is a reporter focusing on film, TV, and pop culture. Before The Verge, he wrote about comic books, labor, race, and more at io9 and Gizmodo for almost five years.
Netflix is the frontrunner to become Warner Bros.’ new owner, but the war for control of the legacy studio isn’t over just yet. Paramount Skydance has made its own outsize offer for the company that would give CEO David Ellison even more control over the news and entertainment landscape. And while Warner Bros. Discovery has repeatedly turned down Paramount Skydance’s previous offers, Netflix’s bid could also fall apart as it’s subjected to regulatory scrutiny by the Federal Trade Commission and Department of Justice.
As much as WBD head David Zaslav and Netflix co-CEO Ted Sarandos and Greg Peters might want this whole process to be a done deal, it’s not and there are a number of different ways it could all work out. Regardless of which — if any — of the interested parties acquires Warner Bros., ax merger this large would send shockwaves through the entertainment world. This kind of corporate consolidation might benefit the companies’ shareholders. But it will almost certainly harm consumers by giving them even fewer options to choose between, and nonexecutive entertainment industry workers will be left struggling to stay afloat.
WBD has signaled that it’s open to Netflix’s $82.7 billion acquisition proposal — a deal that would include a blend of straight cash and stock options and would close following WBD’s split into two companies. That sum is more than Comcast was willing to pony up for Warner Bros.’ (but not Discovery Global’s) assets, which is why the NBCUniversal owner has bowed out of this fight. But earlier this week, Ellison called Netflix’s deal “inferior” and insisted that Paramount Skydance could give WBD stakeholders “the opportunity to act in their own best interests and maximize the value of their shares.”
Paramount Skydance is now hoping that $108.4 billion in cash will be enough to convince WBD to sell itself off entirety. That deal would give Paramount Skydance control of Warner Bros.’ movie and TV production studios, the HBO / HBO Max brands, and — unlike Netflix’s proposal — all of WBD’s cable networks like the Discovery Channel and TNT. It would also make Ellison, who became CEO after Skydance bought Paramount earlier this year for $8 billion, one of the most singularly powerful media figures in the world.
If Paramount wins…
Though many were quick to cry foul when Netflix announced that it was buying Warner Bros., an Ellison victory would be just as concerning. We would still be looking at a situation where a legacy studio would essentially disappear in order for a streamer (albeit one owned by a traditional studio) to absorb all of its content. It would help Paramount Plus if it could brag about having HBO series the way the platform has done with the IP it bought with Showtime. It would also probably please Ellison to own CNN — another of WBD’s properties. But to understand how terribly that scenario might shake out, all you need to do is look at what has happened with CBS News.
According to the Wall Street Journal, Ellison has promised the White House that he will do to CNN what he has done to CBS if he is able to get his hands on WBD. After news of Netflix’s deal first broke, Ellison reportedly told members of Trump’s team that he would “make sweeping changes to CNN.” Neither Paramount nor the White House has publicly commented on what this new CNN might look like. But given the president’s long-established feud with the cable news network, it is easy to imagine Ellison forcing it to cover the Trump administration more favorably.
In all the chaos that came with Paramount Skydance’s most recent hostile bid for WBD, the question of where Ellison suddenly came up with so much extra cash got somewhat lost. Of course, some of the money would come from the Ellison family directly by way of David’s father Larry, cofounder of Oracle. But Paramount Skydance had not made it clear that a substantial portion of its WBD bid was being provided by Jared Kushner’s Affinity Partners private equity firm and sovereign wealth funds from Saudi Arabia, Abu Dhabi, and Qatar. (Affinity is also behind the $55 billion buyout deal for gaming giant EA.)
Paramount Skydance might be offering the most money for WBD, but Kushner — the president’s son-in-law — being involved represents a very clear conflict of interest given that the deal would need the Trump administration’s approval. The whole thing looks even shadier on its face when you consider Larry Ellison’s history of working with and giving money to Donald Trump.
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