The surprise news Thursday that Netflix was ending its pursuit of Warner Bros. caught nearly everyone in Hollywood off guard, including staffers inside Warner Bros., Paramount and Netflix. The reaction, of course, varied — depending on which side of the Hollywood Hills you sat, what division you’re a part of and even your political persuasion.
“It’s obviously very upsetting to employees,” said one exec inside Warner Bros., who described the news as a “gut punch.” Employees at the studio were said to be holding out hope that Netflix would come up with a new bid to out-maneuver Paramount Skydance‘s “superior proposal,” and thought they’d at least have four days to keep their fingers crossed. But then came Thursday afternoon’s swift announcement that the streamer had bowed out.
Several miles away from Burbank on Melrose Avenue, the champagne was literally being popped open as execs there celebrated their turn of fortune, and also breathed a sigh of relief that their long campaign to nab Warner Bros. had won a decisive battle.
“There were tears of exhaustion and happiness,” said one exec, who said it had been hard to focus on the business at hand inside Paramount Skydance when there was so much work to be done in trying to win the derby for Warner Bros.
And at Netflix, when the streamer announced at 3 p.m. sharp that it was giving up on its Warner Bros. bid, there was a lot of instant rumbling in the halls of Netflix’s Hollywood offices. There were audible sounds of “Whoa” and other surprised noises emanating from offices and cubicles.
Question number one inside Warner Bros. is now what becomes of the company — its staff, its culture, its storied Burbank lot.
The fate of many jobs on the studio production side is a big question mark, both in film and TV. There’s a general sense that 1+1 will still equal 1, as a combined Paramount/Warner Bros. will need to shed some of its production infrastructure, particularly in TV — where the company will now own Warner Bros. TV Group (which includes Warner Bros. TV, Warner Bros. Unscripted & Alternative TV, Warner Bros. Animation and Cartoon Network Studios), CBS Studios and Paramount Television Studios.
Love Film & TV?
Get your daily dose of everything happening in music, film and TV in Australia and abroad.
“Think about the bloodletting of thousands of employees at CBS and Paramount, and now it will be more. Just awful,” says an insider. “It’s really going to be a shakeup for the whole community, the losses of jobs and content. Places to sell, places to buy.”
Another Warner Bros. exec, weary of what the company has been through over the past decade (including four owners between Time Warner, AT&T, Warner Bros. Discovery and now Paramount Skydance), just sighed. “Another day, another merger. I just make shows. That’s all I do. Head down, make the show,” she said.
At Paramount Skydance, there was some relief because departments had been at a bit of a standstill while waiting to see how the challenge for Warner Bros. played out. In particular, some lean departments inside Paramount Skydance had been holding off on staffing up, specifically because they wanted to wait and see if they’d be merging with Warner Bros. (which would then create redundancies). After last year’s massive layoffs, several divisions inside Paramount Skydance (such as the cable outlets and the last vestiges of Showtime) have been cut to the bone.
That might give some Warner Bros. staffers hope that, depending on the division, there will be room for them in the combined company.
But there are so many more questions than answers. Will HBO Max and Paramount+ continue as separate entities, or eventually merge? Will Paramount Skydance sell the Warner Bros. lot in Burbank? And what happens to CNN, particularly given Donald Trump’s desire to mute his critics?
“Look at what they’ve done to CBS News,” said a Warner Bros. Discovery insider.
As for whether the Paramount-Warner Bros. merger will create a culture clash between the two historic companies, one Par insider pointed out that their studio didn’t really have much of a cohesive culture anymore, given its recent mergers with CBS and Skydance, then coupled with all of its layoffs. Contrast that with Warner Bros., where staffers still boast a solidarity that the company has managed to maintain despite a decade of management shifts.
There’s less angst inside Netflix, as one insider there said sentiments among staffers about losing the WBD deal seemed to range widely from relief to disappointment. Without any prompting from leadership, there was much discussion in the hallways that Netflix made the right call to exert financial discipline and not get caught up in the hunt.
That said, some did express frustration at missing out on content development opportunities from the Warner Bros vault. There had been excitement about bringing WBD’s considerable capabilities to produce TV shows and movies into the company that still does not have a large studio arm. Calling the deal off also squashes a host of questions Netflix insiders had about how HBO and Netflix would realistically co-exist in the same company, another staffer said. “I guess doesn’t matter any more who Casey Bloys will or won’t report to,” the staffer quipped, referring to industry chatter about the HBO chief.
Outside of Warner Bros., Netflix and Paramount Skydance, there was plenty of cynicism in a town already scarred from a decrease in production and tremendous job losses. “The new company will be saddled with $87 billion in debt,” said one observer. “To put that in context, in four years, Warner Bros. Discovery took more than $50 billion in debt and was only able to reduce it to $30 billion. So this has double that debt load, and all you’re doing is adding Paramount to it.”
Elsewhere, the reaction was also one of concern: California attorney general Rob Bonta wrote that “Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”
Watchdog groups also shared their alarm, focusing on Paramount Skydance’s impending control of both CBS News and CNN: “The Ellisons have already promised the Trump administration that they’ll make sweeping changes to CNN given the chance, and we know what the means: firing journalists, spiking important stories, and replacing the news with empty propaganda,” said Free Press co-CEO Craig Aaron. “This deal endangers our democracy by giving a family of pliant billionaires even more control of vast swaths of our news coverage, TV stations and movie studios. Allowing more mergers in the already highly concentrated movie business will harm filmmakers and industry workers when Paramount delivers on its promise to make deep cuts to please its Wall Street backers. While a few Hollywood execs and sovereign-wealth fund managers in the Middle East might get rich from this deal, thousands and thousands of American workers will lose their jobs.”
Said Freedom of the Press Foundation chief of advocacy Seth Stern: “Ellison will readily throw the First Amendment, CNN’s reporters and HBO’s filmmakers under the bus if they stand in the way of expanding his corporate empire and fattening his pockets. But censorship is bad for business.”
From Variety US