Could Netflix's Deal for Warner Bros. Fall Apart? (cnbc.com) 54
While Netflix hopes to buy Warner Bros. Discovery for $72 billion, CNBC reports a senior official in America's federal government said the administration was viewing the deal with "heavy skepticism. And that's not the only hurdle:
On Thursday, The Wall Street Journal reported that Paramount, in a letter to lawyers for Warner Bros. Discovery [WBD], had warned that a sale to Netflix likely would "never close" because of regulatory challenges in the United States and overseas. "Acquiring Warner's streaming and studio assets 'will entrench and extend Netflix's global dominance in a matter not allowed by domestic or foreign competition laws,' Paramount's lawyers wrote," the Journal reported.
Paramount "is now weighing its options about whether to go straight to shareholders with one more improved bid," CNBC reported Friday, "perhaps even higher than the $30-per-share, all-cash offer it submitted to Warner Bros. Discovery this week."
And CNBC reported Friday that the review by America's Department of Justice "can take anywhere from months to more than a year." Netflix said Friday it expects the transaction to close in 12 to 18 months, after Warner Bros. Discovery spins out its portfolio of cable networks into Discovery Global... As part of the deal, Netflix has agreed to pay a $5.8 billion breakup fee to Warner Bros. Discovery if the deal were to get blocked by the government.
Netflix's planned move is already drawing high-powered criticism, reports CNN:
Paramount "is now weighing its options about whether to go straight to shareholders with one more improved bid," CNBC reported Friday, "perhaps even higher than the $30-per-share, all-cash offer it submitted to Warner Bros. Discovery this week."
And CNBC reported Friday that the review by America's Department of Justice "can take anywhere from months to more than a year." Netflix said Friday it expects the transaction to close in 12 to 18 months, after Warner Bros. Discovery spins out its portfolio of cable networks into Discovery Global... As part of the deal, Netflix has agreed to pay a $5.8 billion breakup fee to Warner Bros. Discovery if the deal were to get blocked by the government.
Netflix's planned move is already drawing high-powered criticism, reports CNN:
- "The world's largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent. The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers...." the Writers Guild of America union representing Hollywood writers.
- "Producers are rightfully concerned... Our legacy studios are more than content libraries — within their vaults are the character and culture of our nation." — The Producers Guild of America
- The deal raises "many serious questions" about the entertainment industry's future, "especially the human creative talent whose livelihoods and careers depend on it." — SAG-AFTRA, Hollywood's biggest actors union
- "This is not a win for consumers. Netflix has already aggressively raised prices, increased ad load, and stopped people from sharing passwords. Absorbing a competitor with strong content will only lead to its service becoming more expensive and give consumers less choice." — Ross Benes, a senior analyst at eMarketer, told CNN. [Benes also thinks this could mean fewer companies spending heavily on movies and TV shows. "This contracts the industry."
it's about choice (Score:2)
Re: it's about choice (Score:1)
Yet when we had Netflix and nothing else, we paid less for a better offer. That was before all these companies decided to compete with Netflix instead of licensing their content to Netflix. They got greedy, competition happened, and consumers lost.
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That's not really a fair comparison. Netflix was being funded by VC in growth-at-any-cost mode at the time, and operating at a loss.
Netflix made a loss? When? (Score:2)
Here's the data: I see no losses
https://www.macrotrends.net/st... [macrotrends.net]
Re: it's about choice (Score:5, Informative)
You realize that Netflix was no longer funded by VC money and became publicly traded years before they ever streamed their first video?
The IPO was in 2002, they announced streaming in 2007.
https://en.wikipedia.org/wiki/... [wikipedia.org]
AFAIK Netflix did not use Amazon, or pets.com, model to grow through massive losses. They managed their growth in a sustainable manner. Arguably the DVD subscriptions did finance the migration to streaming for a few years but that was without 'VC' money at that point.
Disclaimer: I'm a former employee and a shareholder.
