Warner Bros Discovery (WBD) shareholders have approved the $110 billion mega merger by Paramount, propelling a deal that could significantly reshape the media landscape in the US.
Warner Bros. Discovery on Thursday said that the overwhelming majority of its stakeholders voted in support of selling $31 a share. Paramount said that it will acquire 100% of WBD for $31 per share in cash, plus the “ticking fee”, valuing WBD at $81 billion in equity value and $110 billion in enterprise value.
The deal would mean that Paramount Skydance takes control of all of Warner Bros’ titles such as the Harry Potter franchise and Game of Thrones; channels including HBO Max; and news network CNN.
In a statement, WBD CEO David Zaslav said that stockholder approval marks “another key milestone toward completing this historic transaction.” Paramount added that it looks forward to closing in the coming months, and “realizing the creation of a next-generation media and entertainment company.”
However, it’s not a done deal quite yet. It still needs approval from the US Department of Justice and European competition regulators. Besides, many critics have denounced further consolidation in an industry already controlled by just a few major players, and are calling for the merger to be blocked.
The takeover saga
Paramount’s quest for Warner Bros has not been a smooth ride. The shareholders’ backing of the deal follows a dramatic months-long saga.
Late last year, Netflix intended to strike a $72 billion studio and streaming deal with Warner Bros, which the streaming service later withdrew after Paramount submitted a rival, higher offer. Paramount went directly to shareholders with a hostile bid to take over the whole company, including the cable business that Netflix did not want.
For months, the three companies fought publicly over who had the better offer on the table. But eventually, Paramount offered more money and Netflix abruptly bowed out of the race.
Implications of the deal
The merger would bring together two of Hollywood’s five remaining legacy studios under one roof. It would also join two major streaming platforms (Paramount and HBO Max) and two big names in America’s TV news (CBS and CNN ), among a bunch of other entertainment networks.
However, thousands of actors, directors, writers and other industry professionals have voiced “unequivocal opposition” to the deal. In an open letter, they have argued that further consolidation will lead to job losses and fewer choices for filmmakers and movie goers. Regulatory filings have already indicated that would include layoffs and downsizing some overlapping operations, Associated Press reported.
“A handful of powerful decision-makers should not be allowed to quietly reshape American media, culture, and creative life without accountability,” remarked Jane Fonda’s Committee for the First Amendment, an advocacy group of artistes and creators.
Meanwhile, company executives argue this will be good news for consumers as they get access to bigger content libraries, particularly if HBO Max and Paramount become one streaming service. But critics are skeptical about these benefits and have cautioned about higher prices of streaming and less diversity in content.
Besides, if the Warner takeover goes through, news channel CNN — a network that has consistently attracted President Donald Trump’s ire — is expected to see significant editorial shifts akin to CBS after coming under Skydance ownership last year.
Paramount is backed by tech billionaire Larry Ellison and led by his son David. Ellison, chairman and CEO of Paramount is a major Republican donor and reportedly hosted a dinner with Trump on Thursday at the Institute of Peace in Washington DC.