Who will Warner Bros. Discovery employees have as their new ruler? Public sentiment has shifted in recent months. Most WBD staff currently favor Netflix’s deal to acquire Warner Bros. studios and HBO Max, rather than the entirety of WBD being folded into David Ellison’s Paramount Skydance, sources tell Variety.
Inside Warner Bros. Discovery, the Paramount vs. Netflix controversy appears to have been largely resolved. We’ll have more than two months to consider what an acquisition by either conglomerate would mean for Warner Bros.’ legacy and, more importantly, its current employees, but there now appears to be a fairly large consensus that Netflix is preferable.
But that doesn’t mean everyone’s rooting for Netflix to win the lengthy sale process. At the Burbank site, despite repeated promises from Netflix’s top executives to commit to a 45-day run time for theatrical films, there remains significant skepticism about what impact Netflix’s ownership will have on the future of movie studios and theatrical distribution in general.
But Netflix co-CEOs Ted Sarandos and Greg Peters won over many WBD staffers with their conviction and vision for how they plan to run the combined company. One Warner Bros. Discovery company executive said he is now “somewhat familiar with the idea” and is open to the possibility of a large portion of WBD becoming part of Netflix.
At this time, Warner Bros. Discovery is still ongoing. With Netflix’s approval, the company has set a seven-day period for negotiations with Paramount Skydance to see if it will raise its bid beyond the $30 per share that Mr. Ellison and his backers have stuck with in recent offers. For now, WBD’s board is still recommending that investors vote in favor of the Netflix acquisition at the March 20th special shareholder meeting. The negotiation period with Paramount ends on Monday, February 23rd, and Warner Bros. Discovery is scheduled to hold a Q4 2025 earnings conference a few days later, on February 26th, but the situation may not have been finalized by then. (If Paramount submits a higher bid, Netflix has four days to make a counteroffer.)
Insiders say that following the Dec. 5 announcement of the Netflix-WBD deal and the start of a hostile takeover campaign by Paramount, initial sentiment within Warner Bros. was divided by department and based on whether staff felt the company would do better strategically under either Paramount or Netflix ownership.
Early on, there were certainly some departments that thought Paramount might be a better choice. For example, some within HBO thought HBO Max would easily win against Paramount+. And at the Warner Bros. studio, there were concerns that Netflix would shift its production strategy to feed its own streaming beast.
But since the deal closed in August, Paramount Skydance’s relentless cost-cutting and layoffs have served as a warning to WBD staff that the same will likely happen at Warner Bros. Discovery if the merger goes through. Paramount expects the merger with WBD to generate more than $6 billion in cost synergies, but it would mean significant job cuts.
Under Netflix, the movie studios, properties and television studios would all remain and retain the Warner Bros. brand, according to the company’s plan. Many film officials within Warner Bros. initially accepted concerns that Sarandos would kill the theatrical business, but have come to believe that Netflix intends to keep Warner Bros.’s business largely intact.
One WBD insider says that when the bidding war first broke out, “no one wanted a deal.” After the merger between Discovery Communications and WarnerMedia, which was completed in April 2022, there was already a sense of “merger fatigue between the two companies.” When news broke in September that Paramount was interested in acquiring Warner Bros. Discovery, WBD employees were still processing plans to split the company into two entities. One houses studios and streaming, and the other primarily houses linear TV networks.
The key moment that changed WBD’s hearts and minds regarding the proposed acquisition of Netflix came on December 17th, two weeks after announcing the deal with WBD. Sarandos and Peters visited the Warner Bros. studio grounds hosted by Warner Bros. Discovery head David Zaslav, and the Netflix duo addressed employees in a town hall-like appearance.
“Ted and Greg have worked really hard,” said a WBD executive. “They spoke directly about their intentions and why they wanted it. That put a lot of people in a better position about it.”
“Even HBO seems to be more at peace with Netflix than they were at the beginning,” said another person familiar with the matter. HBO executives realized, for example, that they could follow John Landgraf’s model for FX (which is within the Disney entertainment division) to become a prestige standalone brand within the new company.
