The day after Netflix finalized its purchase of Warner Bros., David Ellison, Chairman of Paramount Skydance, gathered a group of key advisors – including his father, Larry Ellison, a billionaire – for an urgent meeting.
On a cold December day, the Ellisons and their colleagues, angered by David Zaslav’s decision to halt the sale, started making plans to regain control.
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What the Paramount-Warner Bros. Discovery deal means for the cable network CNN.
To challenge Warner Bros. Discovery and worry its investors, they pursued a three-pronged strategy: filing a lawsuit, attempting a hostile takeover, and directly appealing to both the Trump administration and Republican members of Congress.
According to one source familiar with the auction, there was a very well-organized and carefully executed strategy behind the bidding process. This person wasn’t allowed to speak on the record.
In a surprising move late Thursday, Netflix withdrew from the competition to acquire Warner Bros. Discovery – the company behind HBO, HBO Max, CNN, TBS, Food Network, and the Warner Bros. film and TV studios. This decision effectively allows Paramount to purchase Warner Bros. Discovery in a deal worth over $111 billion.
Netflix changed course just hours after Ted Sarandos, its co-CEO, met with Attorney General Pam Bondi and a White House aide. While the meeting was friendly, officials indicated that the deal was encountering major obstacles in Washington, according to a source with knowledge of the discussion who wasn’t permitted to speak on the record.
Before the meeting even happened, things had already begun to shift dramatically for Paramount, becoming a complex situation involving strong maneuvering, political games, and high-stakes risks.
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David Ellison, the head of Paramount, expressed his satisfaction that Warner Bros.’ board agreed his company’s offer was better than others. He’s been trying to acquire Warner Bros. since last autumn.
Jonathan Miller, CEO of Integrated Media Co., believes Paramount handled things flawlessly, while Netflix did a good job. He explained that Paramount took the necessary steps at precisely the right time, waiting until the last possible moment.
Honestly, the whole thing came down to Larry Ellison. He’s got a massive fortune – we’re talking around $200 billion – and he’s well-connected, especially with President Trump and the Republican party in Congress. That really seemed to be the deciding factor, if you ask me.
Paramount brought on Makan Delrahim, who previously led antitrust efforts for Donald Trump, to manage their legal and regulatory strategies.
During a Senate hearing earlier this month, Republican senators strongly criticized Netflix co-CEO Ted Sarandos, raising concerns about the company potentially using its market power unfairly and featuring content they considered overly focused on progressive social issues.
David Ellison didn’t show up for a previous hearing, but this week he was at President Trump’s State of the Union address. He attended as a guest of Senator Lindsey Graham (R-S.C.), and the two were photographed smiling and giving a thumbs-up, which Graham shared on his X account.
Netflix announced on Friday that Paramount paid them a $2.8 billion fee as part of ending their agreement.
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David Ellison, the CEO of Skydance Media and son of Larry Ellison, is now a leading candidate to acquire Paramount Studios.
Even before David Ellison’s family bought Paramount and CBS last summer, the 43-year-old tech entrepreneur and pilot was interested in acquiring Warner Bros. Discovery.
Paramount’s properties, like MTV, Nickelodeon, and its studio lot, have been losing their strength. Larry Ellison realized he needed a stronger company – Warner Bros. Discovery – to reach his goals.
David Ellison stated on Friday that their goal with Warner Bros. Discovery has always been to respect the history of both companies while also creating a modern media and entertainment leader. He expressed strong enthusiasm for the future.
David Zaslav, the CEO of Warner Bros. Discovery, originally wasn’t in favor of the deal with Paramount, but now stated he’s eager to collaborate with them to finalize this significant agreement.
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President Trump recently warned Netflix that they would face repercussions if they didn’t remove Susan Rice from their board of directors.
Netflix stated it wouldn’t increase its offer of $82.7 billion, an amount the Warner Bros. Discovery board had already agreed to on December 4th.
In a statement, Netflix CEOs Ted Sarandos and Greg Peters expressed their disappointment, stating they were confident they could have successfully managed Warner Bros.’ well-known brands, boosted the entertainment industry, and supported more jobs in film and television production.
I always understood that Netflix saw this deal as something they’d like to do if the terms were good, but it wasn’t essential to their plans. They weren’t going to force it, no matter what. It really wasn’t a priority for them, just a potential bonus if everything aligned perfectly.
