Paramount Skydance has directly gone with an offer to Warner Bros Discovery’s shareholders in order to gain control of the media and entertainment company ahead of streaming giant Netflix, as per a BBC report.
For context, Paramount Chief Executive David Ellison has launched a hostile takeover bid, which essentially means that Paramount has moved forward with its latest offer without taking Warner Bros. management’s consent into account. Importantly, it differs from a friendly takeover, which is mutually agreed upon by the boards of directors and shareholders of both companies
Notably, Netflix announced last Friday that it is acquiring Warner Bros’ studio and streaming networks for almost $83 billion. However, competition regulators both in the United States and Europe are expected to review the global streaming giant’s bid.
Why Does Paramount Want to Buy Warner Bros Discovery?
Paramount is looking for a partner that will offer it scale and enable it to compete against entertainment industry giants such as Netflix and Disney. Furthermore, a takeover in this case would build on Ellison’s purchase of Paramount, which he eventually merged with his Skydance film studio.
Elsewhere, from a streaming perspective, Ellison is looking to add HBO Max’s almost 120 million streaming customers to Paramount’s existing 79 million subscribers.
If the Paramount bid is indeed successful, it can potentially translate into benefits for traditional pay TV networks, giving them greater leverage in business negotiations and presenting cost-saving opportunities.
For context, Paramount’s traditional networks include brands such as Nickelodeon, CBS and Comedy Central, while Warner Bros would bring CNN, the Food Network, etc.
How Will The Warner Bros Ownership Tussle Affect JioHotstar?
In the Indian context, either of the Netflix or Paramount bids going through successfully might have spillover effects for the JioStar media and entertainment conglomerate. For context, JioStar is a joint venture between Reliance (Viacom 18) and Disney, which owns and operates the JioHotstar over-the-top (OTT) platform within India.
At the time of writing, JioHotstar hosts a variety of content from the Paramount+ platform, such as the Transformers films, the Indiana Jones saga, as well as Tom Cruise’s Mission Impossible and Jack Reacher films. At the same time, the India-focused OTT platform also hosts a plethora of HBO-licensed content, such as the Game of Thrones series, The Sopranos, The Penguin, etc.Â
In this light, if the latest Paramount bid is successful, the chances of Jio Star going to the discussion table for HBO-specific content remain slim. Meanwhile, if Netflix does get its way in this ownership battle, Jio HotStar will likely have to renegotiate the content licensing agreement for HBO’s content. Whereas, in the worst-case scenario, all HBO-specific content might migrate from Jio HotStar to Netflix…
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