Late Thursday night at around 10.30p.m. in London at the world premiere afterparty for Warner Bros.’ all-star gothic romance “The Bride!,” phones suddenly began pinging simultaneously around the room.
The news had broken: Netflix had pulled out of the deal to acquire Warner Bros. Discovery, leaving Paramount Skydance poised to claim victory.
Alongside the stars, including the likes of writer/director Maggie Gyllenhaal, plus Jessie Buckley, Christian Bale and Jake Gyllenhaal, a decent crop of Warner Bros. Pictures execs — led by co-CEO Pam Abdy — were also in attendance.
Guests noted a palpable sense of relief — a feeling that Hollywood’s most intensely fought contest in years was finally over.
But while the noise at the party for “The Bride!” may have been borne out of exhaustion following months of fierce back-and-forths between the teams of David Ellison, Ted Sarandos and David Zaslav, the news of Paramount’s WBD acquisition (which, as California’s attorney general noted, is still far from being a “done deal”) has sparked both optimism and concern from across the international cinema community.
But it’s a different concern than in the U.S., where there are fears over the rapidly consolidated media power of the Ellison family and their connections to Donald Trump. Outside the U.S., the issue isn’t political power, it’s more about bargaining power.
“Paramount has been very supportive of windows, so for exhibition, it’s a positive,” says Clare Binns, the hugely respected British cinema veteran working at theater chain Picturehouse who on Sunday was awarded a BAFTA for her services to the industry. “But my main concern is the amount of films and the kind of films that are going to be made. The Warner Bros. slate over the last 12 months has been outstanding — all brilliant, original, bold films. I am very concerned about the merger and what it’s going to look like for the kind of films we’re going to see being made.”
For Tim Richards, CEO of cinema giant Vue who has been outspoken in his support for the Paramount deal, the result is certainly the most preferable of the two options.
“It’s the best outcome for the industry,” he says. “You have a highly respected filmmaker in David Ellison, with a strong track record in theatrical releases, and I would rather have someone who has been releasing films theatrically successfully for 15 years running Warner Brothers than somebody who hasn’t.”
Over in Germany, leading producer Martin Moszkowicz (whose credits include the “Resident Evil” franchise), asserted that further U.S. consolidation may not change the local market “overnight,” but says “fewer global decision-makers ultimately mean fewer buyers.” And for producer such as himself, this “usually translates into tougher negotiations and more centralized greenlight processes.”
But the Paramount deal “tilts more strongly toward a theatrical strategy — and that matters in Germany,” he says. “Warner Bros. has a very capable and successful local distribution team in place and a strong commitment to local language production, whereas Paramount’s footprint on the ground is far more limited.”
Laura Houlgatte, CEO of Europe’s International Union of Cinemas (UNIC) that represents indie exhibitors, struck a more cautious note.
“Our concerns remain,” she says. “We will continue to engage as discussions progress, stressing the importance of maintaining a strong and diverse theatrical slate, meaningful exclusivity periods, and appropriate marketing support.” “Our priority is to protect the long-term health of our members and ensure that robust safeguards are in place so that European cinemas can continue to thrive,” she added, noting that “This can only be achieved if any agreement is subject to the highest level of scrutiny by the relevant competition authorities, with legally binding commitments.”
According to Francois Godard at research firm Enders Analysis, Paramount Skydance’s likely victory is actually not necessarily the best outcome for European theater owners.
“Netflix was being very careful with the theatrical business and had made assurances about the theatrical window,” he says, referring to Ted Sarandos’ promise that Netflix would keep a 45-day window for theatrical runs of Warner Bros. movies. By contrast, “Paramount’s ownership of Warner Bros. means concentration on the distribution side,” Godard noted, meaning that as distributors the combined Paramount and W.B. entity “will have more leverage in negotiating with cinema owners.”
On the EU regulatory front, Sarandos, speaking to the BBC in London last week, said that the fact that there are sovereign funds from Saudi Arabia, United Arab Emirates and Qatar backing Paramount’s bid is a “bad idea” that could run into a regulatory hurdle.
Could the Arab funds’ ties to Paramount and Warner Bros. be problematic in Europe?
“It could be in the U.K.,” says Godard, noting that there is a recent precedent in which the U.K. regulator blocked a deal for RedBird Capital Partners — backed by Abu Dhabi-based International Media Investments (IMI) to buy the Telegraph Media Group.
And they could also be a problem for the European regulator, he adds. However at a European Union level this potential hurdle “would be weighted in the balance of the broader trade relationship between the European Union and the United States,” Godard goes on to point out. “And we have seen last summer that the European Union is ready to make concessions to avoid a trade war.”
Further afield, Southeast Asian distributors are cautiously optimistic about what the WBD-Paramount Skydance deal means for their markets. “For our region, this likely means Hollywood studios will place renewed emphasis on theatrical performance and strong local distribution partnerships before moving titles into streaming ecosystems,” says Phong Duong, business director of Vietnam-based distributor Mockingbird Pictures. “That’s positive for markets like Vietnam, Indonesia and Thailand, where box office remains culturally and commercially important.”
Duong adds that the shift “may rebalance power back toward studio-driven release strategies — giving Southeast Asian distributors more room to negotiate and build value at the theatrical level rather than being bypassed by global streaming pipelines.”
“The probably gives WBD relatively more clarity to continue growing their streaming service HBO Max deeply direct-to-consumer and with partners in Japan, Australia-New Zealand and greater Southeast Asia,” says Vivek Couto, CEO and executive director of research firm Media Partners Asia. “At the same time, strategic licensing and related partnerships can be continued with players in South Korea, India and Japan.”
Meanwhile, Indian filmmaker Anurag Kashyap, whose own work has migrated to streaming platforms, is more succinct about the broader implications: “Am all for theaters even though my films release on streaming now. This acquisition gives hope to ‘cinema in cinemas.’”
However the regulatory review of the WBD-Paramount Skydance pact plays out, there’s also hope, despite having failed in its bid for the studio, Netflix’s assessment of Warner Bros. and the pledges it made in terms of putting films in cinemas might impact its decisions moving forward.
“I’m hopeful that, having seen the success of theatrical releases from Warner Brothers, Netflix will now look at their own pipeline of movies coming up, and hopefully we will have an opportunity of releasing some of those movies theatrically, maybe as a statement of good faith,” says Vue’s Richards.
Elsa Keslassy contributed to this piece