David Ellison takes swipe at Netflix over ‘monopolistic’ WBD deal in open letter to UK creatives
David Ellison has penned an open letter to the UK creative community with a set of commitments he promises to fulfil should Paramount be successful in its bid to acquire Warner Bros Discovery (WBD), while taking a swipe at rival suitor Netflix.
In the letter, Ellison, Paramount’s CEO and chair since its takeover by Skydance last year, suggested its intended acquisition of WBD would create a company that provides greater choice and meaningful competition, while the already agreed merger between Netflix and WBD would be “monopolistic.”
Addressing the letter to “the British creative community, fellow film lovers and television fans, the industry at large, and all who care deeply about the future of cinema and the arts,” Ellison said: “As a producer and lifelong fan of movies and television, I am writing this open letter to speak clearly and unequivocally about the vital role visual storytelling plays in our society.
“Films and television transcend age, ethnicity, politics and socio-economic status, connecting us through shared experience. They entertain and inspire us, transport us to new worlds, preserve our history and expand our sense of what is possible. This art form is essential – and it must be protected and preserved for generations to come.
“At Paramount, these beliefs are what drive us and our pursuit of Warner Bros Discovery. We see an extraordinary opportunity to bring together our two celebrated companies, enabling us to tell more stories, reach broader audiences and amplify impact.
“Just as important, we believe the creative community and audiences are best served by greater choice – not less – and by a marketplace that encourages the full spectrum of filmmaking, content creation and theatrical exhibition, not one that eliminates meaningful competition by creating a monopolistic or dominant entity.”
Ellison went on to provide a list of commitments he promises to fulfil should Paramount succeed in acquiring WBD. These include continuing to operate HBO independently, continuing to work with third-party studios and indies on both licensing and acquisitions, and producing at least 30 feature films per year split equally between Paramount Studios and Warner Bros Studios.
He also reiterated that every film would receive a full theatrical release with a minimum 45-day window globally before becoming available on paid VoD, and that the home video window would be preserved prior to availability on SVoD services.
Ellison, who has recently engaged in lobbying efforts with UK and European political leaders to secure support for his bid, said he and his team wish to “safeguard the future of visual storytelling” by acquiring WBD.
While Netflix still appears to be the clear frontrunner to win WBD, provided the deal is approved, Paramount Skydance has not given up its pursuit and continues to push ahead with its hostile takeover bid.
Last month Paramount Skydance extended its tender offer for WBD to February 20 and filed preliminary proxy materials with the US Securities and Exchange Commission to ask WBD shareholders to vote against Netflix’s takeover bid.
For its part, WBD has repeatedly said that Paramount’s offer is not better than Netflix’s. It has also gone several steps further, stating that it sees red flags in Paramount’s financing plan. It has also pointed to Paramount’s “junk” credit rating, versus Netflix’s “investment-grade balance sheet” and US$400bn market cap as rationale for its decision.
Netflix, meanwhile, has been busy making the case for the takeover to the US government, with co-CEO Ted Sarandos this week telling a Senate committee that its acquisition would “strengthen” the US entertainment business and that the combined entity would not constitute a monopoly.
During a session lasting over two hours, Sarandos was quizzed by both Democratic and Republican senators about various ways in which the deal could be anticompetitive
During Tuesday’s hearing, Senator Cory Booker said Paramount chairman and CEO David Ellison had been invited to participate but had declined. Ellison did, however, meet with senators privately, said Booker.
