What Really Happened in the Battle for Warner Bros.

0:00For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare. Small businesses are the pulse of every community. They bring people together, create opportunities, and drive growth.

0:36Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn more at chase.com slash business. Chase for Business. Make more of what's yours. The Chase Mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank, NA. Member FDIC. Copyright 2026. JPMorgan Chase and Company. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results.

1:13At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Bloomberg Audio Studios. Podcasts. Radio. News. It was a pretty stunning upset. Paramount Skydance finally clinched the deal to buy Warner Brothers Discovery after a months-long bidding war with Netflix. The final price tag?

1:58$110 billion. $31 a share. Yeah, it's just about the biggest in quite a few years. Bloomberg's Chris Palmieri said that number is just so much bigger than other big media deals we've seen. You go back to Disney Fox, it's around$70,$80 billion. So this is a big number. I was surprised because media values have declined in recent years. But the amount of this deal is dramatic. Back in December, Netflix had offered to buy the studio and its streaming business for nearly$83 billion. And Warner Brothers board accepted. It seemed like the end of the story. But it wasn't. When did the tides actually start to shift toward Paramount?

2:43Our reporting indicates it was Saturday, February 21st. Bloomberg's Lucas Shaw says that's when Paramount CEO David Ellison called up Warner Brothers CEO David Zaslav and said, We've got an offer that's going to address all your remaining concerns. Paramount submitted an offer that was really close to what Warner Brothers wanted. And people who were involved in the deal said that at that point they were on the five yard line. Paramount Skydance has won a bidding war with Netflix over Warner Brothers Discovery. Paramount's persistence paid off. The board changed their mind. Money talks. They went to what they thought would get their shareholders paid the most.

3:22And as a result, get them paid the most.

3:29I'm Sarah Holder, and this is The Big Take from Bloomberg News. Today on the show, the anatomy of a deal. Why Netflix bowed out. The regulatory hurdles that remain. And how these two big movie studios will become one.

3:50When the bidding war over Warner Brothers' discovery started in October of last year, we saw ever-increasing offers from each side, endless negotiations, and a laundry list of powerful people getting involved, including President Trump. There was even some talk that Netflix may have walked away from the deal because of political pressure. But entertainment and media reporter Lucas Shaw, who also writes the screen time newsletter for Bloomberg, says it really came down to price. It was really a financial decision. Lucas got the first interview with Netflix co-CEO Ted Sarandos after his company dropped out of the bidding war for Paramount.

4:29Ted was adamant that this had nothing to do with politics, despite a lot of the speculation because he'd been in D.C. the week or really the day that Netflix pulled out. and had been to the White House and met with the Department of Justice. They had put forth their best and final offer in early December and that Paramount kept revising its offer. David Ellison had made it clear that not only was he coming over the top here, but that he would continue to bid more and that they viewed him as an irrational buyer. So Netflix walked away. But not empty-handed. The company got a big breakup fee from Paramount and a bump in share price from investors who weren't totally sold on the plan to buy Warner Brothers in the first place.

5:15Their stock is up and they got paid$2.8 billion, which will make you a lot of Adam Sandler movies pretty quick. Bloomberg's entertainment and telecom reporter Chris Palmieri. People often say that the best deals are the ones you never do. I think that's certainly the case in Netflix. So Lucas, going back in time a little bit, why has everyone wanted Warner Brothers Discovery, These two massive studios, Netflix and Paramount Skydance, have spent a lot of time, a lot of energy, and a lot of money to acquire it. What made it worth fighting for so hard? Well, it's a rare asset, right? Warner Brothers is one of, if not the most productive studio in Hollywood.

5:54If you look across film and television, it's kind of year after year, probably the number two or three movie studio after Disney. Its television studio produces some of the most popular shows in the world. Ted Lasso, Abbott Elementary, it's the home of Friends and Big Bang Theory. It's got HBO, which is both a great brand and a library of hit programs. And so I think people always see potential in that. It's never really been realized by one of these owners. People try to figure out sort of how to better position HBO as a competitor to Netflix, how to use the studio. And it hasn't quite panned out, but it doesn't stop people from always wanting to try because there are only so many studios you can buy.

