In early December, Paramount seemed to have lost to Netflix in a bidding war to purchase Warner Bros. Discovery (WBD), but 10 weeks and roughly $20 billion later, the conglomerate reportedly will get its way after all. On Thursday, as The Wrap reports, Netflix announced it will abandon its efforts in the face of Paramount's hostile takeover bid, leaving Paramount and the Ellison family in possession of a massive swath of American cultural production and free to make it as poisonous as they please.
WBD started walking down this road when it announced plans to unbuckle the two halves of its business from each other last summer. In this the venerable entertainment company was simply following Comcast's lead, and not really intending to sell either its movie studio and streaming businesses or its cash-generating yet debt-saddled TV "global networks business"—but once the Ellison family bought Paramount, the WBD board clearly saw an opportunity to get a little bidding war going, and put a big For Sale sign out on the front lawn. WBD's board initially went with Netflix's proposal despite the streaming giant offering less cash than Paramount, because Netflix had agreed to buy only the streaming stuff whereas Paramount wanted everything. Netflix agreed to pay $72 billion, or $27.75 per share, yet WBD's internal math reportedly valued the bid at closer to $31–32 per share, since WBD shareholders would get to hold onto some equity.
Paramount wanted to pay cash for everything, and offered $30 per share at the launch of its hostile takeover. In its appeal to WBD shareholders, Paramount said the Netflix deal "offers inferior and uncertain value and exposes WBD shareholders to a protracted multi-jurisdictional regulatory clearance process." This was less a friendly warning than a threat. What it meant was: The Ellison family's close personal friend Donald Trump is not going to let this deal through.
Last Tuesday, Netflix gave WBD its approval to start talking to Paramount, and Paramount quickly bumped its offer to $31 per share, or $111 billion. On Thursday, the WBD board reportedly told Netflix's people that actually they really liked Paramount's new offer, and gave Netflix four days to increase its once-successful bid. Netflix almost instantly said no. "This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price," Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement.
The only uncertainty now is whether this deal will be approved. U.S. regulators have to sign off on any merger of this size, though, again, the people in charge of doing so are all pot-committed extremists who conceive of their jobs as using the might of the federal government to punish non-Trump-polarized voices. Federal Communications Commission head Brendan Carr was most recently heard on stage at a Semafor event singing CBS News editor-in-chief Bari Weiss's praises, as if she were a colleague. His ass is not saying no to something like this.
The slightly trickier question is what will happen in Europe. The E.U. too has to sign off, and unlike the U.S., the aegis of Europe's regulatory apparatus is to, well, regulate, and not to etch the 14 words into bedrock. Larry Ellison has been on a goodwill tour across Europe, meeting with French president Emmanuel Macron and penning an open letter promising to produce at least 30 movies per year and put them in theaters. When taken alongside the European Union's hesitancy over subscription prices and monopoly control, that could work.
This deal is great for WBD shareholders and bad for pretty much everyone else. After taking over Paramount last year, the Ellisons installed Bari Weiss atop CBS News, and the once-proud network has debased and embarrassed itself at every turn since, in service of the broader projects of wealth concentration, rigid racial hierarchy, and policing criticism of Israel. Doing all that stuff atop Paramount is one thing, but the WBD umbrella is significantly wider, and the Ellisons' cumulative reach across American media is now gargantuan: All of HBO, the Warner Bros. movie studios, CNN, and other TV networks under WBD control are now in their hands. If their stewardship of Paramount is any clue to how they'll handle their new toys, expect pain.
