Winners and losers in hotly contested bidding war for Warner Bros Discovery

Netflix’s planned acquisition of Hollywood studio Warner Bros Discovery (WBD) has fallen apart at the 11th hour, as Paramount Skydance made a “superior” proposal to buy the conglomerate for $110bn.

While the independence of the companies after the acquisition is unclear, Paramount Skydance CEO David Ellison has discussed plans to merge the portfolios of streamers Paramount+ and HBO Max to compete with Netflix.

Netflix withdrew from the process after Paramount Skydance’s proposal. It said WBD would have been “‘nice to have” at the right price, not a ”must have at any price”.

Who were the winners and losers in this hotly contested bidding war? And what happens next?

Winner No 1

Longtime Discovery cable network CEO David Zaslav engineered his company’s merger with Warner Bros in 2022 to create Warner Bros Discovery. The merger also saw the combination of Discovery’s reality content, Warner Bros’ film library and HBO’s quality TV series on the streaming service Max (now HBO Max) to challenge Netflix.

However, Max didn’t live up to its name, as audiences for HBO originals such as The White Lotus showed little interest in Discovery shows such as Dr Pimple Popper.

Unable to significantly lift WBD’s share price, Zaslav initiated plans to separate the failing cable assets, such as Discovery, from the streaming growth areas, such as HBO Max, in preparation to sell the company.

Despite Zaslav facing continued criticism, his gambit paid off, attracting high bidders for WBD. If the Paramount deal happens, Zaslav’s personal WBD shares and equity will be valued at $790.5m.

Zaslav, who recently extended his WBD contract to end-2030, will be a key figure in the transition, but his role after the sale remains unclear.

Winner No 2

Ellison is the head of Skydance Media and son of one of the world’s richest men, Oracle co-founder Larry Ellison. Ellison’s Skydance Media acquired the struggling Paramount Studios in 2024.

While Paramount has some storied intellectual property such as Star Trek, Captain Kirk is no match for the Warner Bros’ cross-generational franchises, including Harry Potter, Batman and Looney Tunes.

Factoring in Warner’s coveted film library, premium HBO shows and the news might of CNN (also a division of WBD) to the Skydance Corporation, Ellison is set to become one of the most powerful people in traditional media.

Winner No 3

US President Donald Trump is a longtime friend of Larry Ellison. US Federal Communications Commission chair Brendan Carr has openly praised the conservative direction of CBS since David Ellison took over the parent company Paramount. Trump vowed to stay out of the WBD sale.

Netflix CEO Ted Sarandos was grilled by Republican senators earlier this year over Netflix’s “woke” content. The Senate hearing seemed to set the tone for what would have been a challenging regulatory process for Netflix to acquire WBD.

While Netflix was facing political opposition, David Ellison was Republican stalwart Lindsey Graham’s guest at Trump’s state of the union address. Thus, WBD shareholders were assured the Paramount deal had Trump’s tacit approval.

Winner No 4

Netflix stock declined sharply since its plans to acquire WBD were announced in December. Investors were nervous about the unprecedented purchase, by a company whose playbook had been “builders rather than buyers”.

News of Netflix’s withdrawal from the WBD sale has seen the streaming giant’s shares surge. The company will also receive a $2.8bn termination fee, paid by Ellison’s Skydance. Netflix certainly won’t leave the process empty-handed.

Loser No 1

Despite concern regarding a Netflix takeover of WBD, there was comparatively little overlap between the companies. Unlike WBD, Netflix doesn’t own linear and cable stations, make movies for cinema or have a news division.

Paramount and WBD, however, are almost identical companies, albeit at different scales. The joining of the two Hollywood studios will allow for what Ellison describes as “synergies”, being interpreted as thousands of jobs lost as duplicated departments across the two companies are combined and cut. The creative community will be the loser.

Loser No 2

Ellison has promised to run the Warner Bros and Paramount film studios independently and to produce 30 films each year for cinema.

Audiences had similar hopes ahead of Disney’s acquisition of 20th Century Fox in 2019. But since the deal, the combined Disney and 20th Century theatrical output has fallen by 46%. A similar decline may occur if Warner Bros and Paramount end up under the same corporate umbrella.

Also, while Ellision has produced dozens of films under Skydance Media, they have been a mixed bag, with a trashy Geostorm for every crowd-pleasing Top Gun: Maverick. By contrast, Warner Bros is coming off a year-long hot streak with Sinners, One Battle After Another and Weapons. Would such auteur-led films be made with David Ellison in charge?

Loser No 3

Skydance’s 2024 takeover of Paramount quickly resulted in editorial changes at the company’s news division, as conservative political commentator Bari Weiss was brought in as CBS editor-in-chief.

In the ensuing months senior CBS news producers have complained of “political bias”, with veteran broadcaster Anderson Cooper announcing he is leaving CBS’s flagship news show 60 Minutes amid the turmoil.

There are concerns a similar conservative agenda may be brought to WBD news network CNN, leading to more ideological-driven programming across America’s prominent news networks, with audiences being a potential loser.

What comes next?

European and US legislators will review the deal as concerns around merging two of the remaining five legacy Hollywood studios persist.

Nonetheless, most of the resistance to the Netflix deal stemmed from the combining of the world’s biggest and fourth-biggest subscription video-on-demand services. As Skydance’s Paramount+ is a smaller streamer, the company does not face the same anti-competitive arguments Netflix did.

It is likely that by the time The Batman: Part II lands in cinemas in 2027 the bottom of the Warner Bros logo will read “A Skydance Corporation”.