Netflix co-CEO Ted Sarandos came out swinging after the streamer and Warner Bros. Discovery gave Paramount until Feb. 23 to submit a “best and final offer,” accusing David Ellison & Co. of “flooding the zone with confusion for shareholders.”
“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,” Sarandos told CNBC on Tuesday. “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.”
“What we’re certain of is that the Netflix deal to acquire these assets is the best deal, generates the best value for their shareholders,” Sarandos added. “And [the Warner Bros. board] 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.”
During the seven-day period, Paramount and Warner’s board will discuss the unresolved deficiencies and clarify certain terms in the former’s latest amended $30 per share offer, though Netflix retains the right to match any counter offer from Paramount. The media giant signaled its willing to bump its bid to at least $31 per share just to reopen talks, but said that isn’t its “best and final” offer.
When asked about raising its bid to match Paramount, Sarandos replied: “That’s not something you typically do with a phone call. And I don’t want to get into the hypotheticals of what we do, what — of all these moves. Let them make a move and then we will see where the next step takes us.”
Last December Netflix finalized its proposed deal to acquire the studios-and-streaming unit of WBD for $82.7 billion. Paramount has since made multiple hostile bids for all of WBD, appealing directly to shareholders, who will vote next month on the Netflix proposal. Paramount now has seven more days to negotiate with the board and potentially raise its bid to propose its best offer.
Sarandos also acknowledged in the interview that the deal has not been embraced by Hollywood as it’s seen rounds of cutbacks and consolidation in recent years.
“People would say the preference would be there be no deal,” he told CNBC. “That’s what the unions would like. That’s what a lot of folks would like, no deal. But the Warner Bros. Discovery board has determined it was in their long-term best interest to sell these assets, so there is going to be a deal.”
Netflix reiterated Tuesday that its deal with Warner Bros. would deliver more choice and greater value to audiences worldwide with expanded access to exceptional films and television at home and in theaters.
Netflix also warned that the Paramount offer would create “significant horizontal overlaps” that will concern antitrust enforcers, including combining two of the five major Hollywood studios, two major theatrical distribution channels, two of the major TV studios, two major news networks and two major sports distributors.
Netflix retains the right to match any counter offer from Paramount. Shareholders are set to vote on the Netflix deal at a special meeting on March 20 at 8 a.m. ET. Shareholders of record as of Feb. 4 at 5 p.m. ET will be entitled to vote at the meeting.