Re: it's about choice (Score:5, Interesting)
Yes, the real reason why netflix used to have a fantastic catalog at low cost was because at the time, the rights holders didn't take Internet streaming seriously and so cheap deal to Netflix was a low risk easy bit of free money.
Then they took it seriously, didn't get the deals from Netflix they thought they should be able to get and started making their own streaming services instead. Probably the first sign of things was when Starz demanded to be a "premium channel" on Netflix. Frankly if Netflix has accepted that arrangement, they might have been the defacto broker of streaming services in one app, though the user experience suffers, but it suffered anyway.
Re: it's about choice (Score:2)
We never had Netflix and nothing else. There was OTA, cable, video rentals such as blockbuster, for purchase physical media., movie theaters. Many of these are disappearing.
A lot of the new content has shifted away to streaming. Consumers are much worse of for it. And consolidation makes it really egregious.
Laugh? Or cry? (Score:5, Insightful)
Of the dozens and dozens of anti-consumer and terribly damaging mega-mergers over the last 40+ years, this is the one that people absolutely lose their shit over.
I'm not sure if I should laugh or cry.
Re:Laugh? Or cry? (Score:5, Insightful)
Gotta distract from Epstein or how we drop bombs on fishing boats over alleged drugs and then pardon a convicted drug kingpin.
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Gotta distract from Epstein
Literally no one in the government is talking about this. This isn't an attempted distraction unless you have ADHD and can't cope with living in a world where more than one thing by more than one group may happen at once.
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Jared?
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Trump says thanks for letting him live free in there.
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Re: Laugh? Or cry? (Score:1)
Ok but (Score:5, Insightful)
Take this entire summary and replace "Netflix" with "Paramount" and every single criticism still applies.
If Netflix shouldn't buy them then neither should Paramount or Disney or ATT or Comcast or Sony.
Do like every other corporation has done this century does and find some dumb shit PE folks to buy it up and ruin the brand over the next decade.
Re: Ok but (Score:5, Interesting)
I think one of the reasons the Hollywood establishment is afraid is that Netflix might not follow the "Hollywood accounting" tradition.
Netflix has proven that they can create just as good, as well as shitty, shows and movies as the existing players.
An other thing in Netflix strategy that I have not really seen the incumbents do is to import foreign shows as-is. Things like The magnificent Seven, Three Men and a Baby, True Lies, The Office, ... to name a few, were remade in the US while most of the audience had no clue they were remakes.
Other than mostly animated stuff like the movies from Studio Ghibly I don't remember Disney importing things from overseas. Netflix has exposed the US audiences to many great shows from Europe, Asia and even South America such as Money Heist, Squid Game, ...
Netflix is doing things differently than old Hollywood, and it works. Just like Apple disrupted the music industry where everyone hated the record labels, so is Netflix disrupting the tv and movie industry. Personally I do not miss the Comcastic days of cable tv.
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If Netflix shouldn't buy them then neither should Paramount
Yes and no. There's a very VERY big difference between Netflix (the world's largest streaming service with over 1/4 of the market share in the USA, and significantly more globally) buying Warner Brothers and Paramount, a company that can't even crack double digit market share in its home country.
Yeah mergers of large companies are rarely good, but don't pretend these two options are equal.
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a company that can't even crack double digit market share in its home country.
That's if you count *only* streaming platform subscribers though. Paramount/Skydance is far older with a very thorough IP catalog (4500 films, 200k TV episodes), owns and operates CBS with all that comes with a major network, also operates CBS news, multiple other networks (Nickelodeon, MTV, BET, Showtime).
Even in revenue Netflix is bigger but its $33B vs 29B. They are pretty close and you can just as easily make a case that considering the size and age of WB's catalog it makes sense for them to join with
The answer is simple: (Score:5, Insightful)
bribe Trump for a done deal.
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Gotta compete with the Ellison bribes.
Re:The answer is simple: Ellison (Score:3)
YES! I read that Ellison is suing already!
