Netflix dramatically pulls out of $72bn Warner Bros deal… what it means for CNN and your streaming invoice
Just two months ago, Netflix looked poised to pull off a $72billion Hollywood coup – snapping up Warner Bros Discovery’s studios and HBO Max.
It is a deal in that would have put Superman, Harry Potter, and Game of Thrones under the control of Netflix.
In a dramatic twist, Netflix tonight abandoned its takeover bid after Warner Bros Discovery’s board ruled a sweeter all-cash offer from Paramount Skydance – valuing the company at $111billion – to be superior.
The decision ends a drawn-out bidding war that had Wall Street and Washington bracing for a seismic shake-up in the streaming world.
Under Paramount’s proposal, CNN would stay inside a combined media giant rather than being spun off as a separate public company – shelving Warner’s earlier plan to break up its cable networks.
That means CNN will remain part of a larger entertainment empire – with greater financial backing to keep it safe – instead of standing alone on Wall Street under Netflix’s deal.
Back in December, Netflix was the clear favorite. Its proposed $27.75-per-share deal for Warner’s studio and streaming assets was billed as a blockbuster combination that could reshape how Americans watch TV.
Superman could soon sit inside a Paramount-Warner powerhouse after Netflix abandoned its takeover bid
Crystal Gorges, a media analyst, previously warned Daily Mail readers that any mega-merger could lead to higher streaming prices
But Paramount kept circling – raising its hostile bid several times before topping Netflix with the $31-per-share offer for the entire company, including cable networks such as CNN, TNT and TBS.
Warner’s board gave Netflix four business days to match the higher bid. Instead, Netflix stepped aside.
‘At the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,’ co-CEOs Ted Sarandos and Greg Peters said in a statement.
Investors cheered the restraint. Netflix shares jumped 10 percent in extended trading Thursday. Warner Bros Discovery shares fell 2 percent.
When Netflix was leading the race, experts warned Daily Mail readers to brace for higher prices.
‘Netflix subscribers should be prepared for price increases,’ media analyst Crystal Gorges previously told the Daily Mail.
Her concern was simple: a mega-merger would have handed Netflix control of HBO hits like The White Lotus alongside Stranger Things – giving it enormous power to push up subscription fees or move premium titles behind new paywalls.
Today, Netflix plans range from $7.99 to $24.99 a month in the US. HBO Max runs from $10.99 to $22.99.
Netflix shares jumped after the company declined to match Paramount’s richer bid for Warner Bros
But Paramount’s likely victory does not mean consumers are off the hook.
A Paramount-Warner tie-up would still concentrate some of Hollywood’s most valuable franchises – from DC Comics to Mission: Impossible – under fewer corporate roofs, a shift that historically gives media giants more pricing power.
Paramount’s likely win could still spell higher streaming bills for millions of Americans, as fewer media giants control more of Hollywood’s biggest franchises.
And analysts warn that combining libraries under one corporate roof will not mean instant access to everything in one app – and certainly not at today’s prices.
Paramount’s bid is now the leading proposal – but it still faces scrutiny from regulators and lawmakers wary of further media consolidation.
If approved, the combined company would create a heavyweight rival to Disney, Amazon and Netflix – potentially redrawing the balance of power in Hollywood.
