Netflix Just Avoided a Huge Headache

"The company has built up huge profits and a gigantic market share partly by avoiding businesses such as movie theaters, cable television, and 24-hour news channels. Why would it suddenly be interested in them? We may never know what Netflix had planned to do with Warner Bros. Discovery, a conglomeration that houses movie-production companies, HBO, DC Comics, CNN, and various other cable properties, such as Discovery Channel."

"But the combination of Netflix's streaming assets with the HBO Max platform's prestigious offerings, for example, would have created a force to be reckoned with in the TV world. Some analysts also thought that the Netflix co-CEO Ted Sarandos wanted to take advantage of WBD's deep media library to accelerate the streamer's AI-training efforts going forward. No matter what the strategy, Netflix's final offer of $82.7 billion was steep."

"Instead, Netflix walks away with a $2.8 billion termination fee, which has been paid by WBD's new presumptive owner: Paramount Skydance, David Ellison's company, which encompasses a streaming service, production studios, and several TV networks. The corporation will end up spending $111 billion on the takeover."

Netflix exited a monthslong bidding war for Warner Bros. Discovery, prompting an immediate stock price increase that reflected investor skepticism about the acquisition. The deal would have combined Netflix's streaming platform with HBO Max, Warner Bros. film studios, and various cable networks including CNN and Discovery Channel. Netflix's final offer reached $82.7 billion, but the combination raised regulatory concerns and questioned strategic fit. The company's success stems from avoiding traditional media businesses like theaters, cable television, and news channels. Netflix will receive a $2.8 billion termination fee. Paramount Skydance ultimately acquired Warner Bros. Discovery for $111 billion, encompassing streaming services, production studios, and television networks.

Read at The Atlantic