Paramount and Netflix battle for Warner Bros., Hollywood is in panic

Disasters, catastrophes and nightmares. That’s how Hollywood creatives describe the decline of once-mighty Warner Bros., as Netflix and Paramount vie for the venerable studio and tinsel towns face more unrest and job losses.

Warner’s decline and impending sale – whether of the entire Paramount Skydance or the spun-off Netflix – has sparked mourning in Hollywood, where a historic decline in production has devastated the entertainment industry. The loss for the studio, which has made iconic films such as “Casablanca,” “Goodfellas,” “Batman” and “Harry Potter,” could mean more layoffs and fewer buyers for film and television projects.

BBC interviews with dozens of actors, producers and crew reveal an industry trying to weigh two evils: the control of a tech giant accused of killing movie theaters (Netflix), or the control of a billionaire deemed too close to President Trump (Paramount).

“David Ellison is a right-wing billionaire Trump,” one camera assistant said of the Paramount Skydance CEO. Ellison is the son of billionaire Oracle co-founder and close Trump ally Larry Ellison. “Historically, Netflix has preferred not to micromanage productions.”

If Netflix gets the deal they want, they would acquire Warner Bros.’s crown jewel — 102-year-old studio HBO and its vast archive of movies and TV shows — leaving Warner Bros.’ legacy TV networks like CNN, TNT Sports and Discovery Channel to another buyer.

Meanwhile, Paramount Skydance’s $108bn (£81bn) hostile takeover The bid for Warner Bros. includes support from Saudi Arabia, Abu Dhabi, Qatar and a fund launched by Jared Kushner, son-in-law of U.S. President Donald Trump.

It has raised concerns about censorship and the potential for government overreach.

President Trump added fuel to the fire by saying “CNN must be sold.”

The Warner Bros. deal is the latest in a series of major shakeups in Hollywood since the pandemic.

Film and TV production will come to a standstill in 2023 due to simultaneous strikes by actors and writers. It seems like everyone in Hollywood is working in 2022, as studios and streaming services go into creative overdrive in the wake of the coronavirus shutdown. But when the labor strike ended, the production boom never returned.

The fallout means many media companies have had to close their doors – or merge. David Ellison’s Skydance Media acquires ParamountEarlier this summer, another storied Hollywood studio put thousands out of work.

When Warner Bros. put up a for-sale sign, Paramount launched an eager acquisition campaign. But the studio eventually announced a deal with Netflix. The rejected Paramount then made a hostile takeover bid directly to Warner Bros. Discovery shareholders, which they said was “superior” to the Netflix deal.

Whether they support Paramount, Netflix or other potential buyers, one thing people in Hollywood seem to agree on is the villain of the story – Warner Bros. Discovery CEO David Zaslav, who made $51.9 million last year while Warner Bros. lost more than $11 billion and the company’s stock price fell nearly 7%.

“Ever since David Zaslav became CEO, I’ve watched Warner Bros. go into trouble and completely destroy it,” said one actor who lost his home as work dried up. He spoke on condition of anonymity because he still hopes to work for Netflix and Paramount.

More than one person has compared Mr. Zaslav to Gordon Gekko, the fictional movie character in the 1987 film “Wall Street,” who declared that “greed is a good thing.”

Mr. Zaslav took over in 2022 from another massive merger between Discovery, Inc., which he runs, and AT&T’s WarnerMedia, creating Warner Bros Discovery. Thousands of jobs were eliminated as a result of the consolidation, but Zaslav’s salary package was generous.

“Zaslav was Gordon Gekko — he came in, wrecked it, and sold it all,” said a producer who worked on the Warner Bros. lot. “He said I’m going to make all the shareholders rich, who cares what the history of this place is.”

Warner Bros. objected to that characterization.

Robert Gibbs, head of communications at WarnerMedia, said in a statement to the BBC: “Over the past three and a half years, under the leadership of David and the talented team at WBD, the studio has regained its leadership position with a unique series of films led by original content, relaunched the DC Universe under a unified leadership team’s ten-year plan, and the streaming service has launched globally and achieved profitability for the first time.”

For many film workers, whoever acquires Warner Bros. feels almost irrelevant. Instead, they have been focused on how to reinvent themselves as the industry shrinks due to consolidation and artificial intelligence is increasingly used in entertainment.

“Every morning, no matter how much I tell myself to stay positive, I wake up feeling like I’m failing in every way,” one actor said. He is now homeless with his wife and two children, working odd jobs through the kindness of friends and food banks. He asked not to be named for fear it could affect future work.

“I would rather see Netflix acquire Warner Bros. than foreign money,” he said.

Others are less sure. The tech giant has been arguably the industry’s biggest disruptor since Warner Bros. pioneered “talkies” in 1927.

“I think it’s a disaster,” said one exhibitor who spoke on condition of anonymity because they work with Netflix. “This is a company openly and proudly saying it no longer needs theaters. It’s horrific. It’s a nightmare.”

Due to Netflix’s streaming-first policy, many theaters in the United States refuse to show Netflix movies.

“At least at Paramount, we know movies are going to make it to the big screen. They’re not killing movie theaters,” said one producer who has worked for all three companies.

Netflix sought to allay these concerns, saying they wanted to “maintain Warner Bros.’ current operations and build on its strengths, including the theatrical distribution of its films.”

Many people in Hollywood want to believe them.

John Evans, a sound technician who has dabbled in acting, writing and producing, pointed to Netflix’s meticulous restoration of the Egyptian Theater along the iconic Hollywood Boulevard as a sign of their good faith.

The Egyptian Theatre, a classic theater built in 1922 that was the premiere venue for the world’s first film, “Robin Hood” starring Douglas Fairbanks, fell into disrepair before Netflix bought the theater in 2020 and spent $70 million to renovate it.

“I think that’s a good sign,” Mr. Evans said, adding that streaming is how many filmmakers consume movies and television like the rest of the world.

On the Warner Bros. backlot, tourists took selfies in front of the Central Perk cafe from “Friends” and walked around the facades of buildings that represented New York or Los Angeles. In offices and writers’ rooms, for those still working, it’s business as usual.

“I’ve been through seven mergers,” said one producer who worked at Warner Bros. Studios while developing a new show, explaining that losing a studio is sad because it means one less client and it’s harder to make and sell shows. “But if you make good stuff, you’ll make good stuff.”

The producer spoke on condition of anonymity on the day Paramount Skydance announced its hostile takeover bid. They say they’re too busy to worry about a sale as they work to get the show on the air — and they wouldn’t be surprised if another billionaire or trillionaire makes another offer for the studio when this is all over.

“I joke that Elon walked in and did this, but he could,” they said of Tesla and X owners. “When you have someone worth a trillion dollars, there are no rules.”