6:30Unique as Warner Brothers may be, Chris says it was surprising to see David Ellison put his hat in the ring to try and buy it, because he'd only recently taken over Paramount. Ellison's company, Skydance Media, announced it would take control of the studio for$8 billion in 2024. The deal took nearly a year to finalize, after going through regulatory hurdles and FCC approval. David Ellison fought a very hard-fought battle to take control of Paramount, and just closed on that deal in August of last year. And literally a month later, he was bidding for Warner Brothers, a staggering amount of work to, you know, consolidate Paramount and then to try to buy an even bigger company.

7:12And so$19 a share was his first offer. There was eight or nine offers since then. That steady drumbeat. I mean, it was a multi-pronged attack, if you will, on the Netflix deal by David Ellison and Paramount. They went to shareholders and they said, you know, there should be a bidding war here. We're offering more. That deal isn't good. You know, they went to politicians and played every card they could in that department. David Ellison went to the White House. He went overseas. Meeting the president, meeting with regulators, everyone you could imagine. You gave us some context for that$110 billion figure, just how big that is in the scale of other media company deals.

7:54But is there a danger that they're overpaying? Oh, yeah. I've joked many times that I don't even think it's a joke, but this company is like the King Tut's tomb of corporate world because everyone that touches it is sort of cursed. You think about AOL buying it, AT &T buying it, then the Discovery merger. None of those deals have worked. And so this is going to be a major challenge. The story will not be over by September 30th or whenever they hope to close this deal. It's going to be major consolidation. We've never really seen consolidation of two Hollywood studios like this. This is a situation where you'll have two separate studio lots, Paramount and Warner, two separate movie studios, different people heading those.

8:37That's not really been the case ever. So we'll have to see how that works. major consolidation in the cable networks. So, you know, this is now a business that will stretch from MTV, CNN, HGTV, CBS, I mean, just a huge television arm that's facing major challenges because of the meltdown of traditional TV. And then this consolidation, which is really what this is all about, the streaming business. So HBO Max and Paramount Plus becomes one, You know, they'll still be facing five or six other major competitors. Can they make that work? Can they make that pay off? It's a lot of work ahead. To pay for Warner Brothers, the Ellison family and their partner, Redbird Capital, have pledged to invest$47 billion in the deal.

9:24Some of that money will likely come from other equity partners, including three Middle Eastern sovereign wealth funds identified in public filings. And then there's the debt. They're taking on an enormous amount of debt, well north of$70 billion to complete this transaction. Pocket change. Yeah. Yeah. Yeah. Yeah. It's not nothing. Well, Lucas, we talked about how adamant Netflix was, that politics wasn't behind their decision to stand down here. But as we mentioned before, Paramount CEO David Ellison was lobbying hard for President Trump's support. And Trump wasn't shy about rooting for Paramount in this bidding war.

10:06So I'm wondering if you think politics had any influence on the outcome of this deal? I think Trump had pretty minimal influence. Where politics had the most influence was on the Warner Brothers shareholders, right? Right. After Warner Brothers announced this deal with Netflix, what the Ellisons did really effectively was kind of rally a bunch of other people to oppose the deal and be concerned about it. That was senators. That was Republican attorneys general. They certainly worked the Department of Justice and even, you know, figures in Hollywood. They really scared about the deal. And so all of this this feeling that the Netflix deal would face a stiff review, whether it was in the U.S.

10:45or or Europe, spooked a lot of Warner Brothers shareholders who are just saying, I want my money now. Like, get me as much money as quickly as possible. Let's get out of this. And they started to make a lot of noise and put pressure on the Warner Brothers board. So though I think Trump and politics played a factor in a lot of the decision-making, it was strongest with influencing Warner Brothers shareholders who then in turn influenced the Warner Brothers board.

11:11After the break, what will it take to bring these two big studios together? Past mergers might hold some answers. Plus, how the deal could impact the news and content you watch and stream.