He didn't hold his breath and bury his nose up trumps ass just to buy his kid one media empire! Expect CBS to become another FOX. Consider all those Oracle systems powering the government and how an AI could use them to help target enemies. Maybe he can find the Epstein tapes? No, not the files which are just the tip of the iceberg; but the video connected to those many internal "security" cameras found in just one of the guys houses. (Also, if there was a way, Ep
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10000000000000000000000%. The biggest grift in history is on, baby.
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Will it be cash or a participation trophy like his FIFA medal?
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5 million (Score:1)
They are conservative enough for approval (Score:3, Insightful)
Here's an idea (Score:3)
"The world's largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent. The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers...." the Writers Guild of America union representing Hollywood writers.
While I'm not necessarily onboard with this merger, I've got an idea for them: Stop rebooting and sequeling everything into shit. How many more reboots, sequels, and multiverses does spiderman need exactly? The only good franchises that seem to come from Hollywood now started as novels. Why? Because Hollywood writers can't come up with anything original anymore. Maybe one good thing that can come from this merger is that you guys are finally forced to stop doing this shit.
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Can we really blame them? Why does Disney keep making live action reboots of their animated films? Because people keep paying to watch them. [boxofficemojo.com]
What Are Next? (2025 Edition) [youtube.com]
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What Are Next? (2025 Edition) [youtube.com]
That is fucking awesome!
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I know the joke is half of them and this one are made up but I do kinda want to see the the idea of a "Columbo" reboot with Kate Mulgrew.
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One good side is the hack writers Hollywood uses are like Junior programmers; ripe for AI to replace. The bad side is people will eat shit with a 30% marketing budget... more with AI marketing bots...
But really the problem is producers and execs. They get too much say and control over the creatives. Those hacks then force the creatives to adapt to them. It's rare when things align and something great happens-- except places where all levels are functioning in balance... like Pixar had for a while and predi
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IMO probably the best thing to happen with this industry is for copyright laws to be clipped back to 28 years. The artists will lose their shit, but honestly, the Berne convention just feels like it's designed for the sole purpose of allowing them (and the studios) to just keep rent seeking indefinitely. The US never should have signed to it. Even 28 years is a long fucking time, so why on earth does it need to be their entire lifetime plus 75 years? So their grandkids can rent-seek? It's ridiculous.
You kno
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IMO probably the best thing to happen with this industry is for copyright laws to be clipped back to 28 years. The artists will lose their shit, but honestly, the Berne convention just feels like it's designed for the sole purpose of allowing them (and the studios) to just keep rent seeking indefinitely.
I have an even more radical proposal. Roll back copyright duration to 28 years, but only for works for hire.
This strikes a balance that acknowledges individuals' lower ability to earn money off of a work, and ensures that individuals are able to continue benefitting from their works for the rest of their lives, while still ensuring that musical wor
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The comic canon is that there is an infinite amount of multiverses...
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How many more reboots, sequels, and multiverses does spiderman need exactly?
Depends. Lets look shall we? Spider-Man: Across the Spider-Verse: $690million global, Spider-Man: No Way Home $1.9billion global. It seems that the world wants this stuff. You may not, but others do.
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Hollywood writers can't come up with anything original anymore.
Writers are entirely capable of original ideas, the creative isn't the problem, it's risk aversion. No exec wants to risk getting fired for trying an idea that wasn't an "obvious" win, and even if the tried and true flops they know everyone backed the idea. Don't be the nail that sticks out and you won't get hammered.
Of course the result is tired garbage, but that's what happens when the people running these shops are MBAs who don't love film, Moneyball might be fun in sports but it's the death of fresh pe
So... (Score:4, Insightful)
...no real evidence either way.
Most of the opponents are unions. Their interests will be ignored unless a Democratic government is somehow put into office before the merger completes, which is doubtful.
Paramount opposes it, but every argument they give would also apply to the Paramount takeover of WBD they are arguing for, so... I don't even know why their lawyers submitted this brief.
