Late Thursday night, around 10:30pm in London, at the Warner Bros. World Premiere After Party. At the moment of the all-star gothic romance “The Bride!,” suddenly, phones all over the room started ringing simultaneously.
The news has been delivered. Paramount Skydance is poised to claim victory as Netflix pulls out of its deal to acquire Warner Bros. Discovery.
Stars including writer/director Maggie Gyllenhaal, Jesse Buckley, Christian Bale and Jake Gyllenhaal were in attendance, as well as executives from Warner Bros. Pictures, led by co-CEO Pam Abdi.
Guests said they felt a palpable sense of relief that Hollywood’s most competitive competition in years was finally over.
But amid all the party noise for “The Bride,” perhaps due to fatigue after months of intense back-and-forth between the team of David Ellison, Ted Sarandos and David Zaslav, news of Paramount’s acquisition of WBD (still far from a “done deal,” as California’s attorney general pointed out) sparked both optimism and concern from across the international film community.
But this is a different concern than in the United States, where there are concerns about the Ellison family’s rapidly increasing media power and ties to Donald Trump. Outside the United States, the issue is not political power, but rather bargaining power.
“Paramount has been very supportive of Windows, so that’s a plus for the exhibition,” says Claire Binns, a highly respected British film veteran who works at the Picturehouse theater chain and won a BAFTA for her contribution to the industry on Sunday. “But my main concern is the amount of movies and the types of movies that are going to be made. Warner Bros.’s output over the last 12 months has been great, all great, original, bold movies. I’m very concerned about the merger and what the types of movies that are going to be made are going to be.”
The outcome is certainly the most desirable of the two options for movie giant Vue CEO Tim Richards, who has been an outspoken supporter of the deal with Paramount.
“This is the best outcome for the industry,” he says. “We have a very well-respected filmmaker in David Ellison who has a solid track record in theatrical releases. I think a filmmaker who runs Warner Bros. and has had a successful theatrical release for 15 years is better than someone who doesn’t.”
In Germany, leading producer Martin Moshkovic (whose credits also include the Resident Evil series) said further U.S. integration would not change the domestic market “overnight,” but said “fewer global decision-makers ultimately mean fewer buyers.” And for producers like him, this “usually leads to tougher negotiations and a more centralized approval process.”
But the deal with Paramount “leans more strongly into theatrical strategy, and that’s important in Germany,” he says. “Warner Bros. has a very talented and successful local distribution team in place and a strong commitment to local language production, whereas Paramount’s on-the-ground reach is much more limited.”
Laura Houlgate, CEO of Europe’s International Cinema Union (UNIC), which represents independent exhibitors, was more cautious.
“Our concerns remain,” she says. “We will continue to engage as discussions progress and emphasize the importance of maintaining a strong and diverse theatrical plan, meaningful periods of exclusivity, and adequate marketing support.” “Our priority is to ensure strong safeguards are in place to protect the long-term health of our members and enable European cinemas to continue to thrive,” it added. “This can only be achieved if there is an agreement with legally binding commitments and subject to the highest level of scrutiny by the relevant competition authorities.”
Paramount Skydance’s likely victory is actually not necessarily the best outcome for European theater owners, said François Godard of research firm Enders Analysis.
“Netflix is very careful about the theatrical business, and they were very committed to the theatrical window,” he said, referring to Ted Sarandos’ promise that Netflix would guarantee a 45-day theatrical window for Warner Bros. movies. In contrast, “Paramount’s ownership of Warner Bros. means a concentration on the distribution side,” Godard said, which means that as a distributor, the combined Paramount-WB entity “will have more leverage in negotiations with theater owners.”
On the EU regulatory side, Sarandos told the BBC in an interview in London last week that the fact that sovereign wealth funds from Saudi Arabia, the United Arab Emirates and Qatar are backing Paramount’s bid is a “bad idea” that could run into regulatory hurdles.
Could Arab Fund’s relationship with Paramount and Warner Bros. be an issue in Europe?
“It could be in the UK as well,” Godard said, pointing to recent precedent where British regulators blocked Redbird Capital Partners’ deal to buy Telegraph Media Group, which was backed by Abu Dhabi-based International Media Investments (IMI).
And they could also be problematic for European regulators, he added. However, at the European Union level, Godard goes on to point out that this potential hurdle “will be weighed in the balance of the broader trade relationship between the European Union and the United States.” “And we saw last summer that the European Union was willing to make concessions to avoid a trade war.”
Further afield, distributors in Southeast Asia are cautiously optimistic about what the WBD-Paramount Skydance deal means for their home market. “For our region, this will likely mean a new emphasis for Hollywood studios on theatrical performance and strong local distribution partnerships before moving their titles to the streaming ecosystem,” says Phuong Duong, business director at Vietnam-based distribution company Mockingbird Pictures. “This is a plus for markets like Vietnam, Indonesia and Thailand, where box office receipts remain culturally and commercially important.”
Duong added that this change “could shift the balance of power back towards a studio-led release strategy, giving Southeast Asian distributors more room to negotiate and build value at the theatrical level, rather than being bypassed by global streaming pipelines.”
“This probably makes it relatively clear that WBD will continue to grow its streaming service, HBO Max, in a direct-to-consumer format and in collaboration with partners in Japan, Australia/New Zealand and across Southeast Asia,” said Vivek Coote, CEO and executive director of research firm Media Partners Asia. “At the same time, we can continue our strategic licensing and related partnerships with players in South Korea, India and Japan.”
Meanwhile, Indian filmmaker Anurag Kashyap, whose films have migrated to streaming platforms, was more succinct about the broader implications: “My films are now available on streaming, but I’m all for cinemas. This acquisition gives me hope for ‘cinema-in-cinema’.”
It remains to be seen how the regulatory review of the WBD-Paramount-Skydance deal will turn out, but there is also hope that Netflix’s reputation for Warner Bros., and its commitment to showing its films in theaters, despite its failure to attract the studio, will influence future decisions.
“We’re hopeful that seeing the success of Warner Bros.’ theatrical releases will give Netflix an opportunity to look at its pipeline of future films and, perhaps as a show of good faith, release some of those films theatrically,” Vue’s Richards said.
Elsa Keslassy contributed to this work
