After the merger of Paramount Skydance and Warner Bros. Discovery, concerns about possible political pressure to change the tone in relation to the current administration raise concerns about the fate of the WBD news section – predicts media expert Prof. Alicja Jaskiernia. She added that it is difficult to avoid extrapolating similar concerns regarding the future of the news part of TVN.
On Thursday, Warner Bros. management Discovery formally recognized Paramount Skydance's new offer to buy out the company as better than the one submitted by Netflix. Netflix bosses said they refused to submit a new offer. Netflix is to receive $2.8 billion. for withdrawing from the contract signed by WBD.
Media expert prof. Alicja Jaskiernia from the University of Warsaw noted that “the battle for the takeover of WarnerBros. Discovery ended on Thursday.” – Paramount Skydance is one step away from finalizing the transaction. Due to its influence on the shape of the audiovisual market in the US, it is even described as “historical”, she said.
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She pointed out that American comments are currently focused on the course of the transaction and its potential effects on the US media market. – There is surprise, even shock, at such a quick withdrawal of Netflix from the WBD game. It's not entirely clear why Netflix didn't make a final counterofferexplaining that “a deal was always something worth having if the price was right, not something you had to have at all costs,” she said. – Paramount Skydance actually presented strict purchase conditions: a valuation of USD 108 billion plus compensation and contractual penalties for failure to complete the transaction – reminded Prof. Jaskiernia.
She also pointed out that “the predictable result of the transaction will be a new division of the market, in which, next to such giants as Comcast and Disney, a powerful player will appear on the US market – and therefore on the global market – and with influence in the White House, which is no secret.” – The family of its future owner, David Ellison, has long had strong ties with Donald Trump – she added.
The shadow of politics over the media. The “Trump” factor and concerns about TVN
The media expert also pointed out that the comments emphasize two aspects of the potential merger: economic and political. Both factors – as she said – are strongly correlated.
– Paramount and Warner Bros. merger Discovery will combine both production studios and strengthen the streaming (HBO Max and Paramount+) and television (CNN and CBS) parts of the new company. In particular, the fate of the news segment (CBS News and CNN) raises concerns about possible political pressure to change the tone towards the current administration, she noted.
She pointed out that “The BBC, for example, points to “serious consequences for the future of CNN, which has been attacked by Trump in the past and present for its coverage of his politics.”. – This is confirmed by CNN itself, which calls President Donald Trump “the main X factor in the transaction” due to his clear and open support for the merger of WBD with Paramount. In the above context, it is difficult to avoid extrapolating similar concerns with regard to the future of the news part of TVN – explained the media expert.
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She also noted that “the economic aspect of the transaction raises clearly expressed concerns about the dictation of conditions on the television advertising market and subscription prices as well as the organization of film production by an increasingly smaller but more powerful group of players.”
– Despite everything, the potentially great success of the merger of both companies is not yet certain. On a long-term scale, the prospects of the new media concern, especially its television part, remain an open question due to negative trends in audience behavior. Nevertheless, the declarations and ambitions of the future owner of WBD, David Ellison, who may rise from the head of a small production company to the role of the king of Hollywood, emphasize the extensive development plans of the new corporation. It should be added that the Ellison family owns not only Paramount Skydance (David Ellison), but also the technology company Oracle (father Larry Ellison), part of the consortium that controls the American TikTok – she recalled.
Paramount offered to purchase the entire company for $31 per share (up $1 from the previous share) plus an additional 25 cents for each quarter of delay in closing the deal from October this year. Additionally, the company promised to pay USD 2.8 billion to invalidate the agreement with Netflix and USD 7 billion in compensation if the transaction is blocked by regulators.
The agreement signed by Netflix with WBD in December last year provided for the purchase of the company for USD 27.75 per share, but without the part containing television channels such as CNN, TNT, MTV or the Polish TVN. Under the agreement, these channels would remain under the control of their current owners.
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Paramount's offer concerns the purchase of the entire company and – according to media reports – was favored by the Donald Trump administration. Trump himself said that a possible transaction should lead to a change of ownership of CNN, which he accuses of bias. On Wednesday, Republican attorneys general of 11 states also spoke against the takeover of WBD by Netflix and asked the Ministry of Justice to block the transaction due to concerns about monopolization of the streaming platform sector.
Paramount Skydance is headed by David Ellison, the son of Trump-supporting billionaire Larry Ellison. Since Trump took power, the Ellisons' companies have taken control of Paramount, along with CBS, and are also part of the consortium that took control of American TikTok. In both cases, the owners were accused of interfering with the content to benefit the administration.
Netflix CEO Ted Sarandos was to visit the White House on Thursday to talk about the transaction. Last week, Trump demanded that the company dismiss former adviser to President Obama, Susan Rice, from the Board of Directors. The reason was Rice's statement criticizing corporations that “bent the knee” under pressure from the White House. (PAP)
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