Around Hollywood's last crown asset, the two tech giants in Silicon Valley are fiercely competing. Although Netflix, the king of streaming, has won the bidding war, the Ellison family behind the new Paramount is unwilling to give up easily and is determined to achieve its goal through malicious acquisition.

Who will ultimately be the winner of this Hollywood blockbuster merger and acquisition battle? I dare not assert yet. But what can be certain is that whoever ultimately swallows Time Warner Exploration will create an industry super giant. Moreover, it cannot be denied that the original order of traditional film studios has collapsed, and Silicon Valley capital and technology have fully taken over Hollywood, with streaming replacing theaters as the main battlefield.

1、 Albanian army counterattacks

Last Friday, Silicon Valley streaming giant Netflix announced its acquisition of Warner Bros. Exploration's film and television production, content, and streaming platform businesses for a total of $82.7 billion, including debt, at a price of $27.5 per share for cash and stock.

What does this mean? Netflix, the king of streaming media, has acquired Hollywood's heaviest IP asset. Casablanca, Citizen Kane, The Sopranos, Harry Potter, Game of Thrones, The War of Inheritance, DC Universe - these gem level film and television contents will all belong to Netflix in the future. In addition, there are 128 million global subscribers to streaming platform HBO Max, as well as the industry's top Warner Bros. film and television studios.

Netflix's co CEO Ted Sarandos made no secret of their merger ambitions in a statement: "By combining Warner Bros. 'incredible program and movie library with our culturally defining works such as Stranger Things and Squid Game, we will be able to better entertain the world

Netflix expects to complete this transaction in the third quarter of 2026, as Warner Bros. Exploration needs to first divest its Discovery Global business. In order to impress the other party's board of directors, Netflix also set a sky high penalty of up to $5.8 billion.

The development trajectory of Netflix has become a legend: they have grown from a traditional DVD mail lease company to a streaming giant with over 300 million global subscribers and $39 billion in revenue by 2024, and now they are going to become the owner of HBO. When Netflix first entered the original content market, its slogan was "become HBO". History is so full of drama.

Even more dramatically, in 2010, Jeff Bewkes, the then CEO of Time Warner, publicly mocked Netflix as the "Albanian army" (meaning a stray army from remote areas that no one knew about), questioning whether Netflix's streaming model could change Hollywood's film and television landscape. However, this mockery became the most famous "crow's beak" phrase in the industry.

At that time, Netflix's market value was only $6 billion and it had just transformed into a streaming platform. Because broadband was not yet widely available, it was difficult to guarantee high-definition film and television content experience. Moreover, Netflix only bought some expired film and television content copyrights, and it depends on the faces of Hollywood giants. Time Warner, on the other hand, is a film and television giant with a full industry chain of film, television, and music, and a market value of over 60 billion US dollars. Of course, it does not take Netflix seriously.

But just 15 years later, this' Albanian army 'overthrew the arrogant' Ottoman Empire ', and now Netflix's market value exceeds $420 billion, with over 300 million paying users worldwide and annual profits exceeding $10 billion. With their abundant wealth, they have consistently produced and conquered the "old-fashioned" judges who were once disdainful of streaming media, such as the Oscars, Golden Globe Awards, and Emmy Awards. They have won awards every year and have a soft hand. This year's content expenditure is as high as 18 billion US dollars.

In contrast, Warner Bros., which was spun off by its parent company AT&T, has suffered huge losses of over $10 billion annually in the past three years. The parent company owes tens of billions of dollars in debt due to previous sky high mergers and acquisitions, and has to spend billions of dollars in cash just to repay loans every year. It is simply unable to invest huge amounts of money to produce new content, and the annual production of cinemas has dropped to less than 10 units.

At the same time, Warner Bros. 'cable television business has also shown signs of collapse, with cable advertising revenue plummeting by 23% in the most recent quarter and losing important broadcasting rights consecutively. Under heavy pressure, Warner Bros. can only choose to sell off its most valuable film and streaming businesses. This is the background of this bidding war.

2、 The king of malicious acquisitions reappears in the market

Although Netflix had already hailed the victory, just one day later, the plot underwent a dramatic reversal. Another bidding giant was unwilling to accept the failure of the bid and decided to bypass Warner Bros. 'board of directors through a hostile takeover, forcibly taking food from Netflix.