11:29For many men, mental health challenges aren't recognized until they've already taken a toll. Work pressure, financial stress, changing relationships, and traditional expectations around masculinity can quietly wear men down, often without clear warning signs. In Season 3 of The Visibility Gap, Dr. Guy Winch and his guests explore how these pressures show up, how to spot them earlier, and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results.

12:05At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off. Deep in the work that moves the business. Let's create smarter business. IBM. Everyone has been there. Your team's feedback is scattered across emails, chats, and sticky notes. It's a mess. But PDF Spaces and Adobe Acrobat gives you one collaborative workspace to streamline every file and comment.

12:44So, if you need six departments to finally agree on a proposal, do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page? Do that, do that, do that with Acrobat. Learn more at adobe.com slash do that with Acrobat.

13:12The bidding war is over. And Bloomberg's Lucas Shaw and Chris Palmieri told me that now comes the even harder part, combining Paramount Skydance and Warner Brothers Discovery into one mega studio. There's a tremendous amount of overlap. They both own film and TV studios. They both own cable networks. They both own streaming services. There is very little that one does that the other doesn't do, which is why it's a kind of widely held belief that this will result in thousands of job losses. Paramount, when they initially were talking about their deal, I think touted about$6 billion in synergies.

13:46Some people think it might be even higher. Exactly what that's going to look like remains to be seen, right? Are they going to keep Paramount and Warner Brothers as independent labels as studios or combine them? They're going to say that they're independent and that they're going to increase output in both places. The history of mergers suggests that they will in fact curtail output over time, but they have to say they're going to boost it to get it approved. Same deal on the TV studio side. With the TV networks, I assume it's going to be a bloodbath. They're just going to fire a ton of people and merge all those together.

14:16Yeah. David Ellison has really pounded the table and said they're going to make more content, more movies, more TV shows. It's going to be a giant, unwieldy conglomerate with all of these different parts competing for attention and for money, whether that translates into, you know, more content or they ultimately put pressure on to cut costs and maybe less choice for us. You mentioned looking at history to kind of serve as a guide to how a merger like this might play out. What is the track record of these types of massive media mergers when you combine something like Warner Brothers and Paramount?

14:52Piss poor would be the answer. There has never been one of these. These deals don't work, right? I mean, just look at the history of Warner Brothers, right? Time Warner merged with AOL, kind of textbook example of one of the worst mergers in the history of business. Forget just the entertainment business. Time Warner sells to AT &T. That didn't work very well. Warner Media merges with Discovery. That doesn't work very well, which brings us to this point. There just are not a lot of examples, at least in the entertainment business, of multibillion-dollar deals that worked out well for the acquirer.

15:24Yeah. I mean, if the track record of these kinds of media mergers is so disastrous, is piss poor, as Luca said, why keep trying? Hubris, ego. So, you know, if you're struggling and you've tried everything else, cutting costs, you know, spending on these rights or this rights, then the idea of just, oh, I'll just bulk up. It'll be so much easier if I just buy them. I think that's a compelling argument that people can make to themselves and consultants make to them and bankers make to them. But ultimately, I think there is a lot of ego in this as well. We touched on the regulatory pressure a Netflix Warner Brothers merger may have encountered.

16:00What about Paramount Warner Brothers? What does the regulatory landscape look like there? Well, by a lot of traditional metrics, the paramount deal is actually worse from a regulatory perspective, or one that would be more likely to face scrutiny because you're combining like assets, right? So you're combining two movie studios. It creates one movie studio that would have north of 20 % market share, more than likely. You're combining a bunch of cable networks. And then you add in some of the less consumer-facing ones, but more the monopsony, the ecosystem. its impact on suppliers, is going to be one of, if not the biggest producer of film and television in the world.

16:37And so what kind of market power will it have over writers and directors? And how might that regulatory scrutiny play out over the next few months? It seems pretty clear that the Department of Justice is not going to go after this deal. They've sort of already breezed through a lot of it. They may have to resubmit what they're doing, but nobody's expecting the DOJ to file suit against it. The main questions are in Europe and with state attorneys general from Democratic states. You know, I think in Europe there will be a review and there might need to be kind of one or two changes made, maybe a divestment or two, but nobody's expecting it to block the full deal.

