Less than three months after announcing its plans to acquire a portion of Warner Bros. Discovery’s business, Netflix said Thursday it will not raise its offer, paving the way for rival Paramount Skydance to acquire the storied Hollywood institution and properties such as CNN.
In a news release, Netflix’s co-CEOs Ted Sarandos and Greg Peters said the price required to match Paramount’s latest offer would render the deal no longer financially attractive.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S,” the co-CEOs said in the release. “But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Credit: Courtesy of Warner Broth
Credit: Courtesy of Warner Broth
With Paramount remaining the sole bidder, it appears the Warner Bros. movie studio, HBO and Atlanta-founded properties such as CNN, TNT and TBS will ultimately merge with the owner of CBS and the Paramount+ streaming service.
“Netflix is a great company and throughout this process Ted, Greg, Spence and everyone there have been extraordinary partners to us. We wish them well in the future,” David Zaslav, WBD president and CEO, said in a statement. “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
Last year, Warner Bros. Discovery announced a plan to break itself into two separate public companies.
In December, Netflix confirmed it struck a deal with WBD to acquire its film and television studios, as well as HBO Max and HBO. That deal would have not included WBD’s linear networks division, which included the former Turner properties of CNN, TNT and TBS, among other networks.
The blockbuster deal, totaling about $72 billion, would have created a combined portfolio of many of Hollywood’s best known properties, adding “Harry Potter,” “Mission: Impossible,” DC Comics, MGM classics such as “Gone With the Wind,” and television shows such as “The Sopranos” and “Game of Thrones” to Netflix’s sprawling catalog.
Paramount, now controlled by David Ellison, was another suitor, and wanted the entirety of the WBD business, the linear networks included. After WBD announced the winning bidder, Paramount wouldn’t give up the fight, and eventually submitted a revised offer of $111 billion. WBD said in a Thursday press release that the Skydance offer was a superior proposal, and that Netflix had the right to propose revisions to their merger agreement for four business days.
“We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value,” Sarandos and Peters said in the statement.
The impact that a Paramount-WBD deal would have on WBD’s existing employee base in Atlanta is unclear. Representatives for Paramount did not immediately respond to a request for comment.
— This is a breaking news story. Return to AJC.com for updates.
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