Of course, not only Netflix is eyeing the Hollywood crown of Warner Bros., but also the largest cable operator in the United States, Comcast and Paramount SkyDance (hereinafter referred to as "New Paramount"), have participated in the bidding. Comcast Group had already acquired Universal Pictures, one of the "Big Six" Hollywood studios, over a decade ago and currently owns the streaming platform Peacock.

The strength of the new Paramount cannot be underestimated, as their behind the scenes owner is Larry Ellison, the founder of Oracle and one of the world's top five billionaires with a personal net worth of over $250 billion. The CEO of the new Paramount is David Ellison, the only son of Ellison.

At first, because this "Oracle Crown Prince" did not want to take over his father's tech empire, his super wealthy father invested in him to start the Hollywood film and television company SkyDance in his twenties. Over the past year, David Ellison has completed the stunning $28 billion acquisition of Paramount by SkyDance, becoming the new head of Paramount. Among them, the vast majority of transaction funds come from Ellison himself, who is the true owner of the new Paramount.

In fact, the acquisition offer of the new Paramount is higher than Netflix, at $30 per share in full cash and a breach of contract fee of up to $5 billion. And they plan to acquire all of Warner Bros. 'film and television assets, including CNN and TNT television networks. But Warner Bros. 'board ultimately decided to accept Netflix's cash and stock offer of $27.5 per share.

Bid higher but lose the bid? How can Ellison and his son bear this breath. According to US media reports, the Ellison family was very angry after losing the bid, believing that it was a manipulated internal bidding. Ellison and his son therefore decided to launch a "hostile takeover" war, directly launching a tender offer to Warner Bros. shareholders to pressure Warner Bros. 'board of directors and forcibly complete the acquisition.

It has to be mentioned that this was the most effective method used by the "king of hostile takeovers" Ellison at that time. More than twenty years ago, Oracle, like a fierce hungry wolf, swallowed up one competitor after another, such as PeopleSoft, Siebel, Sun, etc., through malicious acquisitions, and achieved Oracle's market dominance.

As part of the hostile takeover, New Paramount sent a strongly worded open letter to David Zaslav, CEO of Warner Bros. Exploration, accusing the other party's board of directors of "biased sales procedures that preset outcomes favorable to a single bidder. Obviously, they have abandoned the appearance and reality of fair trading procedures, abandoned their responsibility to shareholders, and embarked on a short-sighted and predetermined path, favoring a single bidder. ”

The letter implies that Warner Bros. executives may lean towards Netflix's plan due to personal interests. The allegations of the new Paramount are not unfounded: Warner Bros. CEO Zaslav and Netflix co CEO Sarados had close private contacts, and within 24 hours of Netflix submitting its offer, Warner Bros. accepted the lower offer. But the response from the Warner Bros. board of directors is simple: we have fully fulfilled our fiduciary obligations and will continue to do so.

After the announcement of the hostile takeover by New Paramount, Warner Bros. 'stock price immediately soared by 5% to 8%. This is exactly what Ellison and his son hope to see, as they plan to push the latter's shareholders to initiate a vote to dismiss board members. The new Paramount also contacted Warner Bros. to explore the top ten institutional shareholders who hold more than 40% of the shares, promising them to "double the dividends if the transaction is successfully completed",

The success probability of the new Paramount move is not small: institutional shareholders value immediate direct returns more, and it is a fact that their offer is higher than Netflix's, and Delaware company law allows shareholders to directly intervene in board decisions. Zaslav was already unpopular among shareholders, with only 60% of the vote at last year's shareholders' meeting.

If Ellison and his son successfully gain the support of Warner Bros. shareholders and initiate a power of attorney dispute, the latter's board of directors will have to reconsider the acquisition offer and accept the higher bidder. Netflix will either be forced to increase its bid again or face the embarrassment of "cooked duck flying away".

3、 Doubtful prospects for anti-monopoly review

During the Biden administration, hawkish regulatory agencies strongly opposed all giant mergers and acquisitions at sky high prices. This deal, which reshaped the Hollywood landscape, is unlikely to pass antitrust scrutiny. However, now it is the Trump administration that advocates relaxing regulations and benefiting large corporations, and giants have begun a new round of merger and acquisition wars.

