Netflix surprised the entertainment world this week by refusing to raise its bid for Warner Bros. Discovery, setting the stage for Paramount Skydance to win ownership of the Hollywood studio.
At the time, Netflix co-CEOs Ted Sarandos and Greg Peters said the company was being financially disciplined. The latest Bloomberg report provides more details about why Netflix executives pulled out of a bidding war that looked like they could win back in December.
First, the streaming giant’s shareholders seemed highly skeptical that the deal was a good one. Netflix’s stock price has fallen 30% since the deal was announced, but the company’s stock price has since risen nearly 14% on news that the company is rescinding the deal. (It also recovered $2.8 billion in write-offs from Paramount.)
Second, Netflix’s commitment to the deal reportedly wavered after Paramount made an increased offer and appeared to be planning several more rounds of bidding wars.
Sarandos may have already decided to make concessions when he met with Trump administration officials on Thursday. In fact, President Donald Trump had previously warned her against overpaying, and Sarandos reportedly told her that she had “taken your advice.”
Meanwhile, Warner Bros. employees are now concerned about major studio layoffs and conservative political pressure on CNN.
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