Meanwhile, Paramount Skydance’s Ellison’s cozy relationship with the Trump administration is giving WBD staff pause. So is the company’s recent move to shift CBS News to the right under the leadership of CBS News Editor-in-Chief Bari Weiss. “People could tell right away how crazy the Ellisons were,” says one WBD employee.
Under the deal with Netflix, WBD Networks, including CNN, TBS, HGTV and Food Network, will be spun off into a new company, Discovery Global, led by Gunnar Wiedenfels as CEO. Paramount is proposing to buy Warner Bros. Discovery for TOTO. And Paramount’s recent moves against CBS News and the intervention of CBS’s lawyers to remove an interview with Democratic Senate candidate James Talarico from the airing of “The Late Show with Stephen Colbert” have upset TV officials within WBD.
“It’s disconcerting to see CBS News collapse while Paramount is coming in and trying to buy Warner Bros. Discovery, which includes CNN,” a CNN source said. For example, under Weiss’ leadership, 11 members of the roughly 40-person production staff at CBS Nightly News opted to be bought out due to the possibility of new layoffs. Variety recently reported that CBS News has become dysfunctional because its management team, led by Bari Weiss, does not value the standards of veteran journalists. News network staff believe the best outcome for CNN is to become part of Discovery Global.
Meanwhile, evidence of what happened when Disney bought the 21st Century Fox assets, erasing an entire Hollywood studio, is new to Warner Bros. staff, many of whom live or have spent decades at the Burbank property. The company, which has remained largely intact despite several ownership changes in recent years, is steeped in the unique Warner Bros. culture. The question of what will become of the Warner Bros. properties, and the Warner Bros. film and television studios, is worrying as staffers ponder the possibility that these legendary properties could undergo dramatic upheaval if Paramount wins out over the suitors. Mr. Ellison promised that Paramount and Warner Bros. would combine to produce at least 30 theatrically released films a year.
Long before Netflix signed the deal to acquire Warner Bros., studio staff had accepted the fact that Zaslav’s ultimate plan was likely to sell the company. There are still lingering doubts that Netflix will honor the film’s existing theatrical release commitments before ultimately shortening its run to the point where theatrical business is threatened.
One top media executive predicted that Sarandos may be more interested in theater than his public comments about the movie experience being “outdated” suggest, noting that Netflix is missing out on many top projects because it can’t commit to a stronger rollout in theaters. Ticket sales could also open up new revenue streams, not to mention Warner’s treasure trove of intellectual property, as well as the chance to increase the cultural profile of movies released in theaters before they premiere on the service.
“This is a long-term battle,” the executive predicted. “This allows us to get Netflix into consumer products and theme parks. It opens up a lot of avenues.”
Sarandos said the comments against the movie theater experience were made before Netflix was in a position to own a major supplier to the theater business. “I want to win the opening weekend. I want to win the box office,” Sarandos said in a recent interview with The New York Times.
Warner Bros. movie studio leaders Pam Abdi and Michael De Luca are on a roll, riding on a string of box office successes such as “Sinners” and “Weapons,” and could be a valuable addition to Netflix and Paramount. But these companies already have talented executives in place who may not want to share power. As for DC Studios heads James Gunn and Peter Safran, their jobs appear to be more secure, with production on the Superman sequel Man of Tomorrow and the long-awaited Batman sequel set to begin production in the coming weeks and potentially hitting cameras by the end of May. Replacing them at this point may cause too much confusion.
If Warner Bros. executives have any advice for Netflix, it’s to keep the current Warner Bros. structure as intact as possible within the new organization. Sources say preserving functionality will make the transition more successful.
Of course, the impending prospect of a major M&A event is top of mind for everyone across Warner Bros. Discovery’s divisions. But until the deal is completed and closed, it’s business as usual. “Everyone’s thinking about it,” says one WBD staff member. “The main vibe is that people want this problem resolved.” For now, the official says, “we’re going to keep our heads down and do our best.”
One WB Studio employee confessed: “People just want this to end.”