Netflix might have underestimated the Ellison family’s resolve when it agreed on February 16th to let Paramount re-enter the competition.
The company, headquartered in Los Gatos, California, had already won the auction and reached an agreement. All that remained was approval from its shareholders.
According to Miller, while it wasn’t strictly necessary, they allowed Paramount to rejoin the process due to concerns about potential legal challenges.
Netflix’s stock price also dropped sharply—it lost about 25% of its value—after investors found out the company was planning to offer an ad-supported streaming tier.
Upon news that Netflix had withdrawn, its shares soared Friday nearly 14% to $96.24.
I was really glad to see Paramount back in the auction, and they came prepared! Their new offer was a huge improvement over what they’d put on the table last December – it was clear they were serious this time.
Ellison promised to personally back the deal, covering the $45.7 billion needed to complete it. He also agreed to invest additional funds if lenders became concerned about Paramount’s financial situation, ensuring the financing would go through.
Warner Bros. Discovery board members were relieved by this commitment, as they had been worried for weeks that Larry Ellison might not agree to the deal, sources familiar with the negotiations said. These sources were not permitted to discuss the matter publicly.
Paramount worked hard to convince theater owners that Netflix’s approach – encouraging people to watch movies at home – was a problem for the industry. They successfully gained the support of these theater owners.
During the last two weeks, Sarandos got dragged into two ugly controversies.
Well-known director James Cameron recently spoke out in support of Paramount, warning that if Netflix were to acquire them, many people in the film industry could lose their jobs. This comes at a difficult time, as production has already slowed down in Southern California, impacting the livelihoods of thousands of film workers.
Last week, Donald Trump attacked Susan Rice, a former top official in both the Obama and Biden administrations, who serves on Netflix’s board. In a social media post, Trump called Rice incompetent and threatened Netflix with unspecified repercussions if they didn’t fire her.
The threat underscored the dicey environment for Netflix.
Paramount also created uncertainty about Netflix with key figures like politicians, regulators, Warner investors, and eventually, Warner’s own board members.
Paramount convinced Warner Bros. executives that the merger would easily be approved by regulators and completed swiftly. Demonstrating their optimism, they even applied for Justice Department approval in December, before a formal agreement was in place.
The deadline for the Justice Department to express any concerns about Paramount’s plan to acquire Warner has passed, and the Trump administration’s regulators haven’t publicly commented on it.
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Larry Ellison, a major figure in the tech world, attempted to buy Warner Bros. Discovery, but Netflix won the deal. This has led to a potential legal battle that could significantly impact the future of the entertainment industry.
According to a report from TD Cowen on Friday, experts predict the deal will likely go through. They acknowledge potential antitrust concerns, such as increased prices for cable TV and lower pay for those working in the TV and film industries. However, they also point to a potential benefit: a stronger challenge to Netflix in the streaming market, as combining Paramount+ and HBO Max would create a more competitive force.
During the fight, David Ellison received crucial help from his father, lawyer Delrahim, and three important board members: Safra A. Catz from Oracle, Gerry Cardinale of RedBird Capital Partners, and Justin Hamill, who leads investments at Silver Lake.
As the decision neared, David Ellison worked to convince Warner board members who had previously favored Netflix to change their minds. When Paramount increased its offer, some of those board members started to prefer the Paramount deal instead.
On Tuesday, Warner announced that Paramount’s deal was promising.
On Thursday, Warner’s board decided that Paramount’s offer was better than Netflix’s, leading Netflix to withdraw from the deal.
According to Miller, Paramount took a comprehensive and well-rounded approach. They considered the financial implications, understood the relevant regulations both in the US and Europe, and had a plan to address every detail.
On Friday, Paramount shares rose 21% to $13.51.
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Netflix is reportedly interested in acquiring Warner Bros. and HBO, but Paramount Global is also making a competing offer, even taking steps to aggressively pursue the deal. Here’s a look at how things have unfolded so far.
Just three days after the December war room meeting, David Ellison’s situation dramatically changed, and he appeared on CNBC to discuss it.
David Ellison announced to CNBC that they were actively trying to sell the company, and that they intended to complete the goals they had begun pursuing.
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2026-02-28 04:02