Who will Warner Bros. Discovery employees welcome as their new overlords? The feeling among the rank-and-file has changed over the last several months: Most WBD staffers are now supportive of Netflix‘s deal to acquire Warner Bros.’s studios and HBO Max rather than having WBD subsumed in its entirety by David Ellison’s Paramount Skydance, sources tell Variety.
Inside Warner Bros. Discovery, the “Paramount vs. Netflix” debate seems to largely have been resolved. Having more than two months to consider what an acquisition by either conglomerate might mean for the legacy of Warner Bros. — and more important, for the current workforce — there appears to be a rather large consensus now that Netflix would be preferable.
But that doesn’t mean that everyone is rooting for Netflix to win the prolonged sale process. On the Burbank lot, big pockets of skepticism remain about how Netflix’s ownership will affect the film studio and the future of theatrical distribution in general, despite the repeated pledges made by Netflix brass about committing to a 45-day exhibition window for theatrical films.
But Netflix co-CEOs Ted Sarandos and Greg Peters have won over many WBD staffers with their assurances and vision for how they plan to operate the combined company. There is now “some familiarity with the idea” and acceptance of the possibility that big chunks of WBD will become part of Netflix, says one Warner Bros. Discovery corporate exec.
At this moment, Warner Bros. Discovery is still in play: The company opened a seven-day window for talks with Paramount Skydance, with Netflix’s approval, to see if Ellison and his backers will raise their bid over the $30/share they have stuck with in their most recent offers. For now, WBD’s board is still recommending investors vote for the Netflix deal at the March 20 special meeting of shareholders. The negotiating window with Paramount ends Monday, Feb. 23, and Warner Bros. Discovery is set to hold its Q4 2025 earnings call just a few days later on Feb. 26 — when things could still be up in the air. (Netflix has four days to make a counteroffer in the event Paramount puts forward a higher bid.)
According to insiders, following the Netflix-WBD Dec. 5 deal announcement — and Paramount’s launch of a hostile takeover effort — the initial sentiment inside Warner Bros. was divided depending on the division, based on where staffers thought strategically they might fare better: under Paramount or Netflix ownership.
In the early stages, there were definitely departments that thought Paramount might be a better choice. Some at HBO, for example, figured that HBO Max would easily be the bigger dog vs. Paramount+. And at the Warner Bros. studios, there was the fear that Netflix would shift the strategy for productions to feed its own streaming beast.
But Paramount Skydance’s unrelentless cost cutting and layoffs since that deal closed in August became a warning sign for WBD staffers that the same would likely happen at Warner Bros. Discovery should a merger happen. Paramount has forecast upwards of $6 billion in cost synergies if it merged with WBD — which would mean big job cuts.
Under Netflix, according to the company’s plan, the film studio, the lot, the TV studio will all survive — and remain Warner Bros.-branded. Many of the film folks inside Warner Bros., who initially bought into the worries that Sarandos would kill the theatrical exhibition business, have come to believe that Netflix plans to keep the Warner Bros. business mostly intact.
One WBD insider says that, when the bidding war first erupted, “nobody wanted a transaction.” There was already sense of “weariness from the integration of the two companies” following Discovery Communications’ merger with WarnerMedia, which closed in April 2022. When news of Paramount’s interest in acquiring Warner Bros. Discovery came out in September, WBD employees were still processing the company’s planned split into two entities: one with studios and streaming, and the other mostly housing linear TV networks.
Regarding Netflix’s proposed acquisition, a key moment in changing hearts and minds at WBD came on Dec. 17 when, two weeks after announcing their deal with WBD, Sarandos and Peters visited the Warner Bros. studio lot, hosted by Warner Bros. Discovery chief David Zaslav, and the Netflix duo addressed employees in a town hall-style appearance.
“Ted and Greg really worked at it,” a WBD exec says. “They spoke directly about their intentions and why they wanted it. That put a lot of people in a better place about it.”
Says another insider, “Even HBO seems to be at peace with Netflix more than it was at the beginning.” HBO execs realized they could follow John Landgraf’s model of FX (housed within the Disney Entertainment division) of being a prestige, stand-alone brand inside the new company, for example.
