{"id":4985,"date":"2026-08-06T05:36:52","date_gmt":"2026-08-06T05:36:52","guid":{"rendered":"https:\/\/uspropertymoves.com\/?p=4985"},"modified":"2026-08-06T05:36:52","modified_gmt":"2026-08-06T05:36:52","slug":"paramount-warners-bros-staffers-in-limbo-and-denial-as-merger-deal-drags-on","status":"publish","type":"post","link":"https:\/\/uspropertymoves.com\/?p=4985","title":{"rendered":"Paramount, Warners Bros. Staffers In Limbo and Denial as Merger Deal Drags On"},"content":{"rendered":"
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\n\tHas there ever been an industry as predisposed to sales, dispositions, mergers and megadeals as Hollywood? Over the last century, oil companies, soda conglomerates, cable providers and Big Tech giants have gobbled up studios and networks. Wealthy investors and private equity firms too. But with entertainment in the midst of an existential fight for time and attention, the stakes could never be higher.<\/p>\n

Read more A$AP Rocky Gives Update on Rihanna\u2019s Next Album: \u201cShe Cooking\u201d<\/a><\/p>\n

\n\tInside both Warner Bros. Discovery and Paramount, anxiety is pervasive in offices and studio lots as David Ellison\u2019s $111\u202f billion marriage stalls while 12 states take their legal fight to court with a winner-take-all trial set for March. <\/p>\n

\n\tThat uncertainty is causing a mix of panic and frustration at the highest levels. At the TV studio, it\u2019s made it that much more challenging to retain talent (see Quinta Brunson, who defected from Warners, where she had an overall deal, to Disney\u2019s 20th Television) or lure new names to the studio. One exec suggests that the strife in the CBS News division was not helping matters, as entertainment-side employees in left-leaning Los Angeles watched in horror as 60 Minutes <\/em>unraveled and accusations of interference were lobbed at its Ellison-appointed editor-in-chief Bari\u202fWeiss.<\/p>\n

\n\tMultiple execs who have worked through megamergers tell The Hollywood Reporter<\/em> that while the C-suite implores employees to be business as usual, it is challenging to do so in practice. Even for Warners execs, who have already lived through the sale to AT&T followed by the spin to Discovery, the Paramount sale (the third deal in a decade!) is just another distraction. That\u2019s just as true for staff at Paramount who are similarly uncertain about what the future holds.<\/p>\n

\n\tWith both WBD and Paramount set to undergo layoffs after the companies combine \u2014 about 2,495 jobs in L.A. County and about 6,000 globally are at risk, per a June estimate from L.A.\u2019s Department of Economic Opportunity \u2014 a drawn-out process only further entices staff to begin seeking employment elsewhere. And for competitors, a merger process is seen as a ripe opportunity to poach highly sought-after executives, as the WBD-Prime Video legal dispute over marketing exec Pia Barlow demonstrated.<\/p>\n

\n\tThe deal itself also has certain explicit limits on what Warners can and cannot do and monetary thresholds above which WBD needs Paramount\u2019s permission to act. While the merger agreement gives WBD a broad remit to keep operating, and a source at the company says that Paramount has not withheld consent on any issues brought to them thus far, another executive who lived through prior deals notes that the longer a deal drags on, the harder it is to maintain that status quo.<\/p>\n

\n\tThe first six months after a deal is announced tend to be the most straightforward, this exec adds, with things getting more complicated as it stretches beyond that. With the six-month mark looming and no end to litigation in sight, the pressure appears poised to ramp up. New shows and seasons will need to be ordered, blockbuster movies need to get a green light, licensing deals need to be signed, and streaming agreements need to be executed (many, in fairness, already have). But if Paramount and Warners find themselves at odds over a series pickup, over a film budget, over a licensing deal, things could go south fast.<\/p>\n

\n\tIt isn\u2019t a hypothetical scenario, either. Negotiations over the future of the Comedy Central series South Park<\/em> spilled into public view after Skydance, Paramount and Park County couldn\u2019t come to terms on a new deal. \u201cThis merger is a shit show, and it\u2019s fucking up South Park<\/em>,\u201d Trey Parker and Matt Stone said in a statement after the show\u2019s season premiere was delayed \u2014 and that was more than a year<\/em> ago.\u00a0<\/p>\n

