One of the biggest stories of the year with an impending impact on theatrical exhibition was Netflix’s proposed acquisition of Warner Bros. Studios. The deal, which is still unresolved as Paramount continues to make its case directly to Warner Bros. shareholders, risks putting a cherished and successful film studio in the hands of a corporate owner with a longstanding disregard for the role and value of movie theatres in the future of the movie business.
Extensive reporting from Bloomberg’s Lucas Shaw indicates that the opening for Netflix may have been created by aggressive bidding tactics used by Paramount’s Chairman and CEO David Ellison to acquire the rival studio. These include concerns over the background of some of the financial backers of the Paramount offer, direct wooing of Paramount shareholders, and terrifying the industry and regulators about the transformative and catastrophic impact on the industry if Netflix were to take over the storied studio.
In the end, this approach has had the effect of alienating the studio’s management and and its board of directors, leaving an opening for alternative bids. If the Netflix offer is ultimately accepted and approved by regulators, it will not only be an embarrassing loss for Ellison but also a potentially disastrous development for movie theatres, which could see the flow of new movies coming out of Warner Bros. wither over time.
