As a new reality set in, the questions grew.
Paramount Skydance shocked the entertainment industry on February 26 with the news that it had reached an agreement to acquire Warner Bros. Discovery, ousting Netflix in a come-from-behind victory typical of emotional sports movies.
Over the next few days, industry figures flocked to Los Angeles for a busy pre-Oscars weekend, including the Producers Guild Awards, Actors Awards, and Eddie Awards. The result was that two of the city’s mainstays, Warner Bros. and HBO, were absorbed into the Paramount Skydance organization, leaving many tongues wagging about a deal that would surely change the landscape of Hollywood. Yes, these assets have been transferred twice within six years (to AT&T and then to Discovery Inc.), but never to a directly rival media company with many overlapping operations.
Despite the Netflix deal, there’s a sense of whiplash at WBD as the tide has suddenly turned in favor of director David Ellison’s Paramount Skydance. There is also a sense of mourning for an era that is clearly coming to an end.
“For those of us in our 50s, we grew up thinking that HBO and Warner Bros. were the gold standard. So it’s very difficult to change that. It’s emotional,” Netflix and Universal Pictures alum Scott Stuber told Variety at PGA. “That’s a big change.”
The scope of the changes will be astonishing. Here are some important questions that inquisitive minds want answers to right away.
1.) Warner Bros. Pictures is doing great – does it matter?
Perhaps no one in Hollywood is more passionate than Warner Bros. Pictures co-heads Michael De Luca and Pam Abdi. The filmmakers have topped the box office with blockbusters like “Weapons” and “A Minecraft Movie.” And they’ve built a reputation for betting on visionary filmmakers like Paul Thomas Anderson (One Battle After Another) and Ryan Coogler (Sinners), which paid off with 30 Oscar nominations in 2025. But Ellison has already set up Josh Greenstein and Dana Goldberg at Paramount Pictures. Will he allow De Luca and Abdi to operate as separate islands, or will he impose too many powers on them and make it difficult for them to remain there? There is also skepticism about whether the integrated studio, which Ellison has promised will release 30 films a year, will be able to make it to theaters. And there are treasures needed to generate such vast stone tablets. Most major studio productions cost between $75 million and $200 million, so if a sale goes through, Warner Bros. and Paramount may not have a lot of money to waste.
2.) It’s not a TV — is it a Paramount+ tile?
What will happen to HBO? This is a question that people inside and outside of WBD want answered as soon as possible. While it’s less urgent, it’s still interesting to see whether the HBO Max brand will simply disappear. Ellison suggested to Wall Street analysts on March 2 that HBO and CEO Casey Bloys would retain some autonomy. “We plan to operate independently,” Ellison said, “which frankly allows HBO to do incredibly well. … But by combining our platforms, all of our content will be able to reach an even broader audience than we could on our own.” Ellison wasn’t asked any questions about HBO Max, but perhaps that’s an answer in itself.
3.) Can WB and Paramount avoid debtor’s prison?
Consolidation in the media and entertainment industry is fueled by debt, and the WBD-Paramount merger is no exception. In a call with analysts on Monday, Ellison acknowledged that the combined company would carry a staggering $79 billion in debt, but was optimistic that synergies would result in $6 billion in cost savings. But that still leaves the company with a lot of sway, just as it was when David Zaslav and his team looked for a buyer for Warner Bros. Discovery. This is also the predicament that previous owner AT&T faced when it sold the company less than four years ago. Borrowing money means that you will have to pay it back someday.
4.) Who does David Ellison think he is?
No one would deny that Ellison, who acquired two of Hollywood’s legendary studios in record time, is a brat. And as the son of a millionaire, he has plenty of funds. But what Mr. Ellison lacks is a track record of successfully running large conglomerates. The production company he founded in 2006, Skydance, has had some successes, including co-financing “Top Gun: Maverick” and five “Mission: Impossible” movies. Outside of Tom Cruise’s business, things were even more difficult. Most of Skydance’s big movies are based on IP that existed long before its founding. The films developed by Ellison’s team were rather varied, including such memorable works as “The Fountain of Youth” and “Heart of Stone.” Not a resume that would make Irving G. Thalberg jealous.
5.) What’s next for Netflix?
Netflix didn’t win this time. However, the streaming giant does not buy WB and HBO, so it has a lot of extra cash and resources on hand. Additionally, Ted Sarandos is now very motivated to show Hollywood and Wall Street that Netflix has plenty of growth potential without relying on studio libraries or pay-TV OGs. Never underestimate the power of a despised CEO.
