The Warner Bros. and Paramount Merger Is Practically Inevitable, According to Insider Reports

The chessboard of Hollywood keeps shifting, and all signs point to Warner Bros. Discovery (WBD) being the next big piece to move, as per a huge report tonight by Deadline. With Motion Picture Group chairs Michael De Luca and Pam Abdy securing new contracts after helping deliver a $4 billion global box office haul year-to-date, insiders say the company has now become an even more tempting acquisition target for David Ellison and Skydance.

As one studio insider put it, bringing De Luca and Abdy under Ellison’s wing would be like “buying a house and discovering a Warhol painting hanging out back.” Their re-upping all but ensures that whoever buys WBD won’t be walking away empty-handed when it comes to marquee talent.

What this means for David Zaslav, however, is less glamorous. Sources suggest that Ellison and his father, Larry Ellison— the Oracle co-founder and, depending on the day, one of the world’s richest men — want a “clean sheet” approach to any merger. That makes Zaslav’s continued leadership unlikely. At most, he could be offered a board seat or some kind of “strategic advisor” title, but the word in industry circles is clear: the Ellisons don’t want the baggage of WBD’s debt-heavy past, nor a prolonged leadership struggle.

Still, Zaslav has reportedly been trying to shop WBD to other potential bidders, including Netflix, perhaps in search of leverage or a “grand poobah” role in any potential merger. But analysts remain skeptical.

Why Won’t Netflix Buy WBD?

Paramount Skydance logo.Image via Paramount

According to Richard Greenfield of Lightshed Partners, Netflix isn’t a real contender for WBD. “The streamer is simply not going to spend $75–$100 billion to acquire Warner Bros. Discovery,” Greenfield noted, pointing to the company’s $47 billion market cap coupled with nearly $30 billion in debt. More importantly, Netflix doesn’t want the linear cable networks that still weigh down WBD — nor the headaches of legacy wholesale distribution deals across Amazon Prime, Charter, and DirecTV. Netflix’s focus remains on original IP and licensing content on a case-by-case basis, not inheriting a giant cable tangle.

The Ellisons, fresh off their hard-fought $8 billion Paramount deal, appear determined not to repeat the drawn-out negotiations that plagued that process. Acquiring WBD in one bold move — cable networks and all — could actually prove cheaper than waiting for the company to split its linear and studio assets.

But few suitors remain in play. Comcast would face harsh regulatory scrutiny, Sony might need a PE partner like Apollo to swing the deal, and Apple and Amazon seem unlikely to leap. That leaves Skydance and the Ellisons in pole position.

Stay tuned for more updates.

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