Media giants submit second round bids for WBD
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Netflix, Paramount and Comcast all submitted second-round bids to Warner Bros. Discovery's board Monday, as the race to acquire Hollywood's hottest available asset closes in.
Why it matters: WBD's board now must weigh any potential regulatory hurdles presented by each bid against its business value.
- Regulatory probes could take many months to settle, delaying a deal while the streaming market becomes even more competitive.
State of play: Paramount was seen as an early front-runner after WBD announced it was formally open to a possible sale, but the narrative has changed in recent days.
- Netflix, sources say, has touted its access to capital, as well as having access to "clean money" in the wake of reports that suggest other bidders may be in talks with Middle Eastern sovereign wealth funds to finance their offers.
- Bloomberg reported Monday that Netflix submitted a mostly cash offer for WBD's studio and streaming assets. A source confirmed to Axios that Netflix's bid does include some stock.
- Paramount was under pressure after the first round of bids to increase the amount it would pay per share closer to $30. Sources say it did present a more competitive bid in the second round, which includes debt financing from Apollo Global Management.
- The firm also is reportedly in talks with Middle Eastern sovereign wealth funds to help finance its bid.
- Comcast, like Netflix, submitted a second-round bid solely for WBD's studio and streaming arm.
- Comcast is generally perceived as having a more challenging regulatory outlook than Paramount or Netflix, although any Justice Department suit to block the deal would need to be evaluated by an independent judge in court.
Zoom out: All bids are likely to receive regulatory scrutiny, although antitrust experts don't believe it would be impossible for any of the three suitors to prevail, should the DOJ sue to block a deal.
- Netflix's biggest regulatory hurdle could be concerns over the size of its more than 300 million global subscriber base coupled with HBO Max.
- Paramount and Comcast could face scrutiny over the combination of their movie studios with Paramount Pictures.
The intrigue: A recent meeting between Trump administration officials discussed antitrust concerns around a Netflix bid, sources told Axios.
- The meeting, which was first reported by the New York Post, suggests Comcast isn't the only bidder that would face scrutiny from the White House.
- Any deal would also need the blessing of European regulators, who tend to apply extra scrutiny to Big Tech companies. Comcast owns Sky News, a major player in the U.K.
- Representatives from Comcast, Paramount, Netflix and WBD did not comment.
What's next: The company is hoping to make a decision about whether to accept a bid or continue its original plan to split by year's end.
