Since the merger of Paramount and Skydance led by David Ellison, the entertainment industry has been looking like a giant game of monopoly. Ellison seems to be favorable to other studio heads and companies considering he wants to make films that are focused on theatrical releases and creating a better streaming service. In a letter to the company on August 7th, Ellison wants an emphasis on high-quality storytelling and “cutting edge” technology. Before we get into the weeds, David Ellison is the son of Larry Ellison, founder of Oracle. He has been involved in Hollywood for some time and was recently the head of Skydance studios. He served as a producer on much of the Mission Impossible films and even True Grit; however, those are probably the most recognizable ones in the library. 

Ellison doesn’t seem to be stopping at just Paramount. He had his sights set on Warner Bros. Discovery (WBD) until Netflix swooped in on December 5, 2025, and acquired WBD for $82.7 billion immediately sending the industry and many cinephiles into a frenzy. This deal is still fresh and the most consumers and regulators can do is wait and see what actually happens. Almost instantly there was a large online group calling this the death of cinema and the end to movie theaters and while this may not be necessarily wrong, there still needs to be government approval for a merger this size. Furthermore, people who are interested in movies and follow the entertainment industry closely are known for saying cinema is dead. Most of the time, this isn’t the case. Yet, the Netflix and WBD deal is different. This is a clear Antitrust violation codified in 15 U.S.C §§1-38 more commonly known as the Sherman Antitrust Act. This Act prohibits activities that restrict interstate commerce and competition in the marketplace. The reason that the deal violates the Act is because the entertainment industry is starting to rely more on mergers and acquisitions partly due to a more sympathetic government, but also because companies want to move away from being on “defense” and into offense. The change in strategy ultimately leads to greater M&A which may further impede free market competition.

In a world where antitrust is not a factor, what would this new Frankenstein company look like and who would be impacted the most? If Netflix is allowed to follow through with this deal, then WBD and many of the shows that you watch on HBO may be lumped into the Netflix library. While HBO (the streaming service and library) is synonymous with high quality shows such as Game of Thrones, Curb Your Enthusiasm, and Sopranos it may be smart to keep HBO as its own service allowing Netflix to use it for more auteur driven projects. While continuing to make big budget tv shows and films on their own site. In addition to this, another interesting aspect is what will happen to downstream industries that rely on films. For example, how will movie theaters handle less volume? Do they pivot to eventizing films like Wicked or Taylor Swift’s concert movie? If there are going to be less films in theaters because of this merger, then theaters may have to transition from big budget studio films to more independent movies that people are going to want to see together. On the other hand, what if the overall volume stays the same, but they are in theaters for less time? Before COVID, studios and theaters negotiated a deal where the average window was 30 to 45 days.  What may happen is that films like Minecraft or Sinners are pulled from the big screen within weeks of being released to go directly to the streaming service. Because of shortened windows, films that may have increased their box office week after week or decreased marginally due to word of mouth could be negatively impacted.  

On the morning of December 8, Paramount submitted a hostile bid for WBD totalling $108.4 billion or $30 per share. This escalates an already unsettled entertainment industry which is still trying to wrap its head around a possible Netflix and WBD merger. Although unlikely to happen given the obvious Antitrust violation and outspoken opposition to this such as SAG-AFTRA issuing a statement highlighting the serious creative toll it would cause. A deal between Netflix or Paramount with WBD would undoubtedly destroy the industry. Having only a small number of companies controlling film may create a chilling effect for new voices being heard or a race to the bottom where one company attempts to purchase all of the remaining assets. 

*This article will be updated as the story unfolds* 

Song of the day – See you on Monday (You’re Lost) – Tame Impala 

Sources: 

Apologies for non-adherence to Bluebook standards

Sources are in order of appearance 

1.  A Message From Our Chairman and CEO | Paramount, PARAMOUNT (Aug. 7, 2025), see more at https://www.paramount.com/news/david-ellison-ceo-letter-merger-2025 
2.  Films, SKYDANCE (Dec. 8, 2025), see more at https://skydance.com/film/ 
3.  Netflix to Acquire Warner Bros. Following Separation of Discovery Global for a Total Enterprise Value of $82.7 Billion (Equity Value of $72 Billion), NETFLIX (Dec. 5, 2025), see more at https://about.netflix.com/en/news/netflix-to-acquire-warner-bros 
4.  Sherman Antitrust Act, LEGAL INFORMATION INSTITUTE (Dec. 8, 2025), see more at https://www.law.cornell.edu/wex/sherman_antitrust_act 
5.  Todd Spangler, Media M&A in 2025: Table Set for More Deal Activity This Year, VARIETY (Jan. 3, 2025), see more at https://variety.com/2025/biz/news/media-mergers-acquisitions-2025-deals-1236263982/
6. Sarah Whitten, Netflix’s plan to buy Warner Bros. throws the theater industry into upheaval, CNBC (Dec. 5, 2025) see more athttps://www.cnbc.com/2025/12/05/netflix-warner-bros-deal-theater-industry-upheaval.html
   1. See also Sarah Whitten, ‘Inside Out 2’ arrives in theaters and could hit a 100-day run. Here’s why that’s increasingly rare, CNBC (Jun. 14, 2024), see more at https://www.cnbc.com/2024/06/14/inside-out-2-opening-theatrical-window.html 
7.  David Faber and Alex Sherman, Paramount Skydance launches hostile bid for WBD to ‘finish what we started’, CEO Ellison tells CNBC (Dec. 8, 2025), see more at https://www.cnbc.com/2025/12/08/paramount-skydance-hostile-bid-wbd-netflix.html
8. SAG-AFTRA Statement Regarding Proposed Netflix/Warner Bros. Transaction, SAG-AFTRA (Dec. 5, 2025), see more at https://www.sagaftra.org/sag-aftra-statement-regarding-proposed-netflixwarner-bros-transaction

*All opinions are my own. Not reflective of any school or club association*