A couple of weeks ago, Warner Bros. Discovery announced it was up for sale, and Paramount Skydance submitted a bid along with Comcast (parent company of NBCUniversal) and Netflix. Even though Paramount was considered to have the edge, today WBD pronounced Netflix as the winner. The announced deal is already coming under heavy scrutiny, and Paramount is not giving up their pursuit. So, once again, the future of the company that owns Star Trek is in flux.
Netflix Maxed has people spooked
The Netflix deal comes in at almost $83 billion. The streaming giant is buying the more valuable parts of the company (studios, intellectual property, and HBO Max) following a planned split of WBD next year, with the cable assets (CNN, TBS, etc.) spun off as a separate company. According to Netflix, the deal will “offer more choice and greater value for consumers, create more opportunities for the creative community and generate shareholder value.” However, this vision has met with skepticism by Wall Street: Netflix stock is down over 3% just today, and that followed an almost 10% drop since their interest was first reported in October.
As for the creative community in Hollywood, the deal has landed with a resounding thud, igniting concerns over reduced theatrical releases and decreased competition for creative content. As rumors of the deal spread yesterday, a group of filmmaker A-Listers sent a letter to Congress saying this deal would “hold a noose around the theatrical marketplace.” Today the Writer’s Guild joined in, saying “This merger must be stopped,” and the Director’s Guild expressed “significant concerns.” Trade groups representing theater owners in both the USA and Europe also announced plans to lobby against the deal.
There has already been bipartisan condemnation of the deal coming from Congress. Senator Elizabeth Warren called it an “anti-monopoly nightmare” for consumers. Any deal of this nature would have to get approval from regulators across the globe, and already there are indications that Trump administration views the deal with “heavy skepticism.” Most analysts feel Netflix will have an uphill battle when it comes to regulatory approval, which is one of the reasons they added a $5.8 billion sweetener to their offer—which WBD gets to keep if the deal doesn’t go through.
Paramount preparing counterattack
In the end, it appears the deal came down to just Paramount and Netflix, with Comcast out of the running for the final bidding. One of the reasons Paramount was seen as a favorite in this corporate battle was its closer relationship with the current administration. It’s clear that new CEO David Ellison wants to use this deal to jump Paramount Skydance into being one of the biggest media companies, able to compete head-to-head with Disney in terms of production prowess as well as streaming, although Disney would still be the bigger company even if Skydance had won the deal.
Paramount is reportedly considering taking their case directly to shareholders and bypassing the board of directors with a hostile takeover, arguing they made the superior bid. They offered $30 per share (all cash) compared to Netflix’s $27.75 (85% cash). However, Paramount was bidding for all of WBD, whereas Netflix wasn’t interested in the cable companies being spun off, so in the end which bid was higher comes down to how much that remaining company of declining legacy networks is worth. Paramount Skydance already made the first move in their post-deal announcement fight; they fired off a letter to the WBD board yesterday claiming the Netflix deal offered “substantial” risks and accused the board of not acting in good faith or in the best interest of shareholders.
One thing all analysts agree on is that this saga is not over and could take years to resolve. In the short run, it doesn’t look like the company that makes Star Trek will be merging with an even bigger studio and streamer, at least not in the short term.
As usual, we will monitor all the business machinations that impact Star Trek.
source: trekmovie.com