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Netflix Wins the Studio Battle

Paramount Skydance CEO David Ellison inadvertently enriched Warner Bros. Discovery CEO David Zaslav as Netflix secured a $72 billion deal to acquire WBD’s Warner Bros. studio and HBO Max streaming service. The transaction values the assets at $27.75 per share and comes as WBD plans to spin off its pay-TV networks, including CNN and TNT Sports, ahead of closing.

Originally, Ellison envisioned Paramount acquiring the full portfolio — studio, streaming service and TV networks — positioning the company as a dominant entertainment player. However, Netflix and Comcast only sought the studio and streaming assets, leaving Paramount without the complete prize.

How Paramount Sparked the Sale

In September, Ellison formally approached WBD’s board, advocating for a merger that combined the two media giants. His proposals, increasingly higher in value, prompted WBD to initiate a formal sale process. The move brought Netflix and Comcast into competition, ultimately inflating WBD’s share price and ending with Paramount losing out — at least temporarily.

Netflix co-CEO Ted Sarandos highlighted the timing as key: “It wasn’t for sale before, and they hadn’t separated the assets in the way they have right now. That explains why the opportunity arose when it did.”

Zaslav’s Windfall

Zaslav’s holdings in WBD — over 4.2 million shares plus 6.2 million stock awards and nearly 20.9 million options — translate to more than $554 million based on the Netflix acquisition price. Additional shares he is slated to receive in January bring the total closer to $660 million. WBD’s stock has more than doubled since Paramount’s initial bid became public, delivering a massive return to shareholders and vindicating Zaslav after years of criticism for underperformance.

Paramount’s Next Move

Ellison has wasted no time at Paramount, reshaping the company through strategic hires, high-profile talent acquisitions like the Duffer Brothers, and major deals including the $7.7 billion UFC rights purchase. His attempt to acquire WBD was the most ambitious since the Skydance merger, but Paramount is reportedly considering a shareholder-level bid to gain control of WBD’s full asset portfolio.

Paramount claims Netflix’s acquisition process was skewed in its favor, arguing that its $30-per-share, all-cash offer would deliver a better outcome for shareholders and face fewer regulatory hurdles. The company’s advisors value the Discovery Global networks — CNN, TNT Sports and Discovery channels — at around $2 per share, with potential upside if publicly traded.

Regulatory Considerations and Breakup Fees

Netflix and Paramount both included substantial breakup fees to mitigate regulatory risk: $5.8 billion for Netflix and $5 billion for Paramount. U.S. authorities, particularly under the Trump administration, have expressed skepticism over such high-profile media mergers, making approval uncertain.

The scenario sets up a potential bidding war directly with WBD shareholders. If Paramount submits a higher bid, Netflix could match, creating additional upside for Zaslav and investors while determining the final distribution of one of the industry’s most valuable media assets.

The Bigger Picture

Ellison’s aggressive strategy has reshaped the media landscape, strengthened Netflix’s market position, and highlighted the complexity of high-stakes entertainment acquisitions. For Zaslav, it represents a personal and professional triumph, converting a period of scrutiny and shareholder pressure into a substantial financial gain. For Paramount, the hunt for WBD is likely not over, signaling further drama in Hollywood’s high-powered merger arena.