The unanswered questions as Ellison prepares to takeover WBD

The months-long battle for the soul of Hollywood has reached a definitive turning point as Netflix officially withdrew its proposal to acquire Warner Bros. Discovery (WBD), clearing a path for David Ellison and Paramount-Skydance to claim victory.

The potential $111 billion merger would unite two of the industry’s most storied "Big Five" studios, fundamentally altering the entertainment landscape at a time of seismic technological and audience shifts.

The resolution came Thursday when Warner Bros. Discovery declared Paramount’s revised offer of $31 per share a "superior proposal."

The announcement gave Netflix a four-day window to counter, but the streaming giant opted to walk away rather than increase its $82.7 billion all-cash bid.

For David Ellison, the producer behind "Mission: Impossible" and "Top Gun: Maverick," the victory follows nearly six months of aggressive manoeuvring, including unsolicited offers and a hostile tender bid that eventually forced WBD to the negotiating table.

While the agreement marks a personal triumph for the 43-year-old Ellison, the consolidation of massive assets—including HBO, CNN, and the Warner Bros. film lot—has already sparked a firestorm of regulatory warnings and editorial anxiety.

Regulators signal the fight is not over

Despite the apparent winner, the deal is far from sealed.

California attorney general Rob Bonta warned that regulatory approval could not be taken for granted, saying the merger “is not a done deal”.

“These two Hollywood titans have not cleared regulatory scrutiny,” Bonta said in a social media post, adding that the California Department of Justice has an open investigation and intends to conduct a vigorous review.

His office has previously described the entertainment industry as a critical sector for California’s economy.

Beyond California, Paramount Skydance would also need clearance from the US Department of Justice and European competition authorities, setting the stage for what could be a lengthy and uncertain approval process.

A reshaped media empire and the lure of the film studio

The acquisition would grant Ellison control over an unprecedented portfolio.

Pending regulatory approval, Paramount Skydance would own Warner Bros., HBO, and cable channels such as CNN, TNT, TBS and Food Network.

The combined group would bring together some of the industry’s most lucrative franchises, including Mission: Impossible and Top Gun, alongside television hits ranging from SpongeBob SquarePants to Yellowstone.

By absorbing WBD, Paramount adds the prestige of HBO and a film studio that ranked second in domestic box office last year.

“If a merger were to be approved, the entity that then grabs up Warner Bros. would add tremendous horsepower both in terms of brand identity and revenue generating potential to their portfolio,” said Paul Dergarabedian, head of marketplace trends at Comscore in a CNBC report.

“So, it is understandable why the competition is fierce.”

Editorial independence and the "CNN question"

The proposed merger has also raised alarms within news organisations.

Paramount’s portfolio already includes CBS News, and absorbing CNN would likely intensify scrutiny from media watchdogs concerned about concentration of influence.

Ellison has reshaped CBS News since taking over Paramount, installing Bari Weiss as editor in chief and positioning the network to appeal to what he has described as a centre-left to centre-right audience.

Within CNN, the prospect of new ownership has unsettled staff.

CNN chief executive Mark Thompson circulated a memo urging employees not to jump to conclusions, according to the New York Times.

Still, reporters and producers have privately voiced fears that the network’s editorial independence could be compromised.

“The idea that Paramount should be allowed to control CBS and CNN should be unthinkable,” said Craig Aaron, co-CEO of the media advocacy group Free Press, warning that political pressures could shape editorial decisions.

Jobs, streaming and other unanswered questions

Beyond editorial concerns, the deal raises the prospect of job cuts.

According to Variety, overlapping production operations across film and television are likely to be streamlined, with uncertainty hanging over thousands of roles.

Questions also remain over strategy.

Industry observers are divided on whether HBO Max and Paramount+ would continue as separate streaming services or eventually merge.

The future of the Warner Bros. studio lot in Burbank, and the long-term direction of CNN, are also unclear.

As one Warner Bros. Discovery insider put it to Variety, there are “more questions than answers” as staff brace for potential upheaval.

For now, Netflix’s exit has brought clarity to a turbulent auction.

Yet with regulators circling and internal tensions simmering, Paramount Skydance’s victory may prove only the beginning of another long chapter in Hollywood’s consolidation saga.