However, this merger war will still bring concerns about anti-monopoly review, as the entity after the merger is really huge. According to the latest statistics from streaming data platform JustWatch, if Netflix swallows Warner Bros., the new entity will account for about one-third of the total streaming viewing time in the United States. This market share has reached a level that is enough to make regulatory agencies light a red light.

Moreover, the merged Netflix Warner Bros. will have over 430 million global subscribers, the most complete library of film and television content from classic to modern, and vertical integration capabilities from production to distribution. What is this concept? This means that Netflix will control the entire industry chain from content production to user viewing.

Analysts are also not optimistic about this. Citibank analyst Jason Bazinet said he originally believed that the streaming market would integrate between these three smaller platforms (HBO Max, Paramount+, and Peacock), rather than allowing industry giants to directly swallow up Warner Bros., their main competitor, with their own balance sheets.

Democratic California Attorney General Robert Bonta has made it clear that he opposes any deal involving Warner Bros.: "Further integration in the core markets of American economic life - whether financial, aviation, food, or broadcast entertainment - is not in the interest of the American economy, consumers, or competition

Equally noteworthy is the political direction. As is well known, Ellison and his son are allies of President Trump. The previous acquisition of Paramount by SkyDance was completed with President Trump's nod and approval. In order to complete the acquisition, New Paramount agreed to pay $16 million in compensation to settle the previous lawsuit between Trump and CBS television channels, and to allow the federal government to designate a monitor to oversee the fairness of media coverage.

If the Ellison family completes the acquisition of Warner Bros., in addition to merging the two veteran film sets and streaming platforms of Paramount and Warner Bros., it will also create a television giant that includes CNN, CBS, HBO, and TNT, directly controlling the news and public opinion of the American people. And this is clearly a major bargaining chip for the Ellison family to seek government approval.

4、 Tech giants divide Hollywood

Whether Netflix ultimately swallows Warner Bros. or New Paramount seizes its share through a hostile takeover, it will be the second largest merger in Hollywood history, second only to AT&T's stunning acquisition of Time Warner for $108.7 billion in 2018. Yes, it was still Warner Bros. that was sold this time.

AT&T's sky high acquisition deal ultimately proved to be a disaster. Telecom giant AT&T was proven to have no understanding of operating film and television products. Just four years later, they had to divest from Time Warner Media and merge with Discovery Channel, while reducing losses by $15 billion to $20 billion. After struggling for several years, Warner Bros. was put on the market for sale again.

The sale of Warner Bros. will also determine the final reshuffle of the streaming industry. In 2019, when the streaming war broke out, there were over a dozen major players in the market: Netflix, Disney+under Disney (integrating ESPN and Hulu), HBO Max under Warner Bros., Peacock under Comcast, Paramount+under Paramount, as well as Apple TV+and Amazon Prime Video, each claiming to challenge Netflix.

Six years later, the industry landscape has become clear, and the only truly competitive players in this market are Netflix, New Paramount, Disney, Amazon, and Apple. Behind each is a super giant with a market value of hundreds of billions or even trillions of dollars. In addition, although Apple+has a small streaming volume, it is still an unavoidable presence backed by the funding, platform, and user support of this super giant Apple.

It cannot be denied that century old Hollywood has been completely rewritten by Silicon Valley capital. This is not a simple corporate merger, but the end of an era. The voice of Hollywood has shifted from studios in Southern California to technology companies in Silicon Valley. Algorithms have replaced the intuition of producers, data analysis determines content production, and global distribution networks have crushed traditional cinemas.

The Hollywood "studio system" established in the 1920s - established by veteran film companies such as MGM, Paramount, Warner Bros., Fox, and Universal Pictures - once monopolized the global entertainment industry for nearly a century. But now, Hollywood has been divided among tech giants, and the studio system is falling apart.

In addition to Warner Bros. Exploration, which Netflix bid for, Universal Pictures sold to Comcast, 20th Century Fox sold to Disney, MGM sold to Amazon, and Paramount sold to the Ellison family. The only traditional film studio left is Columbia Pictures, a subsidiary of Sony.

