Chapter 1: What sparked the bidding war for Warner Bros. Discovery?
One of the biggest dramas in Hollywood in the past year has been the fight over Warner Brothers Discovery.
Warner Brothers Discovery announced today that it is putting itself up for sale.
Paramount made three bids to buy the company over the past couple of weeks here. It first offered $19, then raised that to $22. Warner Brothers Discovery has entered exclusive negotiations to sell its film and TV studios and HBO Max streaming service to Netflix.
Chapter 2: How did Paramount's bids evolve during the acquisition process?
In December, Warner announced that it had accepted Netflix's offer of $72 billion. The Warner Brothers bidding saga seemed to finally come to an end. Only Paramount still refused to take no for an answer. Tonight, a plot twist in a Hollywood blockbuster deal.
Paramount Skydance is challenging Netflix with their own offer to purchase.
Chapter 3: What strategies did Paramount use to compete with Netflix?
Our colleague Joe Flint has been following the whole story.
Netflix had a deal with Warner, but Paramount refused to throw in the towel. And they kept coming back with more offers. And even though none of these offers they were making were really moving the needle for Warner, they were making offers. They were lobbying lawmakers to argue against Netflix.
Chapter 4: What does David Ellison's offer reveal about Paramount's ambitions?
They clearly were not going down without a fight. And finally, last week, they made an offer to borrow from a Paramount classic, an offer that Warner couldn't refuse.
That offer was the ninth one from Paramount Skydance's CEO, David Ellison. What does this tell you about how important this deal was to Paramount?
This deal is almost, one could say, was a make or break for the whole Ellison strategy.
Chapter 5: How does the merger impact the future of streaming services?
And they felt that Paramount on its own didn't have the size and scale to compete with a Netflix, a Disney, all these other bigger players in the streaming wars. But if they could get Warner as well, and the Warner Library, and HBO Max, and the cable networks... Paramount felt they really needed Warner to have a strong hand to go up against a Disney and a Netflix.
So they really did need to have this.
Welcome to The Journal, our show about money, business, and power.
Chapter 6: What challenges will Paramount face if the merger is approved?
I'm Jessica Mendoza. It's Thursday, March 5th. Coming up on the show, how Paramount managed to snatch a last minute victory in the fight for Warner Brothers. If this were a reality dating show, Warner Brothers would have been The Bachelor, and Paramount and Netflix were the final two. And the main reason these two companies were so interested in acquiring Warner was its iconic catalog.
Chapter 7: How will the merger affect content creation for writers and producers?
If you think about, you know, the library they have, whether it's Superman.
Superman!
Harry Potter.
Harry Potter.
Gryffindor!
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Chapter 8: What does the future hold for the Ellison family in media?
Hit TV shows, Friends. I'm not great at the advice. Can I interest you in a sarcastic comment? Tons of shows, all these things which are vital to a streaming platform. For all the original programming Netflix puts on, one of the big things that they have, of course, are those old shows.
These shows that have hundreds of episodes are incredibly valuable to these streaming services who are all trying to reduce churn. They're trying to keep customers from buying it and then dropping it after their favorite show goes off the air. So the more content you have there, the more movies, TV shows, other stuff, the more likely you're willing to stick with this service.
As for Netflix, the company's strategy had always been build, not buy. But it did see a lot of upside in acquiring Warner Studios and HBO.
Netflix saw an opportunity. They recognized also the value of that library and the HBO brand. Again, they weren't interested in the cable network business, but they were interested in that. And Warner felt that Netflix was a better steward for those assets. And there was also concern from Warner Brothers about Paramount's ability to finance the deal.
Paramount already had $14 billion in debt. So Warner was skeptical that Paramount made sense as a buyer.
So there were concerns like, okay, how are you going to pay for this? You've got a ton of debt. You're a smaller company than we are. So those were some of the reasons there was animosity between the two. And it was bad. I mean, we've written stories about Paramount basically sending letters saying they felt this process was being tilted to Netflix and they weren't getting a fair shake.
But for all that, Paramount wasn't giving up. In December, after Netflix and Warner seemed to have struck a deal, Paramount made one more bid to take over the company, offering nearly $78 billion. Then, Paramount CEO David Ellison turned to his allies in Washington. Just days after making that offer, Ellison sat in President Trump's box at an event at the Kennedy Center.
And Paramount's chief legal officer oversaw a lobbying campaign that encouraged Republican lawmakers and administration officials to question Netflix's bid.
They were very aggressive from the get-go. They clearly had a strategy not only of bidding for these assets, but of making sure that whoever bid they were going up against would face a very tough time in Washington. And the Allisons have connections with the Trump White House. And Trump made clear, certainly, that he had doubts about Netflix's size and that it would face a tough review.
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