Question: When does a social media posting amount to a dire warning?
Answer: When the president reposts an old OANN editorial in the middle of your big Hollywood acquisition. Perhaps especially when you spent months trying to woo said president and thought you had succeeded.
Ted Sarandos has found himself in a dogfight with David and Larry Ellison over Warner Discovery. Sarandos had thought he could peel the studios and the streaming businesses from WBD and leave the less-lucrative cable channel business to WBD shareholders. The Ellisons launched a competing bid for the whole enchilada, and Trump has hinted ever since that his friendship with Sarandos may not go so far as to make him comfortable with the Netflix acquisition ... while insisting that his administration will have the final word on any sale of WBD.
Last month, the WBD board told its shareholders to pass on the Ellison/Paramount bid, even though it offers a better payout. Paramount reaffirmed its bid late last week and challenged the board to explain why shareholders should accept less from Netflix:
Paramount Skydance, in a Thursday statement, sidestepped Warner’s latest complaints about the enormous debt load that Paramount would need to pull off a takeover. Paramount instead said the appeal of its bid should be obvious: $30 a share in cash for all of Warner Bros. Discovery, including its large portfolio of cable channels, including CNN, HGTV, TBS and Animal Planet.
Warner board members have countered that Netflix’s $27.75 cash and stock bid for much of the company is superior because Netflix is a stronger company. Warner also has complained that it would have to incur billions in costs, including a $2.8-billion break-up fee, if it were to abandon the deal it signed with Netflix on Dec. 4. ...
Paramount is gambling that Warner investors will evaluate the two offers and sell their shares to Paramount. Stockholders have until Jan. 21 to tender their Warner shares, although Paramount could extend that deadline.
The Netflix transaction offers Warner shareholders $23.25 in cash, $4.50 in Netflix stock and shares in the new cable channel company, Discovery Global, which Warner hopes to create this summer.
The deadline seems particularly relevant to Trump's post on Truth Social yesterday. Trump spent the morning reposting links to supportive articles about Trump's interests, as well as a picture of the entrance to Mar-a-Lago. In the middle of that run, though, Trump also posted about Netflix and its woke "cultural takeover":
The link leads to an op-ed by John Pierce at OAN from almost exactly a month ago, which criticized Netflix and its attempt to acquire WBD. Pierce questioned why the WBD board wants its shareholders to accept a lower price for an acquisition, and argued that Netflix's commitment to progressive narratives is the real value:
Regulators must now confront an uncomfortable possibility: that WBD’s board rejected a financially superior offer because Netflix was the woker, ideologically preferred buyer. If true, that raises serious questions about whether the board has honored its basic duty to shareholders.
At the same time, merging WBD’s vast film and television library into Netflix would weaken competition in both streaming and content markets and concentrate cultural power in ways fundamentally at odds with the diversity of voices a free nation needs to survive. On these grounds alone, this merger should be stopped.
Culturally, the danger is stark. Netflix already holds enormous influence over America’s imagination. Its opaque algorithm determines what tens of millions of viewers see each night, shaping trends, tastes, and narratives with no accountability. Industry reporting shows the merger would give Netflix even greater leverage over release windows, pricing, and labor negotiations — with fewer competing studios for creators to turn to.
Handing this machine control over Warner’s franchises and future output would allow one company to rewrite characters, retell history, redefine social norms, and control which ideas reach audiences.
Will regulators confront that "uncomfortable possibility"? Hard to say, but when their unitary-executive boss reposts the op-ed that calls on them to do so, we can at least assess the possibility as, er ... likely. Whether that's a good use of executive authority is an entirely different question. And the answer is: No, it's not. Antitrust decisions should not be influenced by politics and cultural concerns; instead, they should be based on the law and objective market distortions. The true approach in this case is that regulators should approach either acquisition with a great deal of skepticism, as Hollywood studio consolidation concentrates economic power into fewer and fewer hands, which ironically makes political manipulation easier in either case.
The world being what it is, though, Trump is making it pretty clear that the Netflix deal will run into massive regulatory headwinds. Shareholders who have to make decisions in the next nine days now can choose between a months-long legal fight to end up with less money and some cable channels no one really wants, or more money and a quick payday. Wonder which bid looks a little more attractive today?
Netflix has resisted the obvious step of putting together a matching bid. They may need to sharpen pencils this week, if they can even get financing for such a bid. They might also consider addressing the issues that have conservatives seeing red over their woke content. Sarandos may have thought he'd headed off that issue with his personal connection to Trump. Netflix needs more than one Plan B, apparently.
Update: Paramount has not decided to let its offer speak for itself. The WSJ reports that they are launching a proxy fight, and have also sued WBD to get full transparency on their position:
Paramount Skydance plans to launch a proxy fight for board seats at Warner Bros. Discovery, the company said Monday, as it continues pushing its hostile bid for the company.
Paramount also filed a lawsuit seeking to force Warner to release more information about its merger agreement with Netflix. Paramount has long argued its offer, which Warner repeatedly rebuffed, is superior in value to Netflix’s.
Warner “has provided increasingly novel reasons for avoiding a transaction with Paramount, but what it has never said, because it cannot, is that the Netflix transaction is financially superior to our actual offer,” Paramount said.
The suit takes aim at a particular clause in the Netflix deal:
Paramount’s lawsuit, filed in Delaware, seeks to force Warner to release information about how it valued the Netflix transaction and how it values the networks business. It also seeks information on a clause in the Netflix deal that would allow for a reduction in purchase price if Warner restructures its debt, asking how it might work.
Hmmm. Stay tuned and pass the popcorn, because contra Porky Pig, that ain't all, folks.
Editor’s Note: Thanks to President Trump and his administration’s bold leadership, the Left's attempted radicalization of American culture has stalled – for now.
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