On Tuesday, Netflix agreed to allow Warner Bros. Discovery to enter a seven-day negotiating period with Paramount whereby the two sides can discuss a potential offer that would usurp the deal Netflix currently has in place with the storied Hollywood studio.
But don’t let that decision fool you. Netflix still believes it has the best offer now, and will have the best offer once the one-week period concludes. The streaming giant asserts that allowing Paramount and WBD to engage formally will allow WBD thwart a hostile takeover bid once and for all, essentially calling Paramount’s bluff that their “best and final offer” will not be superior to its own.
Netflix CEO Ted Sarandos perhaps went even further during an interview with CNBC on Tuesday. Sarandos said Paramount is “flooding the zone with misinformation, creating a bunch of what-ifs and scenarios that are very wild…”
The Netflix CEO is likely referring to the effort from Paramount to cast doubt over Netflix’s ability to get a deal through the Trump administration. Instead, Sarandos believes Paramount should “put their money where their mouth is” and simply raise its offer. “The most likely outcome is, there’s no adjustment [to Paramount’s deal] at all.”
That’s not entirely true, though it may be functionally true by the end of the one-week period. Paramount has reportedly offered to raise its bid by $1 per share, from $30 to $31, simply for reengaging. However, that might not be enough to convince the WBD board to seriously consider Paramount’s offer, which would see the company take on enormous debt, to the relative stability Netflix’s offer provides.
Sarandos also directly addressed Paramount’s claims that the Netflix deal would face more regulatory uncertainty than its own.
“[Paramount] does not have a faster regulatory path. I don’t know why [Paramount owner David Ellison] would insinuate they have some inside track in the Department of Justice, but I can assure you they don’t, and that, and in terms of our regulatory in Europe and around the world, we are known entities and trusted entities with all the players in Europe,” Sarandos said. “And, in fact, our deal, by not acquiring Discovery Global, we don’t disrupt the European broadcast system at all.”
It’s true that David Ellison has been on a mission to spin the narrative in his favor ever since the WBD board opted to accept Netflix’s offer late last year. But ever since Paramount began angling for a hostile takeover, the company has only taken half-measures to sweeten its bid. So far, Paramount hasn’t formally offered a deal with a higher price per share.
Now, it’s put up or shut up time for David Ellison. Will Paramount put out a bid that the WBD board has to seriously consider? Or will it be more smoke and mirrors to mask what might already be the highest Paramount is willing to go?
About Drew Lerner
Drew Lerner is a staff writer for Awful Announcing and an aspiring cable subscriber. He previously covered sports media for Sports Media Watch. Future beat writer for the Oasis reunion tour.