This year there have been multiple mergers, all heavily against the public interest, where it became clear the deciding point was whether adequate fealty was paid to Trump. Two massive TV station operators were involved in seperate mergers that are only going ahead because they opposed ABC showing a comedian critical of Trump and because ABC "settled" a bogus lawsuit filed by Trump. CBS is going ahead because it cancelled a major Trump critic, also settled a bogus lawsuit with Trump, and the new owner is run by a right wing nutjob relation to Licence Ellison. T-Mobile bought US Cellular after dropping anti-discrimination policies, paying towards Trump's inauguration fund, and funding the "ballroom", despite DOJ objections. And, so on.
The merger will go ahead just as long as Netflix keeps up its steady stream of crappy right wing action movies and right wing comedy specials. And, of course, makes "donations" to Trump "causes".
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Most of the opponents are unions.
Good point. So here's a solution to make everyone happy: A precondition for the acquisition of Warner Brothers (by anybody) should be to place WBs current library in the public domain. Then the unions and everyone else will have plenty of work to do creating new content.
After all, isn't this what copyright is supposed to encourage? The creation of new works?
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The unions would probably get pissed if you did that, as it would deprive them of residuals. Sure, only a handful of people, namely the big name actors, writers, and union management ever see anything beyond pennies from it, but that's really all it takes.
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Unlike some of these other mergers, the Netflix-Warner merger (or a merger of Warner with any other major studio) would require approval from foreign regulators who (generally) can't just be bought off.
Seems like a good match (Score:1)
Every major movie studio has a streaming service of its own, except for Warner Bros. Universal is part of Comcast and has Peacock, Paramount has Paramount+, Disney has Disney+, Sony has something (not sure how big it is).
For those who oppose it, would it feel different if the announcement was that Warner Bros. was buying Netflix to also offer its own streaming platform to compete with the other studios that created their own?
The only thing I don't like about the current media landscape is people have to sig
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Does he know? (Double irony this meme came from a WB film!) [youtube.com]
https://www.hbomax.com/ [hbomax.com]
Paramount? (Score:1)
You mean the company that Larry Ellison just purchased, and who is also hoping to buy Warner Bros? I wonder why they would be trying to stop the sale? Weird.
Paramount shouldn't be allowed to buy it either... (Score:2)
Allowing any existing studio (and with all the shows Netflix makes and has made, they are definitely a studio at this point) to merge with Warner Bros is anti-competitive.
Doesn't matter if its Paramount, Disney, Netflix, Sony, Universal, Amazon or anyone else, it should be blocked on competition grounds.
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The only reason they are for sale is because they're damaged goods.
If they can't merge with anyone else then this will probably lead to Bankruptcy (BK), then anything worthwhile which is left overwould be snapped up by the remaining players. The shareholders would not have this as they pretty much lose everything in a BK. This is why companies usually consolidate when they're distressed, or when a market shrinks.
We know how this will play out (Score:2)
Members of the current administration will certainly talk about anti-competitiveness, along with a copious amount of Trump spewing random unrelated crap when he gets asked about the merger - but then Netflix will funnel money to Trump in some manner and the deal will get done.
Netflix might buy into the ballroom, it might promise to develop "Trump: The Making of a Beloved Modern King", or money will quietly flow directly into the Trump family's pockets. One way or the other, this is going to be allowed to h
WB can just fire another comedian to appease Trump (Score:1)
Not sure I can name one that they broadcast, though. They should have thought have that before.
Why bother? (Score:2)
These overpriced mergers and acquisitions always end up in regret. They pay tons of money for a floundering company, they then fire a bunch of people, and neither company ends up being better than before.
WH wants in on the action (Score:1)
The administration being "sceptical" is but a thinly veiled reminder that don trump expects a big fat beautiful golden envelope.
Literally anything could fall apart (Score:1)
Most of these large M&As often end up happening with some restrictions being put in place to supposedly prevent anti-competitive behaviour. At th
What are the unions' opinion of Paramount? (Score:2)
The relevant unions clearly don't like Netflix owning the studio. I'd really like them to weigh in on Paramount owning it.