Warner Bros Discovery, home to major franchises such as Game of Thrones, Harry Potter and DC Comics’ superheroes Batman and Superman, has rejected Paramount Skydance’s latest offer to buy the company amid a looming deal with the streaming giant Netflix.
On Tuesday, Warner Bros rejected Paramount’s $30 per share bid, but has remained open to additional offers, giving the parent company of CBS News seven days to come up with its “best and final offer”.
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“Our Board has not determined that your proposal is reasonably likely to result in a transaction that is superior to the Netflix merger,” Warner Bros chairman Samuel DiPiazza Jr and CEO David Zaslav said in a letter sent to the Paramount board on Tuesday.
Paramount is expected to offer a possible higher price of $31 per share, according to the letter.
Netflix would then be allowed to match the terms of the deal.
“We continue to recommend and remain fully committed to our transaction with Netflix,” DiPiazza Jr said.
Warner Bros shareholders are slated to vote on the Netflix bid on March 20.
Netflix issued a statement saying the deal has reached a milestone, with Warner Bros shareholders set to vote next month on the merger.
“While we are confident that our transaction provides superior value and certainty, we recognise the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics,” Netflix said, referring to Paramount Skydance.
Paramount has said the Warner Bros board “never meaningfully engaged” with them on six different offers that executives made in the 12 weeks before Warner Bros announced the merger agreement with Netflix on December 5.
“Time is running out for Paramount with this saga wrangling on, for way too long, which is in no one’s interest,” PP Foresight analyst Paolo Pescatore told the Reuters news agency.
Regulatory hurdles
Both deals have faced significant hurdles in Washington, DC, amid concerns of industry consolidation and the impact it would have for consumers.
In the case of Paramount Skydance, this is driven by possible shifts in content. CEO David Ellison allegedly promised United States President Donald Trump “sweeping changes” to Warner Bros Discovery’s CNN, which Trump has long alleged is too critical of him, The Wall Street Journal has reported.
At the same time, CBS News, which is owned by Paramount, has made several moves that have been seen as efforts to appease the Trump administration. These include: appointing Bari Weiss, a conservative opinion writer with no television experience, to lead the storied broadcast network; appointing a former Trump appointee to oversee and address allegations of bias, and settling a lawsuit with Trump amid allegations that the network’s news magazine programme, 60 Minutes, doctored an interview with then-Democratic presidential hopeful Kamala Harris.
On Monday, CBS late-night show host Stephen Colbert claimed that the network also barred him from airing an interview with Texas Democratic State Representative James Talarico, who is currently running for the Democratic nomination to represent the state in the US Senate.
“Donald Trump’s administration wants to silence anyone who says anything bad about Trump on TV, because all Trump does is watch TV,” Colbert said on Monday’s broadcast of The Late Show.
The Republican-led Federal Communications Commission said last month that daytime and late-night television talk shows are no longer considered “bona fide” news programmes, exempt from equal time rules that require them to give airtime to the views of opposing candidates.
A merger between Warner Bros and Paramount “would also put CNN and CBS under the same parent company, along with dozens of additional TV stations, and that consolidation creates serious concerns about the types of content we will see in a more traditional TV format going forward,” Lee Hepner, senior legal counsel at the American Economic Liberties Project, an economic think tank, told Al Jazeera.
Paramount’s revised offer, which included a personal guarantee on $40bn in equity from Oracle founder Larry Ellison, father to Paramount’s CEO, was turned down in early January. Larry Ellison has been a long-time supporter of Trump.
Congressional leaders have raised concerns about both deals.
“With either merger, another corporation will have that increased control over what we see, what we hear and what news we consume,” Senator Cory Booker of New Jersey said in a US Senate antitrust subcommittee hearing earlier this month.
“I will not be surprised if this gets thwarted,” Republican Senator Mike Lee of Utah, who also chairs the committee, told the outlet Semafor in December.
The Writers Guild raised concerns about the Netflix deal in December, when the potential merger was originally announced.
“The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” the guild said in a statement. “This merger must be blocked.”
“I think what I am seeing lost in the excitement around this bidding war and who is going to emerge victorious is that all of the parties seem to be vastly underestimating the regulatory risk,” Hepner said.
On Wall Street, Paramount Skydance stock is surging in midday trading. It is up 7.4 percent since the market opened. Netflix is also up slightly by 0.4 percent and Warner Bros Discovery is up 3.4 percent.