Around Hollywood's last crown asset, the two tech giants in Silicon Valley are fiercely competing. Although Netflix, the king of streaming, has won the bidding war, the Ellison family behind the new Paramount is unwilling to give up easily and is determined to achieve its goal through malicious acquisition.

Who will ultimately be the winner of this Hollywood blockbuster merger and acquisition battle? I dare not assert yet. But what can be certain is that whoever ultimately swallows Time Warner Exploration will create an industry super giant. Moreover, it cannot be denied that the original order of traditional film studios has collapsed, and Silicon Valley capital and technology have fully taken over Hollywood, with streaming replacing theaters as the main battlefield.

1、 Albanian army counterattacks

Last Friday, Silicon Valley streaming giant Netflix announced its acquisition of Warner Bros. Exploration's film and television production, content, and streaming platform businesses for a total of $82.7 billion, including debt, at a price of $27.5 per share for cash and stock.

What does this mean? Netflix, the king of streaming media, has acquired Hollywood's heaviest IP asset. Casablanca, Citizen Kane, The Sopranos, Harry Potter, Game of Thrones, The War of Inheritance, DC Universe - these gem level film and television contents will all belong to Netflix in the future. In addition, there are 128 million global subscribers to streaming platform HBO Max, as well as the industry's top Warner Bros. film and television studios.

Netflix's co CEO Ted Sarandos made no secret of their merger ambitions in a statement: "By combining Warner Bros. 'incredible program and movie library with our culturally defining works such as Stranger Things and Squid Game, we will be able to better entertain the world

Netflix expects to complete this transaction in the third quarter of 2026, as Warner Bros. Exploration needs to first divest its Discovery Global business. In order to impress the other party's board of directors, Netflix also set a sky high penalty of up to $5.8 billion.

The development trajectory of Netflix has become a legend: they have grown from a traditional DVD mail lease company to a streaming giant with over 300 million global subscribers and $39 billion in revenue by 2024, and now they are going to become the owner of HBO. When Netflix first entered the original content market, its slogan was "become HBO". History is so full of drama.

Even more dramatically, in 2010, Jeff Bewkes, the then CEO of Time Warner, publicly mocked Netflix as the "Albanian army" (meaning a stray army from remote areas that no one knew about), questioning whether Netflix's streaming model could change Hollywood's film and television landscape. However, this mockery became the most famous "crow's beak" phrase in the industry.

At that time, Netflix's market value was only $6 billion and it had just transformed into a streaming platform. Because broadband was not yet widely available, it was difficult to guarantee high-definition film and television content experience. Moreover, Netflix only bought some expired film and television content copyrights, and it depends on the faces of Hollywood giants. Time Warner, on the other hand, is a film and television giant with a full industry chain of film, television, and music, and a market value of over 60 billion US dollars. Of course, it does not take Netflix seriously.

But just 15 years later, this' Albanian army 'overthrew the arrogant' Ottoman Empire ', and now Netflix's market value exceeds $420 billion, with over 300 million paying users worldwide and annual profits exceeding $10 billion. With their abundant wealth, they have consistently produced and conquered the "old-fashioned" judges who were once disdainful of streaming media, such as the Oscars, Golden Globe Awards, and Emmy Awards. They have won awards every year and have a soft hand. This year's content expenditure is as high as 18 billion US dollars.

In contrast, Warner Bros., which was spun off by its parent company AT&T, has suffered huge losses of over $10 billion annually in the past three years. The parent company owes tens of billions of dollars in debt due to previous sky high mergers and acquisitions, and has to spend billions of dollars in cash just to repay loans every year. It is simply unable to invest huge amounts of money to produce new content, and the annual production of cinemas has dropped to less than 10 units.

At the same time, Warner Bros. 'cable television business has also shown signs of collapse, with cable advertising revenue plummeting by 23% in the most recent quarter and losing important broadcasting rights consecutively. Under heavy pressure, Warner Bros. can only choose to sell off its most valuable film and streaming businesses. This is the background of this bidding war.

2、 The king of malicious acquisitions reappears in the market

Although Netflix had already hailed the victory, just one day later, the plot underwent a dramatic reversal. Another bidding giant was unwilling to accept the failure of the bid and decided to bypass Warner Bros. 'board of directors through a hostile takeover, forcibly taking food from Netflix.

