In the eyes of many in Hollywood, the battle for control of Warner Bros Discovery boils down to two unappealing options: the winner will either be the company that broke the foundations of the movie business or the one they believe is openly bending a knee to President Donald Trump.
Netflix, which offered $83bn for WBD’s streaming and studio assets last week, has for years angered the movie industry for refusing to widely release films in cinemas. Ted Sarandos, Netflix co-chief executive, called cinematic releases an “outmoded idea” earlier this year.
And Paramount, whose chief executive David Ellison launched a $108bn hostile bid for Warner Bros this week, is viewed by some Hollywood liberals as too eager to accommodate Trump.
“There’s just a lot of frustration out there right now about these two buyers,” said Tom Nunan, an Oscar-winning film producer and lecturer at the UCLA School of Theater, Film and Television.
The sale of the century-old Warner studio has raised anxieties about thousands of job cuts and the loss of a major buyer of television and film projects — which stands to impact virtually every other segment of the industry, including talent agencies, producers, actors and directors.
Paramount this week said it would seek $6bn in cost savings over three years if it is successful in acquiring Warner. Netflix estimates $2bn-$3bn in cuts, mostly in overlapping technology capabilities and support.
When it comes to Paramount and the Ellisons, Hollywood executives say they are most concerned about cost cuts and politics © AaronP/Bauer-Griffin/GC Images/Getty Images
The sale has also heightened anxieties about the future of Hollywood following a tough few years marked by strikes, thousands of job losses, shrinking audiences at the cinema and the rise of artificial intelligence.
“What you’re seeing is shock — Hollywood is shocked,” another award-winning producer said of the Warner Bros sale. “Hollywood’s having a meltdown, like, ‘Oh shit, this is really happening.’”
Ellison’s dealmaking has the financial support of his billionaire father Larry Ellison, a Trump supporter. The latest Paramount bid for Warner Bros also included Jared Kushner, Trump’s son-in-law, as one of its financial backers, along with Gulf investors.
“The second you see that Jared Kushner is involved, you know [the Warner deal] is a fait accompli,” said one longtime entertainment executive, a frequently expressed view in Hollywood this week. “It tells you everything you need to know.”
The Netflix bid has roused a sense of dread among some of Hollywood’s filmmakers, including Avatar director James Cameron, at the thought of the streaming service taking control of Warner. Speaking on the industry podcast The Town, Cameron called Sarandos’s pledge to continue releasing Warner Bros films in cinemas “sucker bait”.
Hollywood fears the sale of WBD could mean the loss of a major buyer of TV and film projects — which could impact virtually every other segment of the industry © Jill Connelly/Bloomberg
Sarandos has tried to tamp down such concerns. “We’re deeply committed to releasing [Warner Bros] movies exactly the way they’ve released those movies today,” he said this week.
“The theatrical business we’ve not talked a lot about in the past . . . because we’ve never been in that business,” Sarandos said. “When this deal closes we are in that business.”
Some in the movie industry remain sceptical, saying Netflix has tended to only release films for short “windows” without marketing support — mostly as a way to qualify for award consideration. Cinema United, a trade group, calls the company’s offer an “unprecedented threat to the global exhibition business”.
“The movie people feel betrayed,” a producer told the Financial Times. “They sound defeated, like they haven’t been able to beat Netflix. They keep talking about Netflix like they’re the nouveau riche, like they’re new money and they’re trashy and they don’t respect our traditions.”
Netflix has also dramatically changed the way talent is paid in Hollywood, replacing “back end” profit participation that enriched generations of agents and talent with healthy upfront payments. Many expect those old-style pay arrangements to continue to flatten out, especially with less competition among studios.
The latest Paramount bid for Warner Bros also included Jared Kushner, Trump’s son-in-law, as one of its financial backers, along with Gulf investors © Ethan Swope/Bloomberg
When it comes to Paramount and the Ellisons, Hollywood executives say they are most concerned about cost cuts and politics. Unlike Netflix, Paramount is seeking to buy Warner’s cable TV assets, which include CNN, a longtime target of Trump.
Since taking control of Paramount in August, the Ellisons have appeared to cater to Trump’s concerns and tastes. They installed “anti-woke” journalist Bari Weiss at the top of CBS News, and greenlit a revival of the Rush Hour buddy cop franchise that is a favourite of the president’s, according to a report by Semafor.
Nunan said: “The mix of the Ellisons so aggressively seeking Trump’s approval, accepting that he’s going to have a say, and then collecting Saudi investors along with his own son-in-law to help pay for the whole thing has left a lot of folks feeling uncertain about the editorial process, in particular when it comes to CNN.”
At the Kennedy Center awards ceremony on Sunday, Trump said he would be “involved” in the decision about the Warner Bros sale, adding that he had hosted Sarandos at the White House the previous week. The president also suggested Netflix’s market share might be too high for regulatory approval of the Warner acquisition. “It could be a problem,” he said.
Netflix estimates up to $3bn in cuts if its WBD bid succeeds © Ethan Swope/Bloomberg
Despite the criticism, people who have worked with Ellison and Sarandos describe them as movie lovers who sincerely want to help Hollywood grow again. Yet those who respect Ellison worry he needs to digest the Paramount acquisition before attempting to take on a second Hollywood icon. And they credit Sarandos for his role in building a company with a market value of more than $400bn.
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“The calculus is around what management team will be better, and I think that’s kind of an indisputable argument just based on history,” said a senior Hollywood executive. “That’s not a knock on David — he’s very impressive. But nobody can say that he created Netflix.”
Another high-ranking studio executive, an avowed lover of the cinematic experience, said the hand-wringing about the idea of Netflix owning a major studio is already starting to look dated.
“With Netflix and people’s objections to it, they’re mourning something that has already happened,” he said. “I think theatrical film is superior in a thousand ways to things that are released online. But if people aren’t going, people aren’t going.”
