Company: WBD
Filing Date: 2025-12-11
Form Type: DFAN14A
Source: 0001193125-25-314733
Chunk: 1

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-12-11
Form: DFAN14A
Chunk 1
---
                                                                                                             
 compared to YouTube’s 13% of U.S.-total viewing time. Warner Bros. Discovery has reported approximately 5%. Does this address any concerns about combining the two companies? |

No. Total TV viewing time is not a relevant metric from an antitrust perspective. Viewing time is relevant in an ad-drivenmarket. But Netflix generates less than 10% of its revenue from ads. Its real business is video streaming subscriptions. That is what defines its market and where antitrust regulators will focus. Within the subscription market, consumers choose between Netflix, Amazon+, Disney+, Paramount+, Apple TV, and HBO Max, among others. Those are substitutable services all offering premium, long-form TV and films. The competition between these services keeps Netflix from raising its prices too high and keeps Netflix paying fair prices to creators and talent for new TV and film projects. YouTube’s short-form, user-generated videos are undoubtedly popular, as are TikTok, Instagram, X, Snapchat, Twitch and video games. But those are not substitutable services for Netflix. They don’t impose price discipline on Netflix, they don’t compete to buy TV shows and films against Netflix, and this means that they aren’t relevant to an antitrust review of a Netflix acquisition of WBD. A combined Netflix-WBDwould so dominate subscription streaming that it would gain the market power to raise prices with little or no fear of losing subscribers, while underpaying creators and talent with little or no fear of those projects going to competitor services. That’s exactly the kind of harm antitrust law guards against, which is why we expect regulators in the US and elsewhere will block the proposed deal were it to move forward.

| 3. | Why do you believe WBD’s Global Networks “stub” should be valued at $1? |

The Global Networks business being spun out is entirely cable with no broadcast network and no significant sports rights following the loss of its NBA package to Disney, NBC and Amazon. It is an asset on its own that, without our sports, our anchor broadcast network in CBS, and synergies, will decline at a double-digit rate per year. After accounting for the debt WBD will put on that business, the real value Warner Bros. Discovery shareholders are likely to get is ~$1 per share. By offering to buy all of WBD we are maximizing value for WBD shareholders and providing them immediate and certain value. We arrive at $1 per share based on 4.5x Global Networks Wall Street consensus next-twelve months EBIT