Netflix Leadership Defends $82.7B Warner Bros. Deal Amid Rival Bid: Report

• Netflix’s leadership emphasized that Warner Bros films will continue to be released in cinemas.
• The letter follows a hostile bid by Paramount Skydance Corp. (PSKY) to take over Warner Bros. Discovery.
• Netflix’s deal has received criticism, with both Republican and Democratic lawmakers expressing worries. 

Netflix Inc. (NFLX) executives are reportedly defending their $82.7 billion agreement to acquire Warner Bros Discovery Inc. (WBD) following a competing hostile bid from Paramount Skydance Corp. (PSKY) 

According to a Bloomberg report, the co-CEOs of Netflix, Greg Peters and Ted Sarandos, outlined their position to employees on Monday, aiming to address worries over potential layoffs and the future of theatrical releases.

Commitment To Theaters And Jobs

Netflix’s leadership emphasized that Warner Bros films will continue to be released in cinemas, countering concerns that the streaming giant would favor a digital-first approach, stated the report. 

“We’re strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”

-Greg Peters and Ted Sarandos, Co-CEOs, Netflix 

Netflix stock inched 0.8% higher in Monday’s premarket. On Stocktwits, retail sentiment around the stock remained in ‘extremely bullish’ territory amid ‘extremely high’ message volume levels. 

On December 5, Netflix announced a deal to acquire Warner Bros., including its film and television studios, HBO, and HBO Max, in a cash-and-stock transaction. 

Antitrust Worries 

The deal has faced criticism from both Republican and Democratic lawmakers. Republican Senator Mike Lee of Utah, who chairs the antitrust committee, said the deal should alert antitrust authorities worldwide. Senator Elizabeth Warren said it could lead to higher subscription costs for Americans. 

According to the report, Netflix executives acknowledge potential antitrust scrutiny but cite Nielsen viewership data indicating that a combined Netflix-Warner Bros entity would capture less market share than YouTube or a Paramount-Warner Bros combination.

On December 8, Paramount Skydance announced an all-cash offer of $30 per share, which would cover all of WBD, including its Global Networks division. The company pointed out that this new offer gives WBD shareholders $18 billion more in cash than Netflix had offered.

NFLX stock has gained over 6% year-to-date. 

Also See: Opendoor Announces Key Leadership Changes – Says ‘Best Candidate’ Was Already Working There

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