof, HBO Max and Paramount+ fused, Warner Bros. and Paramount Pictures sharing a parent. That’s on top of the tech and real estate empire the elder Ellison—Oracle’s chief technology officer, President Donald Trump’s new neighbor and the world’s sixth-richest person—already controls.

Last August, the Ellisons took control of Paramount in an $8 billion merger with Skydance, the entertainment company run by David and owned mostly by Larry. Weeks later, Paramount Skydance lobbed a hostile $111 billion bid for Warner Bros. Discovery, which had already agreed to sell itself to Netflix. Netflix declined to counter. Warner’s board deemed Paramount’s offer superior. The Ellison-controlled entity is now in pole position to buy a company with a roughly $70 billion market cap—for a triple-digit billion price.

Here’s the problem: Paramount has just $3 billion in cash on its balance sheet.

To bridge the gap, three big banks are committing $57.5 billion in debt. Most of the rest—a $45.7 billion equity commitment—is coming from Larry Ellison’s trust. And that's where the math starts to get tight. Ellison has only sold $4.7 billion of Oracle stock (pre-tax) this century. By Forbes estimates, he has less than $10 billion of cash in the bank, mostly from Oracle dividends. He also owns an estimated $15 billion in Tesla shares amassed during his tenure as a Tesla director, which ended in 2022. Even if he liquidated all of that, it wouldn’t fully cover his commitment.

Which leaves the longest, most valuable lever: Oracle stock.

Ellison owns 1.16 billion Oracle shares, currently worth $164 billion. Selling off a meaningful chunk would almost certainly spook Oracle shareholders already queasy over Oracle’s heavy debt load and skyrocketing spending on AI data centers. Big insider sales tend to land like jump scares.

According to a September regulatory filing, Ellison had 346 million pledged Oracle shares “to fund outside personal business ventures.” They were worth more than $100 billion then and about $50 billion now. Even at the lower end, that’s enough to cover Ellison’s commitment without him selling a single Oracle share and triggering a selloff. No need to sell the crown jewels if you can mortgage them instead.

For an 81-year-old tech founder who once seemed to be drifting towards retirement on Lanai, the pivot to media mogul seems abrupt. But Ellison has a well earned reputation as mercurial and has rarely played the expected move.

“We’ve always gone against convention,” Ellison told Forbes in 1993. “[Convention] is like playing chess and being black and always copying white’s moves. What a sure-fire way to lose!”

A better alternative: flip the board.

Should the deal be approved, the combined company would consolidate legacy rivals across news, film streaming and kids programming—CBS and CNN; HBO Max and Paramount+; Warner Bros. and Paramount Pictures; and Nickelodeon and Cartoon Network all under the same parent company. Typically, that would lead to heavy antitrust scrutiny from the Department of Justice and Federal Communications Commission. But the Ellisons’ chummy relationship with the Trump administration could be a ward against regulators’ attempts to shut down the merger.

And media would become just one pillar of an already sprawling empire. Larry Ellison owns more than 40% of Oracle, which in turn owns 15% of TikTok’s U.S. entity via a government-brokered deal. Ellison also has a $3 billion real estate portfolio, including $500 million in Florida property and an entire Hawaii island, as well as an estimated $2 billion stake in Elon Musk’s merged SpaceX-xAI entity.

The Warner deal would tower over it all. Oracle has acquired more than 150 companies, many via debt-heavy deals, but its largest to date—buying healthtech firm Cerner for $28 billion in 2022—looks modest beside an $111 billion media rollup.

The deal would make Ellison much more powerful, but if financed by stock sales rather than pledges, could hurt his fortune before it helps. More details are set to emerge in the coming days. But in general, large mergers, especially those that come with a heavy debt burden, can rattle markets and drive the acquiring company’s stock price down. Oracle’s three most notable acquisitions—Cerner, NetSuite in 2016 and PeopleSoft in 2005—didn’t help the tech giant’s stock price in the short term, but paid off months or years later. Paramount’s share price fell by half in the months after the Ellisons took over (although it’s up 20% as of today on news of the Warner Bros. bid, adding some $1.8 billion to Larry Ellison’s net worth). But even if Paramount buys a company more than five times its size, it will take a while to pay off all of the debt it’s taking on and allow its market value to catch up.

[jedgeco]

We haven’t entered the mid game of this chess match yet, when Netflix and Paramount go through back channels to negotiate Trump family media deals.

Nah, Netflix only has until Tuesday to raise its bid (which it has said it won't do), and after that the Paramount deal is locked up.