Of course, not only Netflix is eyeing the Hollywood crown of Warner Bros., but also the largest cable operator in the United States, Comcast and Paramount SkyDance (hereinafter referred to as "New Paramount"), have participated in the bidding. Comcast Group had already acquired Universal Pictures, one of the "Big Six" Hollywood studios, over a decade ago and currently owns the streaming platform Peacock.

The strength of the new Paramount cannot be underestimated, as their behind the scenes owner is Larry Ellison, the founder of Oracle and one of the world's top five billionaires with a personal net worth of over $250 billion. The CEO of the new Paramount is David Ellison, the only son of Ellison.

At first, because this "Oracle Crown Prince" did not want to take over his father's tech empire, his super wealthy father invested in him to start the Hollywood film and television company SkyDance in his twenties. Over the past year, David Ellison has completed the stunning $28 billion acquisition of Paramount by SkyDance, becoming the new head of Paramount. Among them, the vast majority of transaction funds come from Ellison himself, who is the true owner of the new Paramount.

In fact, the acquisition offer of the new Paramount is higher than Netflix, at $30 per share in full cash and a breach of contract fee of up to $5 billion. And they plan to acquire all of Warner Bros. 'film and television assets, including CNN and TNT television networks. But Warner Bros. 'board ultimately decided to accept Netflix's cash and stock offer of $27.5 per share.

Bid higher but lose the bid? How can Ellison and his son bear this breath. According to US media reports, the Ellison family was very angry after losing the bid, believing that it was a manipulated internal bidding. Ellison and his son therefore decided to launch a "hostile takeover" war, directly launching a tender offer to Warner Bros. shareholders to pressure Warner Bros. 'board of directors and forcibly complete the acquisition.

It has to be mentioned that this was the most effective method used by the "king of hostile takeovers" Ellison at that time. More than twenty years ago, Oracle, like a fierce hungry wolf, swallowed up one competitor after another, such as PeopleSoft, Siebel, Sun, etc., through malicious acquisitions, and achieved Oracle's market dominance.

As part of the hostile takeover, New Paramount sent a strongly worded open letter to David Zaslav, CEO of Warner Bros. Exploration, accusing the other party's board of directors of "biased sales procedures that preset outcomes favorable to a single bidder. Obviously, they have abandoned the appearance and reality of fair trading procedures, abandoned their responsibility to shareholders, and embarked on a short-sighted and predetermined path, favoring a single bidder. ”

The letter implies that Warner Bros. executives may lean towards Netflix's plan due to personal interests. The allegations of the new Paramount are not unfounded: Warner Bros. CEO Zaslav and Netflix co CEO Sarados had close private contacts, and within 24 hours of Netflix submitting its offer, Warner Bros. accepted the lower offer. But the response from the Warner Bros. board of directors is simple: we have fully fulfilled our fiduciary obligations and will continue to do so.

After the announcement of the hostile takeover by New Paramount, Warner Bros. 'stock price immediately soared by 5% to 8%. This is exactly what Ellison and his son hope to see, as they plan to push the latter's shareholders to initiate a vote to dismiss board members. The new Paramount also contacted Warner Bros. to explore the top ten institutional shareholders who hold more than 40% of the shares, promising them to "double the dividends if the transaction is successfully completed",

The success probability of the new Paramount move is not small: institutional shareholders value immediate direct returns more, and it is a fact that their offer is higher than Netflix's, and Delaware company law allows shareholders to directly intervene in board decisions. Zaslav was already unpopular among shareholders, with only 60% of the vote at last year's shareholders' meeting.

If Ellison and his son successfully gain the support of Warner Bros. shareholders and initiate a power of attorney dispute, the latter's board of directors will have to reconsider the acquisition offer and accept the higher bidder. Netflix will either be forced to increase its bid again or face the embarrassment of "cooked duck flying away".

3、 Doubtful prospects for anti-monopoly review

During the Biden administration, hawkish regulatory agencies strongly opposed all giant mergers and acquisitions at sky high prices. This deal, which reshaped the Hollywood landscape, is unlikely to pass antitrust scrutiny. However, now it is the Trump administration that advocates relaxing regulations and benefiting large corporations, and giants have begun a new round of merger and acquisition wars.

