The drama over the fate of Warner Bros. Discovery has been one of the hottest topics of the month as Netflix announced that the top-dog streaming service had secured an acquisition deal to get its hands on the legacy Hollywood studio after it entertained a handful of bids. That seemingly “done deal” (said to be worth $72 billion) wasn’t enough for David Ellison (recently had his company Skydance buy up Paramount, rebranding as the new media entity Paramount Skydance), as the son of billionaire Larry Ellison would publicly reveal his intentions to pursue a hostile takeover bid (worth $108 billion) with the controversial help of Middle Eastern countries such as Saudi Arabia, Qatar, and Abu Dhabi alongside equally odd investments from Jared Kushner‘s Affinity Partners (President Trump‘s son-in-law and sometime White House representative) and China’s Tencent (designated by the U.S. Department of Defense in early January as a “Chinese Military Company”).
Now, there is word from Bloomberg that the board of WBD is gearing up to let the 10-business-day response to expire as they’re reportedly expected to “reject” the Ellison offer for a second time. Adding that if WBD did, they would trigger a massive $2.8 billion termination fee that they’d have to pay Netflix.
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“Since that offer was already rejected once, the Warner Bros. board isn’t planning to cancel the merger agreement signed last week with Netflix, according to people familiar with the company’s thinking. Doing so would require Warner Bros. to pay Netflix a $2.8 billion termination fee,” Bloomberg’s Josh Lucas mentioned in their reporting from yesterday.
These rebuffs from the board aren’t surprising, as WBD’s David Zaslav is said (via Variety) to have stopped interacting with Ellison after 12 weeks of talks. This comes after Netflix’s co-CEO Ted Sarandos said at the UBS conference in New York on Monday of the hostile counterbid, “Today’s move was entirely expected. We have a deal done, and we are really happy with the deal for shareholders, for consumers, it’s a great way to create and protect jobs in the entertainment industry. We’re super confident we are going to get it across.”
Some of the more controversial angles here with the Paramount Skydance/Ellison side of things have been that foreign nationals/governments are seen as a MASSIVE conflict of interest (including Ellisons being huge Trump donors and his son-in-law hinting toward political corruption being at the center here). As getting involved with this hostile bid likely has more to do with The Ellison Family’s push to control U.S. media networks after taking the reins at CBS News (seen by many media advocates as heading in a concerning direction with firebrand opinion writer Bari Weiss overseeing their “news” division, despite being inexperienced in that realm, with her recent questionable motives and firings/hirings) and their main aim here is really about acquiring CNN (including what is and isn’t said on those airwaves), which has been seen as a rather large anti-trust red flag.
Ultimately, the U.S. government will decide the outcome of this WBD-Netflix deal, and if President Trump did get personally involved (something that has been signalled by some involved), it would open this entire thing up to years-long lawsuits, as the DOJ is supposed to act, by law, as an independently legal branch of the government and shouldn’t be taking direct marching orders from the White House on matters like these. Having Trump’s son-in-law directly involved here would add to the apparence of potential corruption.
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