Bold moves are reshaping Hollywood’s landscape as David Ellison’s plans to acquire Warner Bros start to take serious form, yet David Zaslav’s future role remains uncertain. But here’s where it gets controversial: despite Warner Bros Discovery (WBD) reaching new heights, the incoming Ellison deal could push Zaslav out, raising questions about leadership and control in one of the industry’s biggest studios.
Recently, Warner Bros locked in new contracts for top executives Michael De Luca and Pam Abdy, key figures leading the studio's motion picture division. Coming off a spectacular $4 billion global box office haul this year, they are considered invaluable assets — much like discovering a rare Warhol painting in your new home. This solid foundation makes Warner Bros even more attractive to David Ellison and Paramount, spotlighting a treasure trove that Zaslav’s team seems less connected to.
While there is no official offer on the table yet, insiders close to both studios reveal that Ellison, advised by Jeff Shell and financier Gerry Cardinale, is patiently preparing to bid for Warner Bros — an iconic entertainment powerhouse with global influence. However, these talks remain informal; the extent of negotiations hasn’t fully surfaced.
David Ellison and his father, Larry Ellison — one of the wealthiest individuals worldwide — are cautious. They want to avoid the drawn-out and complex $8 billion Skydance acquisition of Paramount, which involved many pitfalls. They’re especially wary of potential financial surprises linked to WBD’s considerable debt burden. Interestingly, they do not envision a significant leadership role for David Zaslav after the acquisition finalizes.
Sources indicate that Zaslav himself might prefer to exit once the deal closes. Larry Ellison, representing the tech titan side, prefers starting fresh with a clean slate devoid of unexpected complications. The most Zaslav might be offered at this stage is a non-operational role such as a seat on the board or a strategic advisory position, far from the helm he currently occupies.
When asked, representatives for both Paramount and Warner Bros Discovery declined to comment on the deal or any speculation.
Rumors suggest that Zaslav, enjoying his current leadership role, sought a prominent “grand poobah” position in the future merged studio — a move that partly explains his attempts to attract other bidders beyond Paramount, including Netflix. But here’s the catch: analyst Richard Greenfield from Lightshed Partners questions Netflix’s interest in such a takeover. He argues the streaming giant wouldn’t pay anywhere near the $75-$100 billion that acquiring WBD might cost, given the company's market cap sits around $47 billion with an additional $30 billion in net debt.
Netflix’s business model focuses heavily on original content, thriving with licensed material from Hollywood studios without needing to own the legacy cable networks tied to Warner Bros. HBO Max, still intertwined with a complex web of traditional cable and distribution deals spanning Amazon Prime, Charter, and DirecTV, doesn’t align well with Netflix’s streamlined approach. So why would Netflix want to inherit these entanglements?
Warner Bros Discovery is on the cusp of splitting its linear networks from film and TV production. This situation could either drive up bidding prices or create a unique opportunity: the Ellisons might acquire the entire company in cash before the split, potentially securing it at a lower price — cable networks and all. However, options remain limited. Comcast might encounter regulatory challenges, Sony could jump in with private equity partners, and tech giants like Apple or Amazon remain uncertain contenders.
Larry Ellison’s recent reign as the world’s wealthiest individual might be an intimidating factor for other prospective buyers, adding another layer of complexity to the bidding process.
The motivations behind PSKY’s push seem to mix business ambitions with political undercurrents. TD Cowen analyst Doug Creutz suggested that usual financial analysis may not fully capture the dynamics here. The odds of the Ellisons making a successful bid appear high, partly due to the volatile geopolitical climate and the explosive growth in AI investments. Larry Ellison is already positioned as a major player in social media realms, notably TikTok, signaling deeper strategic interests beyond traditional entertainment.
That said, WBD’s stock price presents risks. The mere buzz around a potential bid has nearly doubled shares, but analysts warn prices could drop sharply if the bid fails to materialize, creating a risky environment for investors.
Adding a bit of Hollywood flair to all this drama, David Ellison is scheduled to appear at a Bloomberg conference in Hollywood, sharing the stage shortly before Warner Bros motion picture chairs Michael De Luca and Pam Abdy — could this be a sign of private conversations brewing behind the scenes?
So, what do you think? Is David Zaslav’s diminishing role a necessary part of progress, or is it a loss for Warner Bros Discovery? Could the Ellisons’ vision successfully navigate the complex media landscape, or are they risking overreach with this ambitious acquisition? Share your thoughts and let the debate begin.
