Should Paramount succeed in acquiring Warner Bros, the combined studio will release more than 30 theatrical titles a year. This was Paramount CEO David Ellison’s promise during a phone presser following news of the conglom’s hostile takeover bid for Warner Bros Discovery.
Such words mean a tremendous amount to exhibition and some content creators in the industry who have been fearful about a Netflix-Warner Bros. marriage. Netflix co-CEO Ted Sarandos spoke about his commitment to theatrical if the streamer acquires Warner Bros, but he hopes to “evolve” the window to meet consumer’s demand for content. Netflix recently dropped the ball on the theatrical release for Rian Johnson’s threequel Wake Up Dead Man: Knives Out Mystery, failing to book the top three theater chains due to a lack of a 30 day window. The movie did substantially less in its limited release with over $4M in its 5-day Thanksgiving launch versus when Netflix had the chains on board for the franchise’s previous chapter, Glass Onion, in 2022 which grossed $13M+.
Said Ellison on the phoner this AM, “Including the Writer’s Guild of America have already issued a statement that a deal must be blocked. Hollywood legends, like James Cameron and Jane Fondant have spoken out, describing the (Netflix) deal as a disaster for theatrical films. Paramount’s proposal provides vastly superior certainty and projections for WBD’s shareholders and the Hollywood community.”
“Paramount is committed to growing the film and TV output of both businesses, including a theatrical slate of 30 plus theatrical releases per year. We’re going to satisfy the needs of the moviegoing public,” he added.
While Sarandos didn’t specify the length of the window that Netflix would strive for in a post Netflix-Warner Bros world, sources with knowledge of the situation say that the streaming boss has been pushing a 17-day exclusive theatrical window versus the 45-day window which the top three circuits crave. Netflix has been essentially stunting with theatrical of late. They were able to get No. 2 and No. 3 circuits Regal and Cinemark onboard for their theatrical release of KPop Demon Hunters Singalong in late August, which delivered their first No. 1 at the box office with $19M. The movie dropped weeks after debuting on Netflix where it had already racked up record views. Netflix is teaming with exhibition for the Stranger Things series finale which will play movie theaters Dec. 31 and Jan. 1 (the two-hour episode drops on New Year’s Eve). Due to talent residual rights issues, a movie ticket price can’t be charged. Exhibitors are reserving seats by charging moviegoers a $20 concession voucher (all that money, they can keep). For exhibition, Strangers Things and KPop Demon Hunters qualify as alternative programming in their chains; they’re the exception to a full-bodied theatrical release (hence the reason why such content isn’t beholden to windows standards).
“We’ve released about 30 films into theaters this year, so it’s not like we have this opposition to movies in theaters,” said Sarandos on a Friday call with Wall Street fresh off clinching a mega deal to acquire Warner Bros. However, none of these movies, except for KPop Demon Hunters Singalong, have been wide releases. Netflix movie titles are limited releases and typically serve the purpose of qualifying for Oscars.
“My pushback has been mostly in the fact of the long, exclusive windows, which we don’t really think are that consumer friendly,” Sarandos added.
“The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world,” exclaimed Cinema United President and CEO Michael O’Leary on Friday in response to a potential Netflix-Warner Bros merger.
He expounded, “Cinema United stands ready to support industry changes that lead to increased movie production and give consumers more opportunities to enjoy a day at the local theatre. But Netflix’s stated business model does not support theatrical exhibition. In fact, it is the opposite. Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition and the entertainment industry. This mega-deal between Netflix and Warner Bros. would risk removing 25% of the annual domestic box office if films that are traditionally given a robust theatrical release by Warner Bros. disappear from theatres. Netflix currently grants only a handful of their films a token theatrical release and the overwhelming.”
Paramount today announced it has begun an all-cash tender offer to acquire all of the outstanding shares of Warner Bros. Discovery for $30 per share, an operation it says equates to an enterprise value of $108.4 billion. Their play calls for the entire Warner Bros Discovery, linear networks et al, versus Netflix’s eye for Warner Bros Studio (theatrical and TV production) and HBO Max streaming service.
The Netflix deal for Warners is worth $72 billion in equity value (enterprise value $82.7 billion enterprise value) with Warner Bros. selling assets to Netflix for $27.75 a share in cash and stock. The Warner Bros-Netflix union is pending regulatory approval, with the transaction happening post WBD’s break-up between motion picture/streaming studio and a linear network operation (that expected to occur in 2026 Q3). The process is expected to take 12 to 18 months to close.