17:12I think you could see state attorneys general try to block the whole deal. Whether they'll be successful is sort of anyone's guess. I think more likely there would need to be some remedies, sort of like in Europe. Lucas, if this goes through, a lot of viewers are worried about how this might impact the content they consume. For example, if we look at news media, Paramount already owns CBS. Ellison hired Barry Weiss to be CBS's editor-in-chief, and she's been critical of mainstream media outlets, accusing them of liberal bias. She's opposed to cancel culture, views that make her popular with conservatives.

17:49And she's already clashed with some in the newsroom over editorial direction and concerns that she's willing to appease the Trump administration. What does it mean for the news landscape in the U.S. if Paramount now also owns CNN? That one is hard to say because I don't sense that David Ellison is spending a significant amount of his time thinking about the news business. It's not his number one priority. He's been more focused on film and television and entertainment. Obviously, the big concern that some people have is that because the Ellisons, in particular Larry Ellison, is close to Donald Trump and Republican politicians, that they'll sort of tilt CNN more to the right.

18:26They have not said anything to suggest that they're going to do that, but it's understandable why people would be concerned about it. Recently, in an interview with CNBC, David Ellison tried to reassure journalists at CNN, saying that, quote, editorial independence will absolutely be maintained. The comments certainly didn't surprise me. He's going to say whatever he needs to do to sort of appease and mollify folks. CBS News was not a centerpiece of his strategy for Paramount, Nor is CNN going to be a centerpiece of a strategy for Warner Brothers. It is a nice asset to buy. But if you told him that he could buy it without CNN, I'm sure he'd be happy to do that.

19:06We've been talking about media consolidation broadly in this country, but there's also been consolidation of the media happening under the Ellison family. I'm wondering what completing this deal would mean for the Ellison's power and influence over the media business in the U.S. I mean, it puts them in charge of one of the largest and most powerful media empires in the world. Two studios, dozens of TV networks, two major streaming services, you know, by kind of any measurement. But in terms of revenue, in terms of market cap, in terms of streaming subscribers, it makes them the owners of one of the three to five biggest media companies in the world.

19:42And of course, Oracle just invested in TikTok as well. So certainly part of this narrative that there's a sort of a broader, more conservative takeover of the mainstream media. And I guess you can argue whether that's good or bad, depending on your politics. But many people have made the case that Paramount is moving in that direction. To Chris's point, what are David Elson's plans for this massive company that he's now in charge of? I mean, he went from running a relatively small business in Skydance to leveling up and running a much bigger business in Paramount. And now he's going to be on top of something with tens of thousands of employees.

20:17It's just unlike anything he's done before.

20:22This is The Big Take from Bloomberg News. I'm Sarah Holder. To get more from The Big Take and unlimited access to all of Bloomberg.com, subscribe today at Bloomberg.com slash podcast offer. If you like this episode, make sure to subscribe and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow.

21:14and how men can access meaningful support. Listen to the new season of The Visibility Gap, a podcast presented by Cigna Healthcare. From coast to coast, unlock adventure at Red Lion Hotels by Sinesta, where restful sleep, friendly service, and trusted local knowledge are part of every stay. Red Lion makes it easy to feel welcomed, comfortable, and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip. When you sign up for Sinesta Travel Pass, you'll get their best rates instantly. Go to Sinesta.com to book your stay and unlock the best rates with Sinesta Travel Pass.

21:53Here today, roam tomorrow. Join now at Sinesta.com. Terms and conditions apply. These days, it seems like AI agents are just about everywhere you turn, every field and every function. But without identity, you can't trust they'll serve your business instead of jeopardizing it. Fortunately, Okta helps you get identity right by securing your AI agent's identity. giving you a single layer of control, a single standard of trust. So whether an AI agent supports a single user or your entire enterprise, with Okta, you'll turn risk into opportunity. Secure every agent. Secure any agent. Okta secures AI.