Business
Netflix amends Warner Bros. deal to all cash in bidding war
Netflix has amended its proposed $72-billion purchase of Warner Bros. and HBO, converting it to an all-cash offer in hopes of defusing criticisms from rival bidder, David Ellison’s Paramount.
Netflix and Warner Bros. Discovery approved the change Monday, according to a regulatory filing. Warner board members previously had accepted Netflix’s $27.75-a-share cash-and-stock proposal for Warner’s Burbank studios and HBO streaming operations.
Paramount has complained that its $30-per-share offer for the entire company was higher, and thus, should be the winning bid. Paramount is appealing directly to Warner stockholders, asking them to sell their shares to Paramount by Wednesday.
Netflix stopped short of raising its bid above $27.75 a share, but the Los Gatos streaming giant agreed to pay the full amount in cash should it ultimately win Warner’s legendary studios behind such blockbusters as “Batman,” “The Matrix” and “The Big Bang Theory.” Netflix is not interested in Warner Bros. basic cable channels, which are scheduled to be spun off into a separate company.
Netflix said the change “simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote.”
The move was prompted, in part, because Netflix’s stock price has taken a major hit, eroding value in its proposal for Warner Bros.
The new terms neutralize one of Paramount’s primary criticisms: that the stock portion of the Netflix offer makes its bid inferior. Netflix’s shares have lost 29% since its pursuit of Warner Bros. came to light. Paramount shares have also declined about 29% over that time.
Warner Bros. Discovery board members have stuck with Netflix’s proposal — valued at $82.7-billion, including some debt — despite persistent overtures by Ellison’s Paramount.
Warner Bros.’ board “continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators and the broader entertainment community,” Ted Sarandos, co-CEO of Netflix, said in a statement Tuesday.
Warner Bros. Discovery said it would schedule a shareholder meeting. The vote could be held in April.
If the Netflix deal is approved, Warner shareholders would also receive stock in the new company, Discovery Global, which will be made up of Warner’s cable channels, including CNN, TBS, HGTV and Food Network. The spinoff is expected to be completed this summer, but the value of the channels is in doubt, giving Paramount ammunition to claim that its $30-a-share tender offer for the entire company was more lucrative.
Paramount, which has been pursuing the prized assets since September, has sued Warner in Delaware courts to obtain information about how Warner board members came up with a value for the cable channels.
Last week, a Delaware judge refused Paramount’s request for expedited proceedings.
On Tuesday, Warner Bros. separately addressed that Paramount criticism by outlining how it values its cable networks.
Warner Bros.’ advisors value the cable networks from as little as 72 cents a share to as much as $6.86 a share, according to the filing. Paramount has claimed those properties have no value even though cable networks account for most of Paramount’s own sales and profit.
The new company, Discovery Global, would have $17 billion of debt as of June 30, 2026. That would decrease to $16.1 billion by the end of the year. Warner and Netflix also tweaked the agreement so that Discovery Global will have $260 million less debt than initially planned as a result of stronger-than-expected cash flow last year.
The filing projects Discovery Global’s 2026 revenue would reach $16.9 billion and adjusted earnings of $5.4 billion before interest, taxes, depreciation and amortization.
In Tuesday’s announcement, Netflix touted its “strong cash flow generation,” which it said supported the revised all-cash transaction “while preserving a healthy balance sheet and flexibility to capitalize on future strategic priorities.”
Warner Bros. Discovery board members have cited Paramount’s highly leveraged proposal as a weak point, giving it another reason to award the company to the stronger firm, Netflix.
Paramount would need to come up with more than $94 billion in equity and debt to finance the deal.
The battle for Warner Bros. is one of the biggest media deals in the last decade and is expected to reshape the entertainment industry. Netflix emerged as a surprise suitor, entering the fray after Warner Bros. put itself up for sale in October.
Netflix has turned to Wall Street banks to help finance its deal. The company now has $42.2 billion of bridge loans in place, according to a filing Tuesday, a type of facility that is usually replaced with permanent debt like corporate bonds.
Netflix is scheduled to report fourth-quarter financial results on Tuesday after markets close.
Bloomberg News contributed to this report.
Business
MrBeast company sued over claims of sexual harassment, firing a new mom
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
Business
Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
Business
Angry Altadena residents ask officials to halt Edison’s undergrounding work
Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.
In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.
The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.
“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.
The council voted unanimously Tuesday night to send the letter.
Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.
“We recognize this community has already faced a number of challenges,” he said.
Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.
Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.
The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.
But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.
Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.
Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”
Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.
“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.
They want the project halted until the problems are addressed.
Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.
The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.
Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.
But some residents, who need to dig long trenches, say it will cost them much more.
“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”
Other fire survivors complained of Edison’s lack of planning and coordination with residents.
“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”
Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.
Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.
It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.
The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.
The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.
The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.
-
Business3 minutes agoMrBeast company sued over claims of sexual harassment, firing a new mom
-
Entertainment9 minutes agoDataland, the world’s first museum of AI arts, sets opening date and first exhibition
-
Lifestyle15 minutes agoThe New Rules for Negotiating With Multibrand Retailers
-
Politics21 minutes agoBass, Barger meet with Trump to push for L.A. fire recovery funds
-
Science27 minutes agoContributor: Regulate the ‘Enhanced Games’ as a medical experiment and a marketing stunt
-
Sports33 minutes agoAre you still hoping to buy Olympic tickets? LA28 shares terms for second ticket drop
-
World45 minutes agoIs Europe too late to the metal recycling game?
-
News1 hour agoWho is John Phelan, the US Navy Secretary fired by Pete Hegseth?