Bob Iger Warns Netflix Purchase of Warner Bros Discovery Gives Streamer ‘Pricing Leverage’

Disney CEO Bob Iger declined to take a formal position on whether he is team Netflix or Paramount in the battle for control of Warner Bros. Discovery. But he had a lot to say about what regulators should be looking at that made his position very telling, including whether it would give the former “pricing leverage over the consumer.”

“If I were a regulator looking at this combination, I’d look at a few things. First of all, I would look at what the impact is on the consumer,” Iger told CNBC on Thursday. “Will one company end up with pricing leverage that might be considered a negative or damaging to the consumer, and with a significant amount of streaming subscriptions across the world? Does that ultimately give Netflix pricing leverage over the consumer, that it might not necessarily be healthy?”

He also said he’d look at the impact to the creative community and the “ecosystem of television and films,” with a particular emphasis on movie theaters operating with “relatively thin margins.”

“They require, not only volume, but they require interaction with these films and these movie companies that give them the ability to monetize successfully. That’s a very, very important global business,” he continued. “We’ve been certainly participating in it in a very big way, we’ve had 33 $1 billion films in the last 20 years. So we’re mindful of protecting the health of that business. It’s very important to what I’ll call the media ecosystem globally.”

When asked whether he and Disney “make that case to regulators at all in terms of this process?”, Iger replied: “We haven’t determined whether we’ll take a position or not .… I was suggesting what regulators should be looking at.”

Iger was also asked if he views Netflix as a more serious competitor if it prevails in acquiring Warner Bros., to which he said: “No, I’d rather not say anything more than I’ve said.”

Paramount launched a hostile $108.4 billion takeover bid for all of Warner Bros. Discovery after the company entered into an $82.7 billion deal with Netflix for its studio and streaming assets. The tender offer will be open for 20 business days, or until Jan. 8, and Warner Bros Discovery’s board will need to respond within 10 business days, or by Dec. 22.

In a letter taking his all-cash $30 per share offer directly to shareholders on Tuesday, Paramount CEO David Ellison called Netflix’s deal a “blatant attempt” to eliminate one of its “only viable international competitors” with HBO Max. He also shot down the argument that YouTube, TikTok, Instagram and Facebook should be categorized as Netflix’s direct competitors, calling it an attempt to “mask its dominance in SVOD by grouping together all internet-enabled video, media, social media, or otherwise.”

Additionally, he slammed WBD’s board and CEO David Zaslav for a “murky” sale process, arguing that it ignored the $30 per share offer – and the company’s statements that it was not “best and final” – to sprint towards a deal with Netflix.

A WBD spokesperson told TheWrap that the board and company have run a “fair and transparent” process with each of the bidders for months, including “extensive opportunities for due diligence and negotiations.”

“As we communicated on Monday, the Warner Bros. Discovery Board is reviewing the latest offer submitted by Paramount Skydance, which they confirm is identical to the offer they made last week,” the spokesperson added. “The Board’s review will be done with the very same care and focus on its duties to our shareholders by which it reviewed all bids, including the six proposals previously submitted by Paramount Skydance.”

Netflix declined to comment on Paramount’s letter, though the company’s executives have previously said they are “highly confident” that they will secure the necessary regulatory approvals to acquire Warner’s studio and streaming assets. Netflix co-CEOs Ted Sarandos and Greg Peters have also touted the deal as pro consumer, pro creator and pro growth, adding they would protect and create jobs. Additionally, they’ve argued that Netflix would still be behind YouTube’s U.S. viewership share following the deal’s close.

Iger said it’s “nice to be an observer and not a participant in this.”

He added that Disney was “ahead of the game” and “saw the coming wave of streaming” when it reached a deal with Rupert Murdoch to buy Fox’s entertainment assets in 2019.

“We felt we needed not only more volume in terms of content, but more quality, more quality IP, franchises and brands, and also more talent. And so thinking of what the world could become, we jumped on board back then,” he continued. “We’re certainly glad we have, because now the companies are fully integrated and with it came control of Hulu. And that obviously has been very significant and will continue to be in terms of our growth of streaming. So that’s one, in effect, position that we’re taking, is kind of looking at what we did and now looking at what others have determined they must do in order to succeed going forward.”

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