Paramount Skydance CEO David Ellison explained that his merger offer to Warner Bros. Discovery stockholders would save the theatrical movie business.
Ellison’s all-cash offer of $30 per share follows Netflix’s offer, which WBD accepted, for $27.75 per share. Paramount Skydance provided this offer earlier this year but “never got a response” from WBD, according to Ellison. During an interview on CNBC News’s Squawk on the Street, Ellison defended why his offer is better for Hollywood than Netflix’s.
“When you combine the No. 1 streamer with the No. 3 streamer, that creates a company that has unprecedented market power north of 400 million subscribers,” Ellison said. “The next largest competitor is Disney, with just under 200 million. That’s bad for Hollywood. That’s bad for the creative community. That’s bad for consumers. And look at how the market is reacting to this deal. We are literally seeing talent talking about the death of movie theaters.”
Ellison also insisted that his company, backed by the Ellison family, “will also be the largest investor in this deal.” The merger proposal is also backed by Redbird Capital.
Netflix co-CEO Ted Sarandos previously predicted the end of the movie theater release, saying earlier this year that theaters are “outdated.” Sarandos said Friday that they will “continue to support” a “life cycle that starts in the movie theater” for Warner Bros. movies.
“We are trying to combine the No. 4 streamer with the No. 5 streamer,” Ellison said. “When you put Paramount and HBO Max together, you get round numbers, 200 million subscribers. That creates a streaming service that is competitive with Disney.
“When you put No. 1 and No. 3 together, you are handing Netflix unprecedented market power, which is anticompetitive in every single measure, every single metric you can measure. And we think that is bad.”
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President Donald Trump signaled his disapproval of the merger between Netflix and WBD. The acquisition still must face the Federal Communications Commission for final approval. Earlier this year, the FCC approved Paramount’s merger with Skydance.
In addition, the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights is anticipated to hold a hearing on the merger, according to its chairman, Sen. Mike Lee (R-UT).