Meanwhile, Paramount Skydance’s Ellison cozy relationship with the Trump administration has given WBD staffers pause — as has the recent moves by the company to swing CBS News to the right, under the leadership of Bari Weiss, CBS News’ editor-in-chief. “People quickly saw the craziness of the Ellisons,” one WBD employee says.
Under the Netflix deal, WBD networks like CNN, TBS, HGTV and Food Network would be spun off into Discovery Global, a new company headed by Gunnar Wiedenfels as CEO. Paramount is proposing to buy Warner Bros. Discovery in toto. And Paramount’s recent moves with CBS News as well as CBS’s lawyers intervening to keep an interview with Democratic senate candidate James Talarico off “The Late Show With Stephen Colbert” broadcast have disturbed those within the TV side of WBD’s house.
“To watch CBS News crumble is disconcerting when Paramount is trying to come in and buy Warner Bros. Discovery including CNN,” says a CNN source. Under Weiss’ leadership, for example, 11 members out of a production staff of about 40 on “CBS Nightly News” have opted to take buyouts as a new round of layoffs could be coming. Variety recently reported that CBS News “is veering toward dysfunction, with a management team led by Bari Weiss that doesn’t value the standards held by veteran journalists.” The best outcome for CNN, the news network staffer believes, is to be part of the Discovery Global fold.
Meanwhile, the evidence of what happened when Disney purchased the 21st Century Fox assets — which essentially erased an entire Hollywood studio — is fresh for Warner Bros. staffers, many of whom are lifers or have spent decades on the Burbank lot. There’s a specific Warner Bros. culture that comes from a company that has managed to stay mostly intact despite several ownership changes in recent years. The question of what happens to the Warner Bros. lot, as well as the Warner Bros. film and TV studios, is alarming when staffers there ponder the likelihood that, if Paramount is the winning suitor, those legendary properties could undergo a dramatic upheaval. For his part, Ellison has promised that a combined Paramount-Warner Bros. would produce at least 30 films for theatrical release annually.
Long before Netflix signed a deal to buy Warner Bros., the studio’s personnel had resigned themselves to the fact that Zaslav’s ultimate plan was probably to sell the company. There are still widespread suspicions that Netflix would honor the film’s slate existing theatrical commitments — before ultimately shortening the windows to the point where the theater business is threatened.
One top media executive predicted that Sarandos might be more interested in theatrical than his public comments about its the moviegoing experience being “outdated” might suggest, noting that he loses out on many top projects because Netflix can’t promise a more robust rollout in cinemas. There’s also the incremental revenue streams that ticket sales could open up as well as a chance to raise the cultural profile of the films that hit theaters before they premiere on the service, to say nothing of Warner’s arsenal of intellectual property.
“This is a long-term play,” the executive predicted. “It can get Netflix into consumer products and theme parks. It opens up a lot of avenues.”
Sarandos, for his part, has said his comments that were dismissive of the movie-theater experience came before Netflix was in a position to own a major supplier in the theatrical business. “I want to win opening weekend. I want to win box office,” Sarandos said in a recent interview with the New York Times.
The Warner Bros. film studio’s leaders, Pam Abdy and Michael De Luca, are riding high on a series of box office successes like “Sinners” and “Weapons” that could make them a valuable addition to either Netflix or Paramount. But those companies already have a talented crop of executives in place who may not want to share authority. As for James Gunn and Peter Safran, the heads of DC Studios, their jobs seem more secure with production about to start in a few weeks on “Superman: Man of Tomorrow” and the long-awaited sequel to “The Batman” hitting cameras in late May. Replacing them at this juncture would likely be too disruptive.
If there’s any piece of advice Warner Bros. execs have for Netflix, it’s to keep the current Warner Bros. structure as intact as possible inside the new entity. Keep it functional, and that will help make the transition more of a success, sources say.
Of course, the looming prospect of a major M&A event is top-of-mind for everyone at Warner Bros. Discovery’s divisions. But until a deal is done — and closed — it’s got to be business as usual. “Everyone is thinking about it,” one WBD staffer says. “The main vibe is, people want this to be resolved.” For now, this insider says: “It’s heads-down and truck along and do your thing.”
As one WB studio employee confessed: “People just want this to be over.”
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