important will buy Warner Bros. Discovery after Netflix dropped out of the bidding war on Thursday. David Ellison's company offered $31 per share, topping Netflix's $82.7 billion bid, and now controls major studios, HBO, CNN, and more.
Key Takeaways
- important's $111 billion deal values Warner Bros. Discovery at $31 a share, beating Netflix's all-cash offer.
- Netflix won't match the bid, citing it as no longer financially attractive; Warner Bros. Discovery owes Netflix a $2.8 billion breakup fee.
- The merger combines Hollywood studios, streaming services like Max, and cable networks including CNN and TBS.
- Backed by Larry Ellison's wealth and major banks, the deal takes on $33 billion in Warner Bros. Discovery debt.
Background
Warner Bros. Discovery has faced tough times. Debt piled up after mergers. Streaming wars hurt profits. Cable TV viewers dropped off. David Zaslav, the CEO, pushed cost cuts and deals to stay afloat.
Netflix entered the picture last December. It offered nearly $83 billion for the studios and streaming side. Shareholders liked it. Regulators seemed okay with it. But important Skydance kept coming back with bigger numbers.
David Ellison runs Skydance. His dad, Larry Ellison from Oracle, put up cash last year to buy important. That deal closed recently. Now they're going bigger. Larry's worth $201 billion. He can fund this easily.
But earlier bids from important got shot down. Warner Bros. Discovery stuck with Netflix at first. Then important upped the ante this week. They raised the price. Added cash for the breakup fee. Gave more time. Warner Bros. Discovery's board called it superior.
And Netflix had four days to fight back. They chose not to. Shares jumped anyway. Netflix up 10% after hours. important up 4.5%. Markets like the end of uncertainty.
This isn't just about money. Ellison's moves draw eyes. His CBS news has shifted tone. Less criticism of the Trump administration. Bari Weiss runs the newsroom now. She's known for strong views. Larry donates big to Trump. Questions linger on editorial freedom.
For more on Ellison's push into Warner Bros., check our coverage on David Ellison’s Skydance Eyes Warner Bros. Amid Box Office Struggles. And see how Netflix Walks Away From Warner Bros. Deal as important Wins Bidding War.
Key Details
The deal values Warner Bros. Discovery at about $111 billion. That's $31 per share. important takes the whole company. Not just parts.
Deal Financing
Banks step up big. Bank of America Merrill Lynch, Citi, and Apollo Global Management commit $57.5 billion in debt. Larry Ellison adds equity. important's market cap sits at $12 billion now. They handle Warner Bros. Discovery's $33 billion debt too.
Netflix gets $2.8 billion to walk away. important pays that. No haggling there.
What goes to important? Everything. Warner studios make movies like Batman. DC Comics too. HBO brings Game of Thrones fame. Max streams it all. Games division. Linear TV: CNN, TBS, TNT, Discovery Channel, HGTV. Sports rights. News. It's a full package.
Zaslav stays on, it seems. He praised the deal.
"Once our board votes to accept the important merger agreement, it will deliver substantial value to our shareholders. We are enthusiastic about the possibilities of a merged important Skydance and Warner Bros. Discovery and are eager to commence our collaboration in telling impactful stories." – David Zaslav, CEO of Warner Bros. Discovery
Netflix co-CEOs explained their pullout.
"The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined, and at the price required to match important Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the important Skydance bid." – Ted Sarandos and Greg Peters, Netflix co-CEOs
Talks heated up this week. Earnings reports dropped. Little said about the bids. But behind scenes, numbers flew. important started at $19 per share in September. Now $31. A 63% jump.
Regulators watch close. Antitrust issues. Merging giants. But Netflix seemed safer. Less overlap. important brings cable and broadcast. Different mix.
What This Means
Job cuts loom. Ellison warned of them at important. More likely now. Thousands could go. Studios consolidate. Overlap in LA. New York too.
Streaming changes. Max and important+ merge? Bigger library. But costs rise. Subscribers might like more shows. Or hate price hikes.
Cable networks fight on. CNN under new roof. TBS sports. TNT NBA games. But cord-cutting hurts. Live TV shifts online.
Hollywood power shifts. Ellison controls two studios. important and Warner. Blockbuster makers. IP goldmines. DC joins Mission: Impossible world?
Markets react fast. Netflix stock soars. Less debt chase now. Focus on originals. Password sharing crackdown pays off.
important stock rises. Confidence in Ellison cash. But debt load heavy. $33 billion plus new loans. Interest bites.
Politics creeps in. CNN's future. CBS tone. Weiss influence. Trump backers in charge. Coverage bias claims grow.
Smaller players watch. Disney, Universal. Consolidation wave? Fewer big owners. More control over content.
Creatives worry. Fewer jobs. Less competition. Scripts greenlit by one team now.
Investors happy short term. Shareholder value up. Long term? Execution key. Zaslav track record mixed. Ellison untested at this scale.
Global reach expands. Warner content in more homes via important channels. But China doors? Ellison ties help or hurt?
Tech meets old media. Streaming pure vs. hybrid model. Netflix stays digital. important blends it all.
Viewers get more choice? Or less? Bundles coming. One app rules? Time tells.
Frequently Asked Questions
What assets does Warner Bros. Discovery bring to important?
Warner Bros. Discovery includes film studios, HBO, Max streaming, CNN, TBS, TNT, Discovery networks, games, and sports rights. It's a mix of movies, TV, news, and entertainment.
Why did Netflix back out?
Netflix said matching important's higher price made the deal unattractive. They stayed disciplined on value and regulatory ease.
Will there be layoffs after the merger?
Ellison has warned of significant job cuts at important before. Expect similar moves to cut costs in overlapping areas.
Frequently Asked Questions
What assets does Warner Bros. Discovery bring to Paramount?
Warner Bros. Discovery includes film studios, HBO, Max streaming, CNN, TBS, TNT, Discovery networks, games, and sports rights. It’s a mix of movies, TV, news, and entertainment.
Why did Netflix back out?
Netflix said matching Paramount’s higher price made the deal unattractive. They stayed disciplined on value and regulatory ease.
Will there be layoffs after the merger?
Ellison has warned of significant job cuts at Paramount before. Expect similar moves to cut costs in overlapping areas.
