That’s Not All, Folks: Netflix may have won the bidding war for Warner Bros., but a regulatory battle lies ahead—and Paramount’s David Ellison is loaded.
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Netflix’s announcement on Friday that it had won the intense bidding war to acquire Warner Bros. Discovery—or at least the most valuable assets, its film studio and streaming service—might seem at first glance like a stunning defeat for the David Ellison, the new owner of Paramount Skydance. After all, the 42-year-old Ellison—backed by his father, Oracle founder Larry Ellison, the world’s second richest man—had just acquired another legendary Hollywood studio, Paramount, in August for $8.4 billion after a lengthy regulatory process, thanks to support from the Trump administration.
For much of the process, the Ellisons were believed to be front-runners for Warner Bros. Discovery, given Larry Ellison’s $269 billion fortune and the company’s willingness to purchase both WBD’s growth assets as well as its declining linear television channels. Yet even after submitting five all-cash offers, with bids reportedly nearing $30 per share, Warner Bros. chose Netflix, which offered a combined $27.75 per share to shareholders for just the studio and streamer, in a combination of cash and stock that valued the legacy media giant at $82.7 billion ($72 billion when accounting for debt).
The earliest the two companies could merge would be the third quarter of 2026, when Warner Bros. expects to complete the split-off of its cable channels (including CNN, TBS and TNT), and the history of recent media acquisitions would indicate that this agreement is just the beginning of a long process filled with plenty of potential regulatory hurdles and business pitfalls. As one Hollywood executive tells Forbes, “Netflix could be going from a bidding war to a fist fight.”
And even before the Netflix deal was announced, Ellison had thrown a well-timed jab its way. A letter sent by Paramount’s lawyers Thursday to Warner Bros. CEO David Zaslav may indicate the company’s readiness to continue its pursuit of the acquisition, using some combination of the Ellisons’ relationship with the president to hold up the deal in the regulatory process, backing an antitrust lawsuit, or initiating a hostile takeover bid taken directly to shareholders. Reports from the Ellison orbit say the latter is a real possibility, though it would come at a cost far exceeding Netflix’s current total.
The letter questioned the “fairness and accuracy” of the process, and according to several news outlets that reviewed it, said that deals with either Netflix or Comcast would be “doomed to fail” because of “serious antitrust concerns.”
“The simple truth is that a deal with Netflix as the buyer likely will never close,” Paramount’s letter said, ignoring its own antitrust issues. “Netflix is the only remaining Big Tech company that has not faced serious global antitrust enforcement, but attempting to acquire the WBD assets will change that.”
According to reporting by New York Post, White House officials already held a meeting some with President Trump voicing their opposition to Netflix’s potential takeover. And on Wednesday, David Ellison traveled to Washington D.C. to visit with administration officials and lawmakers and make his appeal. Trump has meanwhile called the Ellisons “great guys” and “friends” on several occasions.
While the Trump administration does not have the power to unilaterally block the deal—it requires approval from the Federal Trade Commission—Trump could still apply pressure both directly and indirectly on the process, as he did in his recent fight with Jimmy Kimmel. An antitrust lawsuit brought by the Department of Justice could block the Warner Bros. acquisition temporarily, and could make a strong case to scuttle the deal permanently, given that Netflix is the global leader in streaming with 300 million global subscribers and Warner’s HBO Max ranks fourth with 128 million.
“This deal looks like an anti-monopoly nightmare,” said Senator Elizabeth Warren in a statement on Friday.
Netflix, meanwhile, will no doubt argue that its primary competitor in digital video is YouTube, which according to Nielsen accounts for 12.9% of all monthly TV viewing, compared to 8% for Netflix and 1.3% for HBO Max. But YouTube does not participate in the marketplace for premium content, or its creators, many of whom have spent Friday vocalizing their opposition to the deal.
A statement from the Writers Guild of America this week said the merger “must be blocked,” echoed in slightly less definitive terms by other guilds around Hollywood, citing potential job loss and lower demand for content.
Research firm Morningstar calls the likelihood of regulatory approval a 50/50 “toss-up,” and says Paramount “could still be lurking,” though their path now becomes more expensive and complicated.
The Ellisons certainly have the resources to fight a prolonged legal battle, and have already proven once that they’re willing to patiently navigate the political arena. Skydance’s acquisition of Paramount was held up for over a year by the FCC, with chairman Brendan Carr all but confirming the slowdown was politically motivated. Other suitors, including Apollo Global Management, nipped at Skydance’s heels throughout, but after several moves seen as placating the administration, including a $16 million lawsuit settlement and the cancellation of The Late Show with Stephen Colbert, Ellison prevailed. In recent weeks, Paramount Skydance greenlit Rush Hour 4, reportedly at the request of Trump, just as the Warner Bros. negotiations were heating up.
Had Paramount been the successful bidder, many of the same consolidation concerns would have no doubt applied. The company has laid off around 2,000 workers since its merger with Skydance, and in joining two major studios, there would be one less bidder for film and television projects. However, the combination of the two streaming services would raise fewer monopolistic red flags, given Paramount+ only has around 79 million subscribers and a far smaller international footprint.
If closing the Warner Bros. deal does drag on for an extended period of time, especially in a fast-changing entertainment landscape fueled by artificial intelligence, history says it could be devastating to future business outlooks. When Warner Bros. agreed to merge with AT&T in 2016, for instance, a DOJ case blocked the deal until 2018, setting it two years behind competitors in launching its own streaming service. Within four years, the company had been spun-off from AT&T and then merged again in 2022, saddled with debt that led to its eventual auction this fall.
Should Netflix’s deal fail to be approved, it has agreed to pay an enormous $5.8 billion fee to Warner Bros. Discovery. But the streaming giant, which commands its own significant resources, said on an investor call this morning that it is not concerned about the regulatory battle ahead.
“Our plans here are to work really closely with all the appropriate governments and regulators,” said Netflix co-CEO Ted Sarandos. “But we’re really confident that we’re going to get all the necessary approvals that we need.”
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Source: https://www.forbes.com/sites/mattcraig/2025/12/06/how-the-ellisons-could-still-land-warner-bros/
