In a terrible lesson to whiny billionaire sons everywhere, Warner Bros. Discovery has shown that if you lose the auction for a legacy media empire, you simply light a small public fire and add $1.
To recap: Netflix has a signed deal for WBD’s streaming and studio businesses, complete with matching rights and all the legal bubble wrap money can buy. Paramount Skydance lost that bake-off, then stomped its feet for weeks and pivoted to a hostile $30-per-share tender offer aimed straight at WBD shareholders. Translation: if the board won’t pick us, maybe the maddening crowd will.
On Tuesday, WBD announced that Netflix has granted a seven-day waiver so WBD can reengage with Paramount to address “deficiencies” in its offer. Deficiencies is doing Oscar-worthy work here. Paramount has insisted $30 wasn’t its “best and final,” which is corporate for “we’re still negotiating with ourselves.” It recently offered “enhancements” that avoided the one enhancement everyone cares about: more cash.
Now comes the gossip. A senior Paramount rep reportedly told a WBD board member it would pay $31 per share if talks reopen. One dollar. In a multibillion-dollar transaction. Somewhere, an investment banker just billed $2 million to discover couch cushions.
Mechanically, this is high finance. Netflix keeps its matching rights after the seven days. WBD gets to say it’s maximizing value and certainty for shareholders. Zaslav delivers a statement that sounds like it was focus-grouped by a chatbot made from a fiduciary duty legal textbook. Netflix calls Paramount’s campaign “antics,” which is as hard as one can throw shade in an SEC filing.
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The shares of both Paramount and WBD popped about 3% in premarket trading, because nothing excites Wall Street like two moguls arguing over a dollar while everyone pretends this is about long-term strategy.
The March 20 shareholder meeting is circled in red. Netflix wants closure. Paramount wants drama. WBD wants optionality and plausible deniability.
The takeaway for the billionaire sons watching from their inherited board seats: lose gracefully and you look weak. Lose loudly, add $1, call it superior value, and suddenly you’re a protagonist.
Showbiz.
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