If anyone thought theater owners would lay down their arms and stop fighting if Netflix didn’t prevail in its $82.7 billion bid to buy Warner Bros., think again. Just as concerning, if not more so, is the danger of what happens if David Ellison succeeds in owning two Hollywood legacy studios and merges Paramount with Warner Bros.
That’s why no one at Cinema United, the leading trade org for exhibitors, was hardly jumping for joy on Thursday when, in a stunning turn of events, Netflix walked away from its megadeal after the Warner Bros. Discovery Board opened the window just enough for Ellison’s Paramount to climb back in and sweeten its bid to buy all of WBD.
While exhibitors didn’t necessarily trust Netflix co-CEO Ted Sarandos when he pledged to give Warner Bros. movies a 45-day exclusive run in theaters — from day one at Netflix, he’s refused to abide by theatrical windows — they find it hard to fathom that Warners and Paramount will be able to release a combined 30 films a year. Further, they believe the merger would vest one studio with far too much power.
Cinema United (formerly the National Association of Theatre Owners) is sure to use the topic of consolidation as a calling card when trying to stop the nuptials during visits to Capitol Hill, the U.S. Department of Justice and various state Attorney Generals.
One major hurdle: Ellison has powerful allies in his corner. His father, mega-billionaire Larry Ellison, has long been a close friend of President Donald Trump, who in turn has taken the younger Ellison under his wing, including inviting him to attend the State of the Union Address earlier this week.
Until now, the spotlight has focused on Netflix, since it was the buyer-in-waiting. Now, it will shift to Ellison, and the first major Hollywood studio merger since Disney absorbed 20th Century Fox, a deal that finally closed in 2019 in a $71.3 billion deal.
“If Paramount or another major studio ends up displacing Netflix as the buyer, our concerns are no less serious,” Cinema United said in a statement following a Feb. 3 Senate Judiciary subcommittee hearing. “A combination of Paramount and Warner Bros., for instance, would consolidate as much as 40 percent of each year’s domestic box office in the hands of a single dominant studio.”
At the same, it could still diminish the overall number of releases. In 2016, Disney and 20th Century Fox released 26 new titles in more than 2,000 domestic theaters each. Last year, the combined total was 14, a 46 percent decline. The impact of this drop on domestic box office is that 20th (Fox no longer is part of the name) is estimated to have grossed $900 million less in 2025 than in 2016, a drop of 63 percent.
When Ellison’s Skydance took control of Paramount in August 2025, he stressed investing in content and technology. But his focus soon shifted to buying WBD, a decision that ultimately required billions in debt financing. Many simply assume that Larry Ellison, currently the world’s sixth-richest man, who has already providing a personal guarantee of more than $45 billion, will continue suppling financial assistance as needed since he’s been a driving force in going after WBD.
On Feb. 3, Sen. Mike Lee (R-Utah) grilled Sarandos during a hearing of the Judiciary subcommittee on antitrust, which he chairs. Lee, a self-proclaimed MAGA, invited Ellison to come, but Ellison declined. Lee had scheduled a follow-up hearing for March 4; it remains to be seen whether he keeps it on the books now that Sarandos is out of the mix, although Sen. Cory Booker of New Jersey, the leading Democratic member of the committee, immediately called for the hearing to continue so that Ellison will be required to answer their questions.
And in California, Attorney General California Rob Bonta wasted no time in stepping in regarding Paramount‘s proposed merger with WBD. “Paramount/Warner Bros. is not a done deal,” Bonta said on Thursday. “These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”
