The future of Warner Bros. Discovery hinges on European regulators’ approval of the Netflix deal. WBD owns valuable U.S. sports rights, including March Madness, MLB, NHL, and more. Netflix’s $27.75/share offer excludes cable networks with sports rights, which may go to a separate entity if deal is approved.

Paramount’s $30/share hostile takeover bid for WBD includes cable networks and sports rights. WBD board rejected Paramount’s offer. Paramount extended its deadline for shareholders to consider the bid. Only 7% of shareholders have tendered their shares to Paramount. WBD remains confident in its merger deal with Netflix.

European regulators will also weigh in on the Netflix-WBD deal. Netflix generates 32% of its revenue from the EMEA region. WBD is confident about EU approval, while Paramount believes Netflix deal faces hurdles. EU may have concerns about the impact on local content production and movie theater industry.

Recent history shows EU’s tough stance on tech companies. Paramount executives believe EU will view Netflix as a Big Tech threat and block the deal. EU may prioritize supporting movie theater owners for cultural reasons. U.S. and European cinema associations have expressed concerns about the Netflix-Warner merger.

Netflix reassures that Warner Bros. films will still have a 45-day theatrical window. Netflix and WBD are working with regulatory authorities for approval. Netflix confident in securing all necessary approvals for the deal to close. The deal would create a global entertainment powerhouse with a strong theatrical distribution business. The WBD board sees merging with Paramount and Warner as a bigger regulatory challenge than Netflix. However, both deals are expected to gain approval. Paramount’s ability to produce 30 movies a year while managing debt and cost savings concerns WBD. Netflix changed its offer to all cash, potentially moving the shareholder meeting to March.

Paramount is contemplating increasing its bid or changing the capital structure to win over WBD. Paramount executives argue Discovery Global’s value is $0 due to high leverage ratios. WBD values Discovery Global between $1.33 to $6.86 per share. Adobe corrected it did not acquire Figma for $20 billion.

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