After six earlier bids from Paramount, Netflix reached a deal to buy WB for $72 billion in cash and shares through an ultimatum. However, Paramount countered with a revised all-cash bid of $108 billion targeted at WB's shareholders to acquire atleast 51% of the shares and push a merger through. Later, Netflix withdrew from the deal and now a US District judge has given the go-ahead for the merge after Paramount agreed to terms set by a collection of US States that they had set in place. The merger will take place as of October 6th, with the new conglomerate being called Skydance.
With Paramount officially taking over WB, David Ellison will remain chairman and CEO of the newly combined Skydance, with Ynon Kreiz becoming the new co-CEO and member of the board of directors. Dana Goldberg and Josh Greenstein will lead the film division, with James Gunn and Peter Safran remaining as DC Studios co-chairmen. Movie output and theatrical windows likely won't being negatively impacted, but TV channels could still be merged with only biggest channels surviving, leading to concerns that news outlets could start reflecting the new owners' and backers' interest.
To recap: when Netflix was in the running, Netflix co-CEO Ted Sarandos said their acquisition was a strategic move that fit their long-term vision, and that their business model would become more valuable. He emphasized the deal unlocked new opportunities for growth and global reach for WB content. They were even so sure, they 'd sent an email to subscribers about it. However, Paramount reacted with an all-cash bid that offers ''higher overall value, greater certainty, a clearer regulatory path and a future that is pro-Hollywood, pro-consumer and pro-competition.''
Concerns over Paramount's offer do still exist however, as it was a mix of financial backers, including foreign investors. Another concern, one later echoed by the collection of States, is that one player would gain too much power, jobs would be lost, and subscription fees would rise even more. Moreover, there were even concerns that creative freedom, the theatrical ecosystem and home release ecosystem would be threatened. On top of these concerns, Paramount's political ties and foreign investments also raise issues around influence, governance, and even national security.
An issue with Netflix was that when combined with HBO, they would have had over 400 million subscribers and would dwarf any competition in the streaming market. Sarandos reassured though that they would keep HBO operating as it was. Skydance is likely doing the same, as HBO is a far more recognizable brand nationally and internationally than Paramount+ is. If Skydance folds Paramount+ into HBO (Max), this would result in a streaming service with a massive subscriber base and a content library capable of rivaling Disney+ and Prime Video for second place after Netflix.
To address big and small screen issues, Ellison said ''Paramount is committed to growing the film and TV output of both businesses.'' Still, a collection of States was concerned that the merger would lead to more competition being removed from an already concentrated market, so safeguards had to be put in place. With WB and Paramount remaining seperate companies under the Skydance Umbrella, one safeguard could be keeping WB's assets Pictures, Animation, Television, Distribution, Music, Games, and Parks. This way, both companies keep operating on it's own.
Another studio that will remain operating on its own is DC Studios, with James Gunn and Peter Safran staying at the helm. However, aside from the upcoming Man of Tomorrow, The Batman Part II and Dynamic Duo, there are no other movies in the pipeline beyond the one Gunn is already working on. This could be a Justice League International movie featuring Superman, Batman, Wonder Woman, Green Lantern, Mr. Terrific, Hawkgirl and Metamorpho fighting a Secret Society led by Gorilla Grodd, although Skydance might hold off on new movies until Man of Tomorrow proves successful.
Either way, Paramount is now set to acquire all assets, something they argued is stronger and benefits shareholders. However, it could also be claimed that the shares Netflix pay with would have lead to more value in the long run. Especially if the acquisition leads to growth rather than a feared industry collapse. Either way, with Paramount acquiring Discovery, the company could still gain too much influence over cable networks. This is particularly concerning in the news sector, where CNN could become another channel like Fox News, making the news landscape more monotonous.
In the end, it will be up to regulators to see a deal through. Paramount offered an all-cash proposal that is called “cleaner,” but the cleanliness of the money itself is debatable and misleading. Paramount has now guaranteed that they will keep WB operating, and they do have a better chance with the FCC as both have a close relationship with the Trump administration. Ultimately, the deal isn't straightforward and will force the market to react. Maybe Peacock will finally be rolled out internationally too. Time will tell if that was once peak is indeed the beginning, or really just the end.