\n\tUltimately, of course, all sides came to a $1.5 billion agreement after weeks of public infighting, but the bitter dispute underscores the risk involved.<\/p>\n

\n\tThere are a few clauses in the merger agreement that could cause issues as time goes on. For starters, there are limits on deals involving \u201ckey property\u201d IP, both for new deals (e.g., a film or series) or a licensing deal to a third party. The agreement does not specify what qualifies as a key property, but one can safely assume that franchises like Harry Potter, Game of Thrones<\/em> and DC are among them.<\/p>\n

\n\tWhile the company can do deals as part of the ordinary course of business, those deals are restricted to lasting only to two years past deal close. Anything longer would require giving Paramount first rights to negotiate. Sales or acquisitions of content may require Paramount approval if they hit certain financial thresholds (between $30 million and $400 million, depending on the deal, the length and other factors).<\/p>\n

\n\tThat was the issue that caused the South Park<\/em> battle, with Skydance disagreeing about the value and length of the deal that Paramount was prepared to execute with Park County.<\/p>\n

\n\tOne agent says that as the merger drags on, some A-list creatives may also think twice about taking a project to WBD if they fear that it could wind up in deal limbo. That could be a factor in Brunson\u2019s decision to move her overall deal from Warners to Disney earlier this summer, though Warners has inked others in recent months, including with The Pitt <\/em>mega-producer John Wells, Ryan Condal and Chris Ferguson.<\/p>\n

\n\tJohn Oliver, the popular HBO late night host, also inked a new one-year deal, though it would not have risen to the level of requiring Paramount approval.<\/p>\n

\n\tIn fact, several creatives with deals or business at one or both companies, including Denis Villeneuve and J.J. Abrams, signed an open letter opposing the merger in April. One of them, Damon Lindelof, said that he worked with Ellison and found him \u201cbright\u201d and \u201cambitious,\u201d but: \u201cHollywood mergers mean fewer movies and fewer TV shows, and that means fewer jobs.\u201d<\/p>\n

\n\tIndeed, previous mega-mergers haven\u2019t helped, with creatives still holding lingering resentment toward WBD for actions to cull content in favor of tax savings after Discovery executives took over, and the aftermath of the Disney-Fox merger still fresh in the minds of many.<\/p>\n

\n\tDan Gregor, a writer and producer on Chip \u2019n Dale: Rescue Rangers <\/em>and How I Met Your Mother<\/em>, points to a movie 20th Century Studios was slated to produce with him as the director before the title fell into a \u201cblack hole\u201d when Disney acquired 21st Century Fox. \u201cMergers are job killers,\u201d he says. \u201cI had a project in a very good spot at Disney. People were interested in producing, but the moment the merger happened, it died. It was a Fox project and Disney wanted to entirely do other things. The new producers had different mandates of what they were going to make.\u201d<\/p>\n

\n\tDozens of scribes shared similar experiences when they wrote to the FTC in 2023 in support of revisions to merger guidelines that ultimately made dealmaking tougher. The Take <\/em>writer Andrew Baldwin cited two productions Fox was interested in developing before they were scrapped because of the merger. \u201cDisney doesn\u2019t make original films like Fox does,\u201d he wrote. \u201cThey make only their own IP and live action remakes of their back catalog of old films.\u201d<\/p>\n

\n\tThese guidelines, which lowered the market threshold for a presumption of a violation of antitrust law, have emerged as a legal sticking point between Paramount and the states, with the studio arguing that courts aren\u2019t bound by the guidance.<\/p>\n

\n\tThe agreement also sets limits on deals the company can do with HBO Max (e.g., inking a bundle agreement, such as Peacock\u2019s recent deal with YouTube Premium), once again placing a limit of two years post-closing on them.<\/p>\n

