This week, Netflix shocked the entertainment industry by refusing to increase its bid for Warner Bros. Discovery, paving the way for Paramount Skydance to acquire the Hollywood studio.
Ted Sarandos and Greg Peters, coCEOs of Netflix at the time, claimed to be practicing financial restraint.More information on Netflix executives’ decision to back down from a bidding war they appeared to win back in December may be found in a recent Bloomberg piece.
For starters, Netflix’s stock price dropped 30% after the company announced the acquisition, but it rose about 14% after the announcement that it was backing out. This suggests that the streaming behemoth’s stockholders were extremely doubtful that the merger was a good one. (Paramount also paid it a $2.8 billion breakup fee.)
Another is that once Paramount made a higher offer and appeared prepared to engage in multiple rounds of bidding, Netflix’s commitment to the agreement allegedly faltered.
Sarandos might have already made up his mind to give in by the time he met with Trump administration officials on Thursday.In fact, Sarandos allegedly told President Donald Trump, “I accepted your advise,” after Trump had earlier cautioned him against overpaying.
Warner Bros. employees are now concerned about CNN being pressured by Republican politicians and significant studio layoffs.
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