Depending on who and when you speak to someone over the next few days, there is either a “the sky is falling” or “let’s wait this out” reaction to the news of Netflix’s pending acquisition of Warner Bros. and HBO Max. And, to clarify, beyond securing the historic Warner Bros. lot, that is the bulk of Netflix’s deal. The other Warner Bros. Discovery assets, including CNN, TBS, TNT, and the Discovery brands, will form a separate, standalone company in the third quarter of 2026. Whatever your take on the merger, which set off message threads across Los Angeles last night, it’s a massive earthquake for the entertainment business. Things will truly never be the same again.
Netflix beat out Paramount and Comcast in a bidding war that has the former sending out feelers in the media that the Ellison clan may attempt a hostile takeover (get ready for a counter-lawuit if you try it) and a back to the drawing board on how to grow Peacock for he latter. The deal has spawned hundreds of questions, many of which won’t be answered for months. At a town hall this morning, Warner Bros Discovery CEO and President David Zaslav even admitted to employees that the 12-18 month regulatory process will be bumpy, suggesting they “put your seatbelts on.”
Keeping that in mind, here are some questions moving forward that you may or may not have thought of yet. And some potentially more positive answers than you expected.
Will Netflix opt for a 45 or 30-day theatrical window for Warner Bros?
This morning, Netflix co-CEO Ted Sarandos told analysts he is committed to theatrical distribution for Warner Bros. Pictures. What that release window will entail is still unclear. In theory, the easiest road would be to duplicate Universal’s strategy. If a movie makes over $50 million, it will guarantee a 45-day window in theaters. If a movie makes less, the studio can opt for a 17-day window, depending on its performance and with its budget taken into account, etc. In theory, the $50 million figure is an incentive for exhibitors to partner with the studio for in-theater marketing and promotional events to drive ticket sales. The difference would be that, unlike Universal, which traditionally sends its films to the VOD marketplace after that window, Netflix would likely skip that step and go directly to the streamer. If it’s available for “free” on Netflix, theaters may not want to keep it on their screens for much longer. Additionally, there are a lot of variables at play here. For the first few years of the merger, most film talent and production deals for WB Films have been set up as theatrical contracts vs. streaming agreements. Overall revenue matters, especially for big names, and skipping a part of the process could get very, very messy (anyone remember Scarlett Johansson and the “Black Widow” fiasco?). Moreover, if Netflix opts for a shorter 17 or 30-day window overall, the blowback from distributors, talent, and regulators could be enormous. Also, stars and big-name directors and producers expect massive marketing campaigns to drive films in theaters. Netflix does these campaigns to drive viewers to watch said films on the streamer with token “In theaters” messaging when applicable. Will they play that game with WB films?
How will Netflix reassure unions, regulators, Congress, and the industry at large that it will not abandon theatrical?
In the weeks and months ahead, Netflix could formalize its commitment to theaters and a set theatrical window plan. But will unions, Congress, regulatory bodies (as well as overseas regulators) believe them? It’s one thing to make that commitment at a Congressional hearing (oh, just you wait), but what can the streamer do either contractually or legally to assure them of their intentions for Warner Bros. specifically? Will Netflix instruct the studio to make long-term deals with filmmakers and/or exhibitors to lock these terms up before the merger closes? Does it use Greta Gerwig’s “The Chronicles of Narnia” as an example of a “real theatrical” release (currently just set for IMAX screens) next fall? Or does it find another Netflix title to release this spring or summer in a traditional manner as an act of good faith? Again, talent contracts for streaming vs. theatrical films are not the same, but if there’s a will, there could be a way.
Do Hollywood’s unions have a bigger say in this than people think?
The Teamsters and the WGA have come out vehemently against the deal over major concerns regarding media consolidation, in general. The PGA and the DGA, now presided by Christopher Nolan, no less, who left his one-time home at WB for Universal over theatrical distribution issues during the pandemic, have voiced either strong opposition or genuine concern over this merger. The only union that struck a middle ground was the Screen Actors Guild, which noted, “Any decision about SAG-AFTRA’s position on this transaction will be made with the best interests of SAG-AFTRA members as the standard and following a complete and thorough analysis of the details of the deal, with particular focus on jobs and production commitments.” That’s not surprising, primarily because over the past decade, Netflix has arguably hired more actors than any other media company. First and foremost, each union cares about jobs. The content spend either needs to be comparable to the level of what the two companies are at now combined. Can Netflix reassure them? And if not, are they a bigger river to cross than Congress or the FTC? Ponder, pt. 1.
Will Pam Abdy and Michael De Luca say at Warner Bros. Pictures, and, if so, who will they report to?
