It’s been the talk of Wall Street and Hollywood for weeks, and Paramount Global hasn’t been too pleased, seeking to get in on the talks. Discussions accelerated following the Thanksgiving holiday with a “Big Tech” giant instead. On Friday morning, as the sun rose across Gotham, a deal finalized in the shadow of Sunset Blvd. in Los Angeles was revealed.
Netflix, the streaming Goliath born out of a DVD-by-mail service, is acquiring Warner Bros. — including its film and television studios, the HBO Max platform in competition with Netflix, and the HBO cable TV network, from the David Zaslav-led Warner Bros. Discovery.
For the parent of CBS News & Stations, the agreement between Netflix and WBD is the culmination of a sale process it is displeased with. In a letter reviewed by CNBC and shared Thursday, Paramount’s legal team told Warner Bros. Discovery CEO Zaslav that the company recently created by David Ellison questioned the “fairness and adequacy” of how WBD was seeking bidders for Warner Bros. and its HBO-branded assets.
The sale of Warner Bros. and HBO kicked off in October, and Paramount, along with Netflix and Peacock and NBC parent Comcast, each submitted a second-round bid earlier this week to WBD.
For Paramount, that round was akin to a fashion show required under the rules of the game. “It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder,” reads the letter from attorneys at Quinn Emanuel. “We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD.”
In response, WBD responded to Paramount by saying, “Please be assured that the WBD Board attends to its fiduciary obligations with the utmost care, and that they have fully and robustly complied with them and will continue to do so.”
A MULTI-BILLION DEAL IS DONE
Twenty-four hours later, Netflix and WBD codified a cash and stock transaction valued at $27.75 per WBD share (subject to a collar), with a total enterprise value of approximately $82.7 billion — and equity value of $72 billion — leaving the parent companies of CBS and NBC, respectively, out in the cold.
The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new publicly traded company, which is now expected to be completed in Q3 2026, Netflix and WBD said.
From a content standpoint, Netflix gains a tremendous arsenal of catalog and current content, including The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz and the DC Universe. They will join Netflix’s portfolio of programs including including Wednesday, El Casa de Papel (Money Heist), Bridgerton, and the now-concluding Stranger Things; interesting, the latter show’s creative team, The Duffer Brothers, signed an exclusive four-year deal with Paramount that begins in April.
Commenting on the Warner Bros. win, Ted Sarandos, co-CEO of Netflix, commented, “By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends—with our culture-defining titles like KPop Demon Hunters and Squid Game, we’ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”
