The ongoing saga of whether Netflix or Paramount Skydance will acquire Warner Bros. Discovery has entered a new phase.
After signing a deal with Warner Bros. Discovery, Netflix is allowing Paramount Skydance a week-long window to negotiate with the company and attempt to prove why its bid should be accepted.
In an appearance on CNBC’s Closing Bell: Overtime with Julia Boorstin on Tuesday, Netflix CEO Ted Sarandos laid out the company’s reasoning for why it’s allowing this step.
“We have the only signed deal with Warner Bros. to acquire Warner Bros. Studios, Warner Bros. Television Studios, and HBO,” said Sarandos. “That is a signed deal that we have. Paramount had been making a ton of noise, flooding the zone with confusion for shareholders, so they don’t really understand the deal, including floating all these hypothetical offers and talking directly to the shareholders and bypassing the Warner Bros. Discovery board. So we have given the opportunity to get those shareholders exactly what they deserve, which is complete clarity and certainty about what the value of these deals are.
“And what we’re certain is, is that the Netflix deal to acquire these assets is the best deal, creates, and generates the best value for their shareholders,” he continued. “And they think so, too. That’s why they recommended the deal and why they reiterated recommending that deal post this. So give them seven days to put their money where their mouth is.”
Some have argued that the deal between Netflix and WBD could be viewed as a monopoly. But Sarandos argues it wouldn’t even make the streaming video giant the top company in the space.
“We have 9% of the television business. When you include HBO, we’re going to grow to 10%. Today, YouTube is at 13% and growing very fast,” said Sarandos. “And so if you want to be equipped not to let big tech companies run away with the entertainment industry, you’ve got to be able to compete. So, today, I’d say that the business has never been more competitive and more diverse. And the way that consumers pay and the way they spend time is also increasingly diverse. So the great thing is, there’s choice.”
Sarandos added that he believes the Paramount Skydance owners, Larry and David Ellison, are “flooding the zone with misinformation” when it comes to that company’s bid being more likely to receive regulatory approval for the transaction.
“I don’t know why the Ellisons would insinuate they have some inside track in the Department of Justice, but I can assure you they don’t,” he shared.
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