Read more Regal Cinemas CEO Is Now Team Ellison, Too<\/a><\/p>\n

\n\tInside CNN, the angst has been building for months as staff look with apprehension at what is happening at CBS News under Bari Weiss and with a recognition that any merger of CBS News and CNN will naturally lead to significant layoffs. Both news orgs have significant staffing at the White House and in D.C., New York, Los Angeles and elsewhere, and with a combined company looking to save costs, there is resignation that major layoffs will follow, even if merging the unionized CBS News and nonunion CNN will be more complicated than it may seem at first glance.<\/p>\n

\n\tStaffers are seeing CNN become a political football, with David Ellison writing an Aug. 4 op-ed in The New York Times<\/em> saying outright that he believes the states\u2019 lawsuit is about his potential ownership of CNN, not market share in the theatrical landscape.\u00a0<\/p>\n

\n\tThen there\u2019s the strategy of it all, with CNN executing on Mark Thompson\u2019s digital transformation plan even as Weiss pursues her own plan at CBS. When Discovery took over WBD, one of the first orders of business was to shutter CNN+. Now some staff fear that once again their plans will be nipped in the bud, only for someone else to start a fresh plan once more. Thompson has tried to assuage concerns in recent meetings with staff, imploring them to keep on track with the company\u2019s objectives. As for rumors that the company could spin out CNN as part of a settlement with the states, inside the news channel there are mixed emotions on the possibility. Some are excited about the prospect of a takeover by Barry Diller, who said at a Wall Street Journal <\/em>conference in May that he wants to buy CNN \u201cbefore they ruin it any further. Hopefully before it\u2019s extinct.\u201d<\/p>\n

\n\tBut a forced sale could also bring out other buyers, from vulture hedge funds to politically minded billionaires and companies, which may not have any antitrust risks but could have visions for CNN that are not what staff hope for. And the concerns around CNN extend beyond its Hudson Yards newsroom. Creative talent in L.A. have expressed concern about what the future holds for the news brand. Ellison himself was quizzed about his plans for CNN in a meeting with Warners staff in the spring, telling employees that CNN would retain its independence. He reiterated that in the Times<\/em>, writing, \u201cI do not aspire to lead these companies to bend their newsrooms to my views.\u201d\u00a0<\/p>\n

\n\tOn the film front at Warner Bros., the marching order to troops is business as usual. After all, \u201cWe have been through this before with AT&T,\u201d notes one Warner Bros. film executive. <\/p>\n

\n\tAnd while that may just be the party line, the pace at which they have been putting things into development and acquiring projects hasn\u2019t slowed in the past couple of months. In May, the studio\u2019s specialty label Clockwork nabbed one of the splashier packages out of Cannes, the Park Chan-Wook-directed Western set to star Matthew McConaughey, Austin Butler and Pedro Pascal, while in June it was announced that the studio optioned the book Creation Lake<\/em> for Maggie Gyllenhaal to direct. (The latter move raised some eyebrows given that Gyllenhaal\u2019s last film for the studio, The Bride!,<\/em> grossed $24 million worldwide on a budget of $90 million.)<\/p>\n

\n\tIn the post-Obsession<\/em> and Backrooms<\/em> moment, the studio has also been actively pursuing digital native horror filmmakers and IP throughout the summer. Warners has entered the bidding war scrum on several projects, including the latest from Obsession<\/em> director Curry Barker, and landing film rights to the internet sensation Sirenhead<\/em>, with Weapons<\/em> director Zach Cregger set to co-write, in a multimillion-dollar deal.\u00a0<\/p>\n

\n\tBut there is one big, neon pink question mark hanging over the Warner Bros. film slate: Barbie<\/em>. As reported by The New York Times<\/em>, Margot Robbie, Ryan Gosling and writer-director Greta Gerwig have yet to make deals for a sequel to the $1.44 billion box\u202foffice smash, with David Zaslav reportedly balking at the proposed profit participation. The studio has until December to reach deals with talent and filmmakers, otherwise the rights revert to Mattel. (It should be noted that current movie chiefs Mike De Luca and Pam Abdy weren\u2019t the ones negotiating the deals on the first Barbie<\/em> movie; those were handled by then-studio head Toby Emmerich, who originally greenlit the film before his ouster in 2022.)<\/p>\n