However, this merger war will still bring concerns about anti-monopoly review, as the entity after the merger is really huge. According to the latest statistics from streaming data platform JustWatch, if Netflix swallows Warner Bros., the new entity will account for about one-third of the total streaming viewing time in the United States. This market share has reached a level that is enough to make regulatory agencies light a red light.

Moreover, the merged Netflix Warner Bros. will have over 430 million global subscribers, the most complete library of film and television content from classic to modern, and vertical integration capabilities from production to distribution. What is this concept? This means that Netflix will control the entire industry chain from content production to user viewing.

Analysts are also not optimistic about this. Citibank analyst Jason Bazinet said he originally believed that the streaming market would integrate between these three smaller platforms (HBO Max, Paramount+, and Peacock), rather than allowing industry giants to directly swallow up Warner Bros., their main competitor, with their own balance sheets.

Democratic California Attorney General Robert Bonta has made it clear that he opposes any deal involving Warner Bros.: "Further integration in the core markets of American economic life - whether financial, aviation, food, or broadcast entertainment - is not in the interest of the American economy, consumers, or competition

Equally noteworthy is the political direction. As is well known, Ellison and his son are allies of President Trump. The previous acquisition of Paramount by SkyDance was completed with President Trump's nod and approval. In order to complete the acquisition, New Paramount agreed to pay $16 million in compensation to settle the previous lawsuit between Trump and CBS television channels, and to allow the federal government to designate a monitor to oversee the fairness of media coverage.

If the Ellison family completes the acquisition of Warner Bros., in addition to merging the two veteran film sets and streaming platforms of Paramount and Warner Bros., it will also create a television giant that includes CNN, CBS, HBO, and TNT, directly controlling the news and public opinion of the American people. And this is clearly a major bargaining chip for the Ellison family to seek government approval.

4、 Tech giants divide Hollywood

Whether Netflix ultimately swallows Warner Bros. or New Paramount seizes its share through a hostile takeover, it will be the second largest merger in Hollywood history, second only to AT&T's stunning acquisition of Time Warner for $108.7 billion in 2018. Yes, it was still Warner Bros. that was sold this time.

AT&T's sky high acquisition deal ultimately proved to be a disaster. Telecom giant AT&T was proven to have no understanding of operating film and television products. Just four years later, they had to divest from Time Warner Media and merge with Discovery Channel, while reducing losses by $15 billion to $20 billion. After struggling for several years, Warner Bros. was put on the market for sale again.

The sale of Warner Bros. will also determine the final reshuffle of the streaming industry. In 2019, when the streaming war broke out, there were over a dozen major players in the market: Netflix, Disney+under Disney (integrating ESPN and Hulu), HBO Max under Warner Bros., Peacock under Comcast, Paramount+under Paramount, as well as Apple TV+and Amazon Prime Video, each claiming to challenge Netflix.

Six years later, the industry landscape has become clear, and the only truly competitive players in this market are Netflix, New Paramount, Disney, Amazon, and Apple. Behind each is a super giant with a market value of hundreds of billions or even trillions of dollars. In addition, although Apple+has a small streaming volume, it is still an unavoidable presence backed by the funding, platform, and user support of this super giant Apple.

It cannot be denied that century old Hollywood has been completely rewritten by Silicon Valley capital. This is not a simple corporate merger, but the end of an era. The voice of Hollywood has shifted from studios in Southern California to technology companies in Silicon Valley. Algorithms have replaced the intuition of producers, data analysis determines content production, and global distribution networks have crushed traditional cinemas.

The Hollywood "studio system" established in the 1920s - established by veteran film companies such as MGM, Paramount, Warner Bros., Fox, and Universal Pictures - once monopolized the global entertainment industry for nearly a century. But now, Hollywood has been divided among tech giants, and the studio system is falling apart.

In addition to Warner Bros. Exploration, which Netflix bid for, Universal Pictures sold to Comcast, 20th Century Fox sold to Disney, MGM sold to Amazon, and Paramount sold to the Ellison family. The only traditional film studio left is Columbia Pictures, a subsidiary of Sony.