Just over the weekend after Netflix announced it would acquire Warner Bros. for a total of approximately $72 billion, Paramount Skydance has steadfastly presented its shareholders with a much larger all-cash offer valued at $108.4 billion. The deal will be “backstopped” by the Ellison family and Redbird Capital, in addition to debt “fully assumed” by Bank of America, Citi and Apollo.
Paramount Chairman and CEO David Ellison asserted, “We believe our proposal will create a stronger Hollywood, which is in the best interest of the creative community, consumers and the movie theater industry. We believe they will benefit from increased competition, increased content spending and theatrical releases, and an increase in the number of movies shown in theaters as a result of our proposed transaction.”
Although not mentioned in the press release, Affinity Partners, the private equity firm owned by Donald Trump’s son-in-law Jared Kushner, is one of the companies backing the new bid, along with several sovereign wealth funds from Saudi Arabia, Abu Dhabi and Qatar, Axios reports. Saudi Arabia and Affinity previously partnered on the acquisition of Electronic Arts, and Mr. Ellison’s father, Larry, is a big supporter of Mr. Trump.
Incidentally, Netflix co-CEO Ted Sarandos reportedly met with President Trump to discuss a possible acquisition of Warner Bros. and was under the impression that Trump would approve the deal. However, President Trump reportedly said this weekend that Netflix’s subsequent increase in market share “could be an issue” and said he would be involved in the decision to approve the deal.
Regardless of the outcome, it remains unlikely that many critics will change their minds about Warner Bros. being acquired by another movie studio. Last week, Sen. Elizabeth Warren issued a statement calling the Netflix partnership an “anti-monopoly nightmare” and reminding readers of the “obvious political favoritism in the Trump administration’s response to media mergers.”
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