\n\tAll of this comes as Warners is faring poorly at the 2026 box office, with Supergirl<\/em>\u2019s disappointing $125 million global gross as the latest example, especially as compared with 2025, which included commercial standouts Minecraft<\/em> and Weapons<\/em> along with Sinners <\/em>and One Battle After Another <\/em>sweeping the Oscars.<\/p>\n

\n\tOverseas, \u201cWe\u2019re still doing our thing, and they\u2019re doing their thing,\u201d says one WBD exec, noting that with the launch of HBO Max in Germany, France and the U.K. this year, \u201cwe\u2019ve got enough on our hands without worrying about what gets decided when over there [in the U.S.].\u201d<\/p>\n

\n\tThe studios\u2019 big Euro-based productions, like HBO Max\u2019s Harry Potter <\/em>TV series, and the All Creatures Great and Small <\/em>reboot, produced by Paramount-owned Channel 5, are going ahead as planned. Local film production operations for both studios are boutique compared to their U.S. counterparts.<\/p>\n

\n\tThe European Commission approved the Paramount-WBD merger in late July with one major condition, that Paramount exit UIP, its international theatrical distribution joint venture with Universal Pictures. Unwinding the 44-year-old JV will be a major undertaking, and Paramount will need to seek alternative distribution options across Europe. But Paramount has 13 months to get out, and the clock only starts ticking after the merger closes.<\/p>\n

\n\tUntil then, it\u2019s business as usual.<\/p>\n

\n\t\u201cPeople forget that the [2022] merger with Discovery almost didn\u2019t happen,\u201d said one veteran Euro exec. \u201cIt was touch and go until the deal was finally done. We didn\u2019t wait around then either.\u201d<\/p>\n

\n\tAs for the C-suite at WBD, the uncertainty around the deal brings its own sort of challenges. The most senior executives, including CEO David Zaslav, would receive nine-figure golden parachutes if the deal closes and they exit the combined company. If it doesn\u2019t, the expectation is that WBD stock falls off a cliff, and the company is forced to regroup and once again return to its plan to split itself in two, with Zaslav running the studio and HBO business and CFO Gunnar Wiedenfels taking over Discovery Global.\u00a0<\/p>\n

\n\tBack when Netlix and Paramount were competing for WBD, sources said that Zaslav and Wiedenfels were both enthusiastic about running their own separate companies before the deal waylaid those plans.\u00a0<\/p>\n

\n\tThere are already rumblings about what could happen after June\u202f4, 2027, when Zaslav and the WBD board will gain the option to exit the deal and receive the Paramount termination fee.<\/p>\n

\n\tFor many people inside the companies, from staff and executives to talent, the reality is they need to chug along, even as no one seems certain what comes next. \u201cWe\u2019ll just do what we\u2019ve done \u2014 which is continue like it isn\u2019t happening,\u201d says Oliver of the deal delay. \u201cNothing\u2019s happening and everything has stayed the same. That\u2019s the only way that we can really move forward. Total\u202fdenial.\u201d<\/p>\n

\nMikey O\u2019Connell, Winston Cho, Mia Galuppo, Lacey Rose and Scott Roxborough contributed to this report.<\/em><\/p>\n

\nThis story appeared in the Aug. 5 issue of The Hollywood Reporter magazine.\u00a0Click here to subscribe.<\/em><\/p>\n

Read more Ryan Murphy Goes Inside \u2018The Shards\u2019: How Bret Easton Ellis\u2019 Dark Memoir of Love and Murder Was Made for TV: \u201cWe Saw 500 Actors for These Parts\u201d (Exclusive)<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

As a lawsuit from 12 states halts David Ellison\u2019s $111 billion deal close until the March trial, Paramount and Warner Bros are in a holding pattern.<\/p>\n","protected":false},"author":1,"featured_media":4984,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1059],"class_list":["post-4985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting","tag-business-features"],"yoast_head":"\nParamount, Warners Bros. 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