Netflix Says WBD Split Was About Money, Not Trump
Synopsis
Netflix walks away from a deal to buy Warner Bros Discovery, essentially saying the price got too high. CEO Ted Sarandos said the step was a good business decision and not political pressure. Although Donald Trump had voiced his opinions about the deal, Netflix kept its attention on the cost. Now a huge deal has put the studio in Paramount’s hands. Netflix will pay up big bucks to leave and continue building around its own streaming growth.
After a prolonged bidding war, Netflix has made the final decision not to purchase Warner Bros. The top executive at Netflix, Ted Sarandos, says it’s a financial decision not a political one. And even though Donald Trump urged him to do so, the primary reason was that it became too expensive.
Key Highlights
- Netflix chose not to purchase Warner Bros at all due to the cost being too high.
- Netflix’s chief says the decision was based on money, not politics.
- Donald Trump counselled the Netflix executive against overpaying for the movie studio.
- Netflix will no longer buy Warner Bros; that mantle will be placed on another company, Paramount.
- If Netflix backs out of the deal, it will be forced to cough up a hefty exit fee of around $3 billion.
Netflix Refuses to Buy a Major Movie Studio
Netflix had been eyeing Warner Bros for a long time. They wanted to control the people who make movies like Harry Potter and shows on HBO. But a different company, Paramount, bid much more to buy it instead.
Netflix executives took one look at the new price and decided it was awfully pricey. They said they wanted the studio only at a fair and sensible price. So after the price ballooned, they walked away and let the other company take it.
What Donald Trump Do With It
Some wondered whether politics contributed to Netflix’s decision to end the deal. Donald Trump had recently said some harsh things about Netflix on the internet. He even instructed them to fire a certain individual from their board of directors.
But the Netflix chief said his conversation with Donald Trump was really pretty straightforward. The president had urged him not to overpay for the new business, he said. The boss explained to Trump that when Netflix walked away, the company followed that advice and saved money.
The Breach of Warner Bros: Paramount Wins
With Netflix now on the sidelines, it’s Paramount who takes home the prize for the big battle. That is more than a hundred billion dollars for the entire company. That means Paramount soon will control many more TV channels and movie brands.
The Netflix executive believes new owners will need to dramatically cut costs. They may have to save sixteen billion dollars for the deal to go through, he believes. Fewer jobs could mean fewer movies being made by that studio in the future.
What Happens Next for Netflix and Viewers
Netflix is not mournful over the loss of this deal; its success continues to grow. They are receiving a special payment of $2.8 billion simply because the consummation did not occur. That extra money will help Netflix continue producing its own original shows and movies.
For movie watchers, next year may see a slight shift. Together, Paramount and Warner Bros will form one massive company, something that could shake up what shows you actually get to see. Just a month or two earlier, Netflix said it would remain focused on being the best place to watch videos online.
FAQs
- Why did Netflix give up on buying Warner Bros?
The cost became too high, and Netflix didn’t want to pay a lot.
- Did Donald Trump cause Netflix to cancel the deal?
No, but he did counsel the Netflix boss against paying too high a price.
- Who will buy Warner Bros. now?
Paramount is going to purchase them for over $110 billion.
- Does Netflix receive any money for exiting the deal?
The answer is yes, Netflix will get a breakup fee of $2.8 billion for walking away.
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