If anyone thinks theater owners will lay down their weapons and stop fighting if Netflix doesn’t prevail in its $82.7 billion bid for Warner Bros., think again. Just as troubling, if not more so, is the risk of what would happen if David Ellison succeeded in acquiring two of the old Hollywood studios and merging Paramount with Warner Bros.
That’s why no one at Cinema United, the leading trade organization for exhibitors, was jumping for joy on Thursday when Netflix, in a stunning turn of events, pulled out of its blockbuster deal after opening up the Warner Bros. movie board. Discovery was open enough for Ellison’s Paramount to come back and sweeten its bid to buy out WBD outright.
Although showrunners didn’t necessarily trust Netflix co-CEO Ted Sarandos when he pledged to give Warner Bros. films the title. Exclusively running for 45 days in theaters – since day one at Netflix, it has refused to commit to theatrical windows – they are having a hard time understanding that Warners and Paramount would be able to release a combined collection 30 films year. Furthermore, they believe a merger would give one studio too much power.
Cinema United (formerly the National Association of Movie Theater Owners) is sure to use the merger as a calling card when trying to stop weddings during visits to Capitol Hill, the U.S. Department of Justice, and various state attorneys general.
One major obstacle is that Ellison has powerful allies on his side. His father, mega-billionaire Larry Ellison, was a longtime close friend of President Donald Trump, who in turn took the younger Ellison under his wing, including inviting him to the State of the Union address earlier this week.
So far, the spotlight has been on Netflix, because it was the buyer in waiting. Now it will turn into Ellison, the first major Hollywood studio merger since Disney acquired 20th Century Fox, a deal that finally closed in 2019 in a $71.3 billion deal.
“If Paramount or any other major studio ends up displacing Netflix as a buyer, our concerns are no less dire,” Cinema United said in a statement following a Senate Judiciary Subcommittee hearing on February 3. “For example, a combination of Paramount and Warner Bros. could combine as much as 40 percent of the domestic box office each year in the hands of one dominant studio.”
At the same time, it could still reduce the total number of versions. In 2016, Disney and 20th Century Fox released 26 new titles in more than 2,000 home theaters each. Last year, the overall total was 14, a decrease of 46 percent. The impact of this decline on the domestic box office is that 20th (Fox is no longer part of the name) is estimated to gross $900 million less in 2025 than it did in 2016, a decline of 63 percent.
When Ellison’s Skydance company acquired Paramount in August 2025, he emphasized investing in content and technology. But his focus soon turned to buying WBD, a decision that ultimately required billions in debt financing. Many simply assume that Larry Ellison, currently the sixth richest man in the world, who has already provided a personal guarantee of more than $45 billion, will continue to provide financial assistance as needed because he has been a driving force in the pursuit of WBD.
On February 3, Senator Mike Lee (R-Utah) questioned Sarandos during a hearing of the Judiciary Antitrust Subcommittee, which he chairs. Lee, a self-proclaimed MAGA member, invited Ellison to attend, but Ellison declined. Lee had scheduled a follow-up hearing for March 4; It remains to be seen whether he will keep that on the record now that Sarandos is out of the mix, though Sen. Cory Booker of New Jersey, the committee’s ranking Democrat, immediately called for the hearing to continue until Ellison is asked to answer their questions.
And in California, California Attorney General Rob Bonta wasted no time stepping in regarding Paramount’s proposed merger with WBD. “Paramount/Warner Brothers is not a done deal,” Bonta said Thursday. “These two Hollywood giants have not passed regulatory scrutiny – the California Department of Justice has an open investigation, and we intend to be active in our review.”
