As the two major streaming platforms-Warner Bros. and Netflix– prepare to join, concerns are constantly voiced about implications of the dealwhich reflects further consolidation in the media business.
On Monday, Paramount CEO David Ellison announced that the company has filed a lawsuit against Warner Bros. Discovery (WBD) in Delaware, demanding greater financial disclosure regarding its $82.7 billion acquisition of Netflix.
At letter to shareholders, Ellison announced that a lawsuit had been filed in the Delaware Court of Chancery, asking WBD to provide important information it allegedly failed to share. Ellison said shareholders need accurate information to assess whether to accept Paramount’s rival offer of $30 per share, which it claims is superior to the Netflix deal.
Ellison wrote, “WBD has provided more recent reasons for avoiding a deal with Paramount, but what it has never said, because it can’t, is that the Netflix deal is superior to the real deal.”
“Together with the shareholders of WBD, we asked for the usual financial disclosure that should be provided by the board of shareholders when making investment recommendations … WBD failed to include any disclosure on how to value the Netflix transaction as a whole, how to reduce the purchase price for debt can be used in the Netflix transaction, or even what is the basis for the ‘risk adjustment’ of the risk adjustment’ offer for the investment decision of $ 30 per share. in our offer,” added Ellison.
Last week, the WBD board turned down Paramount’s latest offer once again, he said there was too much risk of the deal falling through.
President Trump also expressed his displeasure with the merger. Over the weekend, Trump shared Social Truth An opinion piece by John Pierce titled “Stop the Netflix Cultural Takeover,” published on One America News last month. Pierce believes Netflix is getting Warner Bros.’ streaming and studio assets, will become “the most dominant cultural gatekeeper the United States—and much of the world—has ever seen.”
After meeting with Netflix co-CEO Ted Sarandos in December, Trump shown that the merger “could be problematic,” given Netflix’s already significant market share, which would expand the acquisition.
The industry has also generally reacted negatively to the acquisition, raising concerns about project implications, the future of theatrical releases, and the representation of diverse voices in film and TV.
co-CEO of Netflix Greg Peters and Sarandos tried to address that fear in last month’s letter. However, the Writers Guild of America (WGA) continued to oppose the acquisition, citing violations of antitrust laws. Lawmakers, including Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal, have warned that the merger could lead to higher consumer costs, increasing financial pressure on middle-class families, especially after Netflix’s price hike.