Warner Bros. for sale, D2D with new owner?

[by96]

Trump is now officially on camera saying he's personally going to get involved. Let's be honest. The legality or ethics of any of this don't matter at this point. My guess is his "getting involved" means he told Larry to put in a competitive bid and he'd make it happen, provided the donation is enough. It doesn't matter one bit how he felt about the Netflix head or what he said in November. There's one thing that will decide where WB ends up and it has everything to do with greasing the wheel.

100%

 

[by96]

Trump is now officially on camera saying he's personally going to get involved. Let's be honest. The legality or ethics of any of this don't matter at this point. My guess is his "getting involved" means he told Larry to put in a competitive bid and he'd make it happen, provided the donation is enough. It doesn't matter one bit how he felt about the Netflix head or what he said in November. There's one thing that will decide where WB ends up and it has everything to do with greasing the wheel.

I was actually going to say something in my post above about how whatever Trump said in November is meaningless moving forward, but I decided to avoid anything semi political. But I 100% agree.

 

[cinelife]

Thanks for keeping politics out of the discussion, corruption is fine, just no politics. Being serious, for those that reached out because Trump was named in a post above, there is nothing wrong with mentioning his involvemnt, the Feds are involved in these matters already, and to some extent the leadership tied to the current administration will be involved, that's true for any administration.

Regarding Paramount's "offer," I'm unable to comment publicly for personal reasons, but shareholder approval is required, the Board alone cannot approve the sale. Shareholder's tend to want the highest per share price they can get, but there may be other considerations in the terms that effect their decision. We'll see if Paramount's offer changes anything.

Jim

 

[Aburguy]

Chat GPT just made me feel a lot better on how bullet proof Kscapes business model is.

 

[OCD2]

The way I see this playing out is cash is king so those who own the majority of the shares will prevail including the Warner executives and institutional investors and most will probably elect to take the cash. The enormous debt may scare away people from the Netflix deal, as they may not want to wait or take a chance that Netflix can handle the debt without their stock taking a hit.

Regardless, users can expect streaming app fees to go up significantly. Other than those at the negotiation table, no one knows how long the existing agreements between K and the studios will be legally "locked-in."

 

[dnoonie]

Warner Bros. Discovery Rejects Paramount’s Bid

Warner Bros. rejects Paramount's hostile bid, accuses Ellison family of failing to put money into the deal

Paramount fired back that the Ellison family did provide the needed guarantees and pointed to Larry Ellison's long business record. Paramount said it would continue with its hostile takeover of Warner.

www.latimes.com

Warner Bros. Discovery recommends investors reject Paramount's hostile takeover bid

The company's board said in a statement Wednesday that it determined that the Paramount offer "is not in the best interests of WBD and its shareholders."

www.nbcnews.com

Happy movie viewing!

 

[cinelife]

We'll see.....a lot happening in the background.

Jim

 

[JackT]

2024 home video revenue estimates had the following breakdown: Digital Sales 4.1%, Digital Rentals 2.9%, Physical Product 1.7%. The remaining 91.3% is streaming, which Netflix is already a part of. So, killing the portion of WB that's in the 7% would likely seem like nothing to Netflix and just good business sense.

Pretty incredible that physical media is less than half of digital sales, considering it seems like digital sales are fairly “rare”. I guess more people are buying films on Apple TV, Amazon, etc than I expect.

 

[JackT]

Chat GPT just made me feel a lot better on how bullet proof Kscapes business model is.

Although it is a great product, it is only one release away from one of the very mainstream companies, such as some sort of “Apple TV Pro” or “Amazon Fire Pro” or something that offers the same sort of product and it could be in jeapordy. Once we are in the realm of 8k and physical media is gone that is when I think there would be the highest chance of a K competitor appearing. After seeing stats posted previously though where even digital purchases are less than 5% total home video revenue these days, none of the “big boys” may ever think it’s worth the return to move into K’s business model space.

On topic of WB, I really hope this deal gets shot down. The big streaming exclusive companies getting even more of a monopoly seems like a negative for the whole industry no doubt.

 

[LoveCinema]

I guess more people are buying films on Apple TV, Amazon, etc than I expect.

Yes, between sales and rentals premium video on demand is well over 4x bigger than physical.

Some recent examples:
The Super Mario Bros. movie was a huge hit on physical shifting 1.4M discs and generating just under $30M over its life.
Wicked generated $26M on its first day of digital sales and over $70M in its first week.

As a studio, that really starts to make you think… Super Mario required publishing discs in multiple formats, producing them internationally and importing for distribution, distributing to various vendors including potential physical exclusive packaging, etc. To make substantially more on digital, you provide the mezzanine files to licensees. Hmm, this whole “physical is dying” thing starts to make sense.

Digital is getting stronger and physical is getting weaker. I believe as physical contracts to limited releases we may see digital sales increase before ultimately succumbing to streaming.

