David Ellison Sweetens His Hostile Takeover By Promising to Release 30 Theatrical Movies A Year

Right now, there are multiple companies in the middle trying to acquire Warner Bros. Discovery. It started with a ton of bids, and then Netflix won out, but now Paramount Skydance, led by David Ellison, is attempting a hostile takeover by offering a higher shareholder price.

And after all this happens, we still need a governmental regulatory committee to approve whoever emerges as the victor.

But with all this drama happening, Paramount is still trying to sweeten their deal to amp up vocal public support and sway the WBD board to take their bid instead of Netflix.

Let's dive in.

The Theatrical Plea

According to a report from Deadline, David Ellison got on the phone and stated his case for why Paramount should win this bid.

He said, “...The Writer’s Guild of America have already issued a statement that a deal must be blocked. Hollywood legends, like James Cameron and Jane Fonda 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.”

Ellison continued, “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."

This is all based on what sources have told Deadline, which is that Netflix is pushing a 17-day exclusive theatrical window instead of the 45-day window, which theaters and traditional studios love.

That gives movies way more time to find an audience in theaters before premiering on VOD, where people can rent them at home.

“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 continued, “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.”

Netflix's Plans

Of course, if Netflix owned WB, they would want their movies to appear on their platform ASAP, because it helps subscriber retention.

So they want the ability ot own a studio with a deep catalog and lots of IP that they can then pick and choose which movies they'll put in theaters, but also have them appear online ASAP.

A lot of this is speculation because they don't make actual plans public, so we have to go with what we have seen them do and guess.

Ellison's core argument has to do with Netflix's repeated statements about how people want to watch movies at home.

The emphasis is that their plan will essentially have a ripple effect that not only makes them a huge monopoly in streaming but also eliminates jobs as movie theaters close all over the country, thanks to taking around 25% of all movies released out of theaters and onto their platform.

Ted Sarandos, CEO of Netflix, has the same defense as Ellison's promise: thirty movies. “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. But it is worth noting that of 30 movies Netflix put in theaters, none except for KPop Demon Hunters Singalong were wide releases.

They were just qualifying runs for the Academy Awards, sometimes only in a handful of theatres in New York and Los Angeles.

Summing It All Up

This whole acquisition has been a mess, with hostile bids, different deals, and unions freaking out over the future of the business.

At the end of the day, what most people want is a healthy theatrical market where jobs are created for people who want to make movies.

Sure, these windows will probably have to change in some ways, maybe go down to 30 days, but I think it's worth fighting to keep theaters alive.

Let me know what you think in the comments.