MoffettNathanson senior analyst Robert Fishman estimates the decline in stock driven by Netflix, the Warner Bros. deal. Discovery and the long-term vision of ‘The Claman Countdown.’
Netflix co-CEO Ted Sarandos is expected to testify Tuesday before a Senate panel looking into how the giant’s proposed $72 billion purchase of Warner Bros. Discovery will affect the entertainment industry’s broadcast competition.
Sarandos will testify along with Warner Bros. Chief Revenue Officer Bruce Campbell as executives face questions about the competitive impact of the proposed merger before the Senate Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights.
Although Congress does not have the authority to block or delay the merger, the hearing will give lawmakers an opportunity to hear from the companies about how it will affect competition between streaming platforms, as well as employees and consumers.
If The Netflix bid at Warner Bros. If the acquisition is successful, the streaming service will gain access to the WBD film and television studios, the HBO Max streaming service, and a content library that includes “Game of Thrones,” “Harry Potter,” and DC Comics heroes Batman and Superman.
NETFLIX AMENDS BROS ALERT TO RECEIVE ALL MONEY DONATION
Netflix CEO Ted Sarandos will testify about the company’s pending acquisition of Warner Bros. Discovery. (David Benito/FilmMagic)
Sen. Mike Lee, R-Utah, who chairs the subcommittee holding the hearing, has criticized the deal and has questioned whether Netflix intends to move forward with it or whether it wants to prevent competition during what could be a lengthy antitrust review.
The agreement is currently being reviewed by the Department of Justicewhen Paramount Skydance pursued an aggressive bid after the board of Warner Bros.
| A ticker | Security | Finally | Change | Change % |
|---|---|---|---|---|
| NFLX | Company NETFLIX INC. | 82.76 | -0.73 |
-0.87% |
| WBD | WARNER BROS. Company DISCOVERY INC. | 27.52 | -0.02 |
-0.07% |
| PSKY | PARAMOUNT SKYDANCE CORP. | 10.91 | -0.27 |
-2.37% |
WARNER BROS DISCOVERY BOARD REJECTS PARAMOUNT’S TENDER OFFER, SAYS NETFLIX DEAL SUPERIOR
Paramount says it will have a good way to go legal approvalalthough Warner Bros. Discovery noted that the company would have to go into debt to finance the deal.
Sources close to Netflix noted that the acquisition of Warner Bros. Discovery by Paramount will also reduce the number of studios, reducing competition in the space.
Netflix released statistics from media analysis company Nielsen to show that YouTube by Google has a larger share of viewing time on US household TVs than other similar streaming services. Antitrust experts noted that the DOJ’s review may focus on subscription-based streaming services that are very similar to Netflix.
PARAMOUNT LAUNCHES AGGRESSIVE TAKEOVER BID TO ACQUIRE WARNER BROS, SAYS OFFER ‘COMPLETE’ FOR NETFLIX DEAL
Warner Bros. Discovery plans to continue its merger agreement with Netflix. (Photos by Mario Tama/Getty/Getty Images)
Last month, the board of Warner Bros. Discovery voted unanimously to reject Paramount’s tender request, and the Chairman of the board of Warner Bros. merger agreement with Netflix in many key areas.”
“Paramount’s offer continues to provide insufficient value, including terms such as an extraordinary amount of debt capital that creates a risk of foreclosure and a lack of protection for our shareholders if the transaction is not completed,” continued Di Piazza. “Our binding agreement with Netflix will provide the highest value in terms of guarantees, without the significant risks and costs that Paramount would impose on our shareholders.”
Paramount’s bid for Warner Bros Discovery was rejected by the board. (Mario Tama/Getty Images)
Netflix revised its bid for Warner Bros. Discovery last month offered cash at a price of $27.75 per share, making the deal worth $72 billion, an enterprise value of $82.7 billion.
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Paramount’s offer equals an enterprise value of $108 billion and includes additional assets, such as the Warner Bros. cable business. Discovery.
Reuters contributed to this report.