 

[JackT]

Yes, between sales and rentals premium video on demand is well over 4x bigger than physical.

Some recent examples:
The Super Mario Bros. movie was a huge hit on physical shifting 1.4M discs and generating just under $30M over its life.
Wicked generated $26M on its first day of digital sales and over $70M in its first week.

As a studio, that really starts to make you think… Super Mario required publishing discs in multiple formats, producing them internationally and importing for distribution, distributing to various vendors including potential physical exclusive packaging, etc. To make substantially more on digital, you provide the mezzanine files to licensees. Hmm, this whole “physical is dying” thing starts to make sense.

Digital is getting stronger and physical is getting weaker. I believe as physical contracts to limited releases we may see digital sales increase before ultimately succumbing to streaming.

TBH I personally don’t have a huge problem with a subscription based service if the quality of the offerings were better than they currently are. With so many films spread across various platforms it just feels hard to even consume the media that you want to consume. Say you wanted to watch every movie in a particular series, like the terminator. You may have to go to multiple streaming sites to fully encompass watching all of the films. It is just a hassle. Not even considering the quality hit vs disc or Kscape. I feel like the whole industry has come to a place where people are willing to pay to watch what they want, but the actual access itself has become such a pain. I never support piracy or condone the behavior, but it seems so backwards when that seems like the most “seamless” experience to consume media is a forbidden one.

It would just be so nice if there was some sort of platform or format out there where let’s say you want to buy every film by a certain director to go down a certain binge, you just type in their name, and could buy them all on the spot without having to navigate this whole tangled web of services and certain films being licensed to service X and other ones behind tied to Y that we have now. I mean Apple seems to be relatively comprehensive on licensing agreements, and from what I look at on the k store it seems to be as well. I don’t know if once physical is completely dead if that will change anything or not. I think the next 10 years of this industry will be very interesting to see how it pans out.

 

[dnoonie]

TBH I personally don’t have a huge problem with a subscription based service if the quality of the offerings were better than they currently are. With so many films spread across various platforms it just feels hard to even consume the media that you want to consume. Say you wanted to watch every movie in a particular series, like the terminator. You may have to go to multiple streaming sites to fully encompass watching all of the films. It is just a hassle. Not even considering the quality hit vs disc or Kscape. I feel like the whole industry has come to a place where people are willing to pay to watch what they want, but the actual access itself has become such a pain. I never support piracy or condone the behavior, but it seems so backwards when that seems like the most “seamless” experience to consume media is a forbidden one.

It would just be so nice if there was some sort of platform or format out there where let’s say you want to buy every film by a certain director to go down a certain binge, you just type in their name, and could buy them all on the spot without having to navigate this whole tangled web of services and certain films being licensed to service X and other ones behind tied to Y that we have now. I mean Apple seems to be relatively comprehensive on licensing agreements, and from what I look at on the k store it seems to be as well. I don’t know if once physical is completely dead if that will change anything or not. I think the next 10 years of this industry will be very interesting to see how it pans out.

I really liked physical media until about 2018-2019 when I started having delivery problems and disks that wouldn't play. I'd get deliveries where the disk case was damaged, a digital code was missing and disks that wouldn't play properly. This, combined with the lower cost of entry for the Strato E is what got me to move to digital delivery. Managing digital delivery still has it's issues but the solutions, such as finding Extras content, only involve one person, where as getting a replacement disk involves multiple people, and depending on where the disk was purchased, simply isn't possible.

The handful of disks with playback problems where some of my first purchases costing me less than $50 in D2D charges, much easier than getting a replacement disk. The two I remember off hand were TENET and Dungeons & Dragons: Honor Among Thieves.

Oh, and upgrading from 1080p to UHD has been great for the studios offering a $5 D2D!!!

Happy movie viewing!

 

[dnoonie]

Here's the latest info:

Netflix ‘plans to switch to all-cash offer to seal $83bn Warner Bros deal’

Aim is to speed up acquisition of WBD studio and streaming businesses and hold off rival Paramount bid

www.theguardian.com

There is bound to be more back and forth with this but here's the bottom line: Netflix changed their offer to $83bn CASH, Paramount is putting together a new $108bn offer, I'd speculate that there will be more cash/less debt involved.

10 more WB D2D titles to go!

Happy movie viewing!

 

[dnoonie]

Paramount does a new sales pitch, extends deal expiration to Feb 20.

Paramount outlines plans for Warner Bros. cuts

Should it win the battle for Warner Bros., Paramount said it would review real estate holdings, cut duplicative jobs and shave programming expenses to achieve $6 billion in savings.

www.latimes.com

Some highlights:

“We are very focused on maintaining the creative engines of the combined company,” Paramount said in its marketing materials for investors, which were submitted to the SEC on Monday.

“Our priority is to build a vibrant, healthy business and industry — one that supports Hollywood and creative, benefits consumers, encourages competition, and strengthens the overall job market,” Paramount said.