The current CEOs of Warner Bros. Entertainment, Pam Abdy and Michael De Luca, who already endured an Amazon takeover of MGM Studios less than four years ago, are now once again in leadership limbo. After giving WB a massive $4 billion worldwide creative comeback with “Sinners” and “One Battle After Another,” expected to dominate the Oscars, would Sarandos have the pair report to the man who almost had their gig, Dan Lin, the head of Netflix Film? With WB theatrical rolling, would Netflix Chief Content Officer Bela Bajaria and Sarandos entice them to stay with some sort of autonomy? That’s not really the Netflix way, but neither were ads, live events, or sports. It should be noted that the duo saw their contracts renewed in October, likely for another three years till the end of 2028. If Netflix does decide to jettison them, they’ll have a fine payout.
Is it possible that the layoffs won’t be that bad?
Here’s the big difference between Netflix, Comcast, and Paramount as acquirers of Warner Bros. Discovery – jobs. If Comcast or Paramount had landed all of WBD, the overlap would have been tremendous. Thousands and thousands of jobs would have been lost not only in Los Angeles but around the globe. A reminder, WBD currently has 25,000 employees worldwide. The overlap between WBD and those two media companies is massive. Layoffs are still looming, even if Zaslov tried to reassure employees at today’s town hall that “most” of the Warner Bros. and HBO Max employees would survive the merger. And that’s the kicker, the employees of the new spinoff company, including the aforementioned CNN, TNT, Discovery networks, etc. are likely as safe as anyone can be in this economy. Plus, the duplication from Netflix to Warner Bros. Pictures, Warner Bros. Television, and HBO is significantly less than the other potential buyers. Netflix does not have an international theatrical distribution division. Netflix does not have a domestic theatrical marketing division (it may have current employees with previous experience, but they are not working in that manner in-house). It does not have employees who deal with partners on television productions or licensing (more on that in a minute). It does not have employees who deal with cable companies on a day-to-day basis. No, Netflix did not get into something completely different from its core business, such as CNN, but it is now involved in a slew of contractual divisions that are “new” to its corporate overlords. Could Netflix phase these divisions out? Sure, but we’re talking many, many years from now.
How long will Warner Bros. Television exist?
Fun fact: Netflix really doesn’t have its own internal production. I mean, it sort of does, but nothing comparable to Walt Disney, Universal, Sony Pictures, Paramount, or, surprise, Warner Bros. Television. And, surprise, WBTV is one of the largest content producers in Hollywood producing a ton of shows for other networks and streamers, including Apple’s “Ted Lasso” and “Pressumed Innocent,” NBC’s “Brilliant Minds,” ABC’s “Abbott Elementary” (a co-production with ABC), CBS’s “Georgie & Mandy’s First Marriage,” Or its syndicated division that makes “The Jennifer Hudson Show,” “This Old House,” or “Extra.” Or their reality division that produces “The Voice,” “The Bachelor” franchises, or “The Real Housewives of Salt Lake City” and “The Real Housewives of New York”? Oh, and how about their busy divisions in Australia, the U.K., and Spain? And the hundreds of other programs in development or about to begin production on non-Netflix competitors. Sure, WBTV makes shows for Netflix such as “Running Point,” “Leanne,” and “Untamed,” too. But this isn’t an aspect of Warner Bros you can just fold up and drop all these long-term deals with other streamers or networks (and if it’s profitable, why would you?). I mean, eventually, but, again, years from now...
How long will HBO remain a cable offering?
There is another business Netflix isn’t in. The cable business. Do you know what is still a mainstay of American cable networks? HBO. WBD stopped reporting the “cable only” subscriber number for HBO a few years ago, but it’s likely still over 20 million in the U.S. alone. At an average monthly price of $16-18, that’s almost $4 billion in revenue a year for HBO and cable networks a year. If any industry would be decimated by HBO leaving cable sooner rather than later, it would be cable operators Comcast, Charter, and Cox Communications, among others. Netflix earned $39 billion in revenue in 2024. A chunk of that $4 billion would be a substantial addition to that yearly total. Would they really give it up that quickly? We’re not so sure.
Will Casey Bloys continue to run HBO, and would he report to anyone but Bella Bajaria?
Bloys has been the head of HBO programming since 2016. He has been the CEO and Chairman of HBO Max since 2022. He has been a part of the HBO culture for over 20 years and is the reason why shows such as “The White Lotus,” “Succession,” “The Last of Us,” “Euphoria,” “Veep,” and “Barry” were greenlit. He is the corporate and media face of HBO. Would he report to anyone at Netflix other than Bajaria? Would she, Sarandos, and the streamer’s other CEO, Greg Peters, allow Bloys and his team to have their own little fiefdom and work autonomously? Similar to John Landgraf and FX at Disney? If not, is Bloys destined to drive up Barham Blvd. to join Donna Langley and NBCUniversal to boost Peacock’s narrative output? Ponder, pt. 2.
