Justice Department Probes The Impact Of Warner Bros. Sale On Theatre Businesses: Report
The Department of Justice (DOJ) has reportedly summoned a few of the largest theatre chain owners in the country to assess the impact of the potential sale of Warner Bros. Discovery Inc.(NASDAQ:WBD).
Federal lawyers are trying to gather information on whether the sale would affect the movie-going public or the number of movies released in theatres, Bloomberg reported on Wednesday.
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It is believed that the DOJ is primarily concerned with the dominance of Netflix Inc. (NASDAQ:NFLX) in the streaming segment. Moreover, the company’s long-standing policy to showcase only a handful of movies in theatres for shorter durations has made Hollywood jittery.
To allay the concerns, Netflix Co-Chief Executive Officer Ted Sarandos has also met with the CEOs of several theatre chains in Los Angeles last week, as per the publication. The streaming giant has also pledged to put Warner Bros. movies in theatres for 45 days, exclusively.
The Department of Justice and Netflix did not immediately respond to Benzinga‘s request for comments.
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Netflix: Winner Of The Bidding War?
The development comes after Warner Bros. rejected the latest takeover bid of Paramount Skydance(NASDAQ:PSKY) on Monday and gave it until February 23 to submit its “best and final offer.” Warner Bros. also said that Netflix can match the offer in the meantime. Paramount’s informal offer of $31 per share seemed to have appealed to the board of Warner Bros.
As the bidding war gains centre stage, analyst Gary Black predicted that Netflix would emerge as the final winner. According to Black, shares of Netflix can also regain the $100 level even if Paramount wins the bid.
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