"Netflix will pay for Warner Bros. Discovery's streaming and studio division entirely in cash to edge out its rival Paramount the latest chapter in a months-long saga that, once concluded, could significantly change the global entertainment industry. The streaming giant announced the move on the same day as its fourth quarter earnings. The $72-billion US equity value deal, amounting to $27.75 US per share, "expedites the timeline to a WBD shareholder vote and provides greater certainty of value that will be delivered at closing," Netflix wrote in a letter to investors on Tuesday."
"Netflix and Paramount have been duelling over the deal for months. While Netflix is vying for the company's studio business and streaming catalogue, Paramount wants to acquire the entire company which would include the likes of CNN and the Discovery+ streaming channel. LISTEN | The politics of the Warner Bros. bidding war: Geetha Ranganathan, a senior media analyst at Bloomberg Intelligence, questioned whether the deal was a "must-have" or a "nice-to-have" for Netflix. The deal is largely seen as critical for Paramount Skydance under the helm of new CEO David Ellison, and less so for Netflix, said Ranganathan."
"However, Netflix's subscriber growth has slowed, worrying investors, and it's now relying on engagement to boost its value. To that end, Warner Bros.' deep catalogue which includes major franchises like Harry Potter, TV hits like Friends, The Sopranos and Game of Thrones, and classic films like Citizen Kane and Casablanca would help Netflix scale its business "dramatically," said Ranganathan."
Netflix will acquire Warner Bros. Discovery's streaming and studio division for a $72-billion equity value, paying $27.75 per share in cash to outmaneuver Paramount. The move aims to expedite a WBD shareholder vote and provide closing-value certainty while coming amid a months-long bidding contest. Netflix faces slowing subscriber growth and seeks stronger engagement through Warner Bros.' extensive catalogue, including Harry Potter, Friends, The Sopranos, Game of Thrones, Citizen Kane and Casablanca. Paramount Skydance under CEO David Ellison views the deal as critical, and the transaction could substantially reshape global media and streaming competition.
Read at www.cbc.ca
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