Streaming lost to Hollywood: who bought Warner Bros.
27 February 12:09
Streaming giant Netflix has effectively ended its bid to acquire Warner Bros. after Paramount Global outbid its previous offer. This was reported by "Komersant Ukrainian" with reference to the BBC.
Netflix management decided not to raise its bid, explaining that the deal had lost its economic viability for shareholders due to the price increase.
Why Netflix abandoned the deal
According to the BBC, the parties had already agreed on the terms of a possible acquisition in December. However, after Paramount’s intervention and a significant increase in the cost, Netflix executives recognized that:
- the deal was becoming too expensive;
- the financial risks were increasing;
- the investment appeal for shareholders was declining.
As a result, Netflix decided to focus on organic growth and its own content.
How much is the deal worth?
According to reports, Paramount is ready to:
- cover the insurance payment of over $2 billion that Netflix was supposed to receive due to the breakdown of the previous agreement;
- pay Warner Bros an additional $7 billion;
- The total market value of Warner Bros. shares exceeds $82 billion.
If the deal goes through, it will be one of the largest media mergers in recent years.
Political context
In the US, corporate bidding between Netflix and Paramount was called “a choice between two bad scenarios.”
Critics feared that:
- Netflix could strengthen its dominance in streaming and hit the traditional film industry;
- Paramount has close ties to the administration of US President Donald Trump, raising questions about political influence on the media market.
Trump’s opponents have previously accused him of aggressive rhetoric toward the media and pressure on freedom of speech.
What the merger means for the market
If the deal goes through, possible consequences include:
- Paramount’s position in Hollywood will be strengthened;
- a shift in the balance of power in the global film industry;
- a redistribution of content libraries and franchises;
- impact on streaming platforms and film distribution.
Experts note that this could accelerate a new wave of consolidation among media companies in the US.
Netflix declined to purchase Warner Bros. due to the rising cost of the deal, yielding to Paramount. Further developments will depend on regulatory decisions and the position of shareholders.
