Netflix shocked the entertainment world this week by refusing to increase its bid for Warner Bros. Discovery, setting the stage for Paramount Skydance to take ownership of the Hollywood studio.
At the time, Netflix co-CEOs Ted Sarandos and Greg Peters said they were facing financial discipline. Now, a report from Bloomberg provides more details about why Netflix executives backed out of a bidding war they appeared to win in December.
For starters, the streaming giant’s shareholders were deeply skeptical that the acquisition was a good deal. While Netflix’s stock price fell 30% after announcing the deal, news of the subsequent withdrawal sent the company’s stock up nearly 14%.
In another example, Netflix’s commitment to the deal reportedly wavered after Paramount put forward a higher offer and seemed willing to go several further steps in a bidding war.
Sarandos may have already decided to concede when he meets with Trump administration officials on Thursday. In fact, President Donald Trump had previously warned him not to overpay, so Sarandos allegedly told him, “I took your advice.”
Meanwhile, Warner Bros. employees are now worried about layoffs at major studios and conservative political pressure on CNN.