Paramount also added a dig at Warner management, saying: “We expect to make smarter decisions about licensing across linear networks and streaming.”

Some analysts believe Paramount may have to raise its bid to closer to $34 a share to turn heads. Paramount last raised its bid Dec. 4 — hours before the auction closed and Netflix was declared the winner.

Finished up my WB D2D purchases!

Happy movie viewing!

 

[SJHT]

 

[dnoonie]

Yep, if this were a movie it would be pretty boring and tedious...

During the recent congressional hearing the movie making Guilds made statements, some inconclusive such at the Directors Guild

Christopher Nolan Weighs In On Who Should Own Warner Bros, Job Cuts: DGA Boss Says “The Loss Of A Major Studio Is A Huge Blow”

Christopher Nolan spoke with reporters about the DGA's concerns about the potential sale of Warner Bros. to Netflix or Paramount.

deadline.com

Sounds like these folks are trying to come up with some ideas to address concerns
And the Guilds as a whole came up with a list of concerns that they would like to be addressed...

Hollywood Guilds Raise Concerns With Senate Antitrust Subcommittee Over Warner Bros. Sale Amid Netflix Congressional Hearings

The WGA, PGA and DGA all submitted prepared testimony to the Senate antitrust subcommittee regarding the potential sale of Warner Bros.

deadline.com

The nine concerns are:

1. How will the sale affect audiences: what stories consumers get to see, where they can watch them, and at what price and over what timeframe they will be available?
2. How might merger conditions protect consumers, American workers, and the American communities that depend on film and television production if the buyer maintains and operates WBD’s divisions independently following the acquisition?
3. How might merger conditions protect consumers, American workers, and the American communities that depend on film and television production if the buyer must continue to commission, license, distribute, and market films and television from third-party producers at current levels?
4. How might merger conditions protect consumers, American workers, and the American communities that depend on film and television production if WBD’s divisions continue to produce film and television for third-parties after the sale at current levels?
5. How might merger conditions protect the communal experience of watching movies in theaters and the moviegoing experience as a vital community hub and means of strengthening neighborhood connections if the buyer must commit to a significant theatrical exhibition window?
6. How might the marketplace benefit if the buyer must develop, as other media companies currently maintain, the capacity to negotiate and price internal licenses at fair market values as if negotiations were happening at arms-length between competitors?
7. If WBD’s news and sports divisions remain part of the combined company, how should collective bargaining rights be protected in the new entity?
8. What conditions might mitigate the likelihood of the buyer looking to offshore production to reduce costs, especially to relieve debt?
9. How will the sale affect the pipeline for workforce training programs and small- and mid- size productions that train the next generation of filmmakers?

Happy movie viewing!

 

[LoveCinema]

One of the fascinating things I see repeatedly brought up lately is Warner's "45 Day Release Window" with theaters. "This is the agreement." "This is already in place." "We will honor this." "I vow to keep the existing 45 day release window."

Um, would this be the 45 day release window that sees most Warner titles released just over 30 days after their theatrical release? Is the "window" give or take (but always take) 10+ days? Warner definitely keeps their movies in theaters for 30 days before releasing them digitally. In fact, it's generally 32 days or so. Take the theatrical release, add four weeks, then add four days to get from Friday to Tuesday. There's your "window."

Anyone remember when Warner tried to release Mickey 17 just over two weeks after its theatrical release, pulled it at the last minute, then delayed it two more weeks to get it to just over 30 days? Yeah, me neither. (Ironically, this was 17 days after the theatrical release, the same 17 day window Warner has allegedly been pursuing with theater owners.)

I mean, seriously, does not a single reporter look up a single title??? Superman, Warner's biggest headline-owning tent-pole summer-superhero extravaganza arrived on digital 35 days after its theatrical premiere. (This was actually longer than usual, as Warner held the digital release for Friday rather than Tuesday.)

Warner is obviously working with a 30 day window, and all of this is PR fluff to try to smooth the transition. There's no evidence that Warner is bound by a 45 day theatrical window contract today, nor that Netflix will be after the acquisition. But, let's just keep saying it like it's a thing.

Rest assured consumers... Netflix will keep Warner's 45 day theatrical window. You will still be able to buy discs. You will still be able to own movies. They won't remove catalog titles from digital stores or services. Everything is ok. Just relax. Shhh...

 

[Transepoch]

Rest assured consumers... Netflix will keep Warner's 45 day theatrical window. You will still be able to buy discs. You will still be able to own movies. They won't remove catalog titles from digital stores or services. Everything is ok. Just relax. Shhh...

Makes sense. It worked so well for WB management to-date, why should we expect things to change?

 

[gadgetman]

Netflix passes on deal to acquire WB after Paramount's revised offer. Stock up another 8 points after hours.

 

[LoveCinema]

I'm sure it'll be some time before we can determine all of the ways consumers lose in this scenario versus all of the ways consumers lose in the alternate scenario.