Netflix co-CEOs Ted Sarandos and Greg Peters praised the Warner Bros. Discovery’s board rejection of Paramount’s all-cash, $108.4 billion offer to acquire the entire company, arguing on Wednesday that the move reinforces that its $82.7 billion deal for the company’s studio and streaming assets is “superior” and in the best interest of shareholders.
“This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry,” Sarandos said in a statement. “Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television. We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen.”
“By acquiring Warner Bros., we’ll be able to offer audiences and creators around the world even more choice, value and opportunity. This transaction is fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth,” Peters added. “Together we will deliver an even broader selection of great series and films that audiences can watch at home and in theaters, while driving long-term value for our stockholders. We’re excited to begin this new chapter and continue to entertain and delight fans around the world.”
In a Wednesday letter to WBD shareholders, the streamer reiterated that its deal has “superior financing certainty and clear funding structure.”
“Our deal structure is clean and certain, with committed debt financing from leading institutions. There are no contingencies, no foreign sovereign wealth funds, and no stock collateral or personal loans. We are a scaled company with a +$400 billion market cap and a strong investment grade balance sheet,” the letter states. “As WBD said, the PSKY offer has “numerous risks and uncertainties” associated with it, among which are PSKY’s financial condition and creditworthiness.”
It also expressed confidence that its deal would close in 12 to 18 months upon receiving regulatory approval. The company has submitted its Hart-Scott Rodino filing in the U.S. and said it is “engaging with competition authorities,” including the Department of Justice and European Union Commission. It added that its deal is not subject to a review by the Committee on Foreign Investment in the United States (CFIUS) and that its offered a $5.8 billion breakup fee should the deal fail to close.
Additionally, Netflix said its offer provides flexibility for WBD to run its business through closing of the deal as well as facilitate the separation of Discovery Global in the third quarter of 2026.
“In contrast, PSKY’s offer puts substantial limitations on WBD’s operations between sign and close and requires WBD to abandon its planned separation of Discovery Global,” Netflix’s letter continued. “As a result, if PSKY’s offer ultimately fails to close, WBD’s stockholders will have lost the opportunity to reposition the company and realize substantial benefits of the separation for a prolonged period.”
Lastly, Netflix said its deal is “fully negotiated” and “designed for execution.”
“For all these reasons, we believe Netflix is the right home for Warner Bros. and the legacy it has built over the last century. As we move forward, we are committed to working closely with WBD, regulators, and all stakeholders to ensure a smooth and successful transaction,” the letter concluded. “Our focus will remain on execution, delivering exceptional storytelling, investing in creative talent, and strengthening a vibrant, competitive global entertainment industry.”
In addition to the letter, Netflix claimed that its deal has “overwhelming” support from U.S. consumers, citing a new survey from Morning Consult.
The survey of 700 U.S. adults conducted on Dec. 8 and 9 found nearly 6 in 10 Netflix, HBO Max and Paramount+ subscribers support its proposed combination. It also said that 44% of respondents believe that the deal would increase the variety of shows and movies available, compared to 15% who didn’t.
That tracks in stark contrast to the public criticism that Netflix’s deal has received, with some fearing for the future of the theatrical business if the deal is approved. TheWrap previously reported that the deal could further accelerate the industry’s move away from residuals, the lifeblood of many producers, actors and filmmakers.
All eyes will now be on Paramount CEO David Ellison’s next move, as he previously said that his $30-per-share bid is not “best and final.”
The tender offer will be open for a minimum of 20 business days, or until Jan. 8, with the option for an extension. Under the terms, shareholders have withdrawal rights that expire at 5 p.m. ET on Jan. 8 unless the offer is extended.
Paramount also has the option to raise its offer, though Netflix has the option of countering it.
