Decoder with Nilay Patel:
What’s Next for Netflix and Paramount in the Warner Bros. Battle
Original Episode Date: December 22, 2025
Host: Peter Kafka (for episode), Lucas Shaw (guest, Bloomberg)
Theme: The high-stakes bidding war for Warner Bros. Discovery (WBD), involving Netflix, Paramount-Skydance (Ellison family), and the larger implications for Hollywood, streaming, and media consolidation.
Episode Overview
This episode of "Decoder" features The Verge’s Nilay Patel introducing a crossover with “Channels” hosted by Peter Kafka. The central theme is the fierce, unresolved battle for Warner Bros. Discovery between Netflix and Paramount-Skydance, with significant implications for the media landscape. Guest Lucas Shaw, Bloomberg’s lead reporter on the story, breaks down the rapidly evolving situation, the deeper forces at play (regulation, foreign investment, Hollywood's shifting sentiments), and what this monumental deal means for the future of movies, TV, and streaming.
Key Discussion Points and Insights
Current State of the Deal (02:43 – 05:38)
- Where We Are: Netflix was the surprise front-runner for WBD two weeks prior, but Paramount has since placed a fresh bid. WBD must now respond—are they willing to reopen the contest?
- Board Dynamics:
- The WBD board is expected to decline Paramount's offer but may invite a better bid (05:38).
- Deal isn’t locked until formal board/shareholder approval—bidding isn’t necessarily over.
Notable Quote:
"Paramount has now made six offers to buy Warner Bros. Discovery, every single one of them rejected. If they make a seventh that is even higher, the board would have a fiduciary responsibility to engage."
— Lucas Shaw (06:47)
The Bidding War: Who Blinks First? (06:33 – 08:26)
- Both sides (Paramount and Netflix) appear intent on continuing to outbid each other.
- Netflix shareholders are lukewarm, with share values slipping, but both parties are reputed for being aggressive and not used to losing.
- Netflix’s public status (vs. private Ellisons/Skydance) means shareholder discontent could sway their resolve.
Notable Quote:
"You have two entities that are not used to losing. The Ellisons are used to getting their way. Netflix is used to getting their way. And one of them has to lose here."
— Lucas Shaw (07:22)
Paramount’s Options If Shut Out (08:46 – 09:56)
- Paramount could sue WBD, claiming an unfair process, though this is risky and rare in M&A.
- They could attempt to appeal directly to WBD shareholders to override the board’s decision.
- Paramount is actively courting shareholders, but there is no tangible preference—most just want a higher payout.
The Trump Administration’s Role and Regulatory Hurdles (09:56 – 15:18)
- Trump Factor: Despite public posturing, Lucas Shaw predicts former President Trump will have minimal direct impact on the deal outcome.
- Regulation: Both potential mergers (Netflix or Paramount acquiring WBD) will face intense antitrust and regulatory scrutiny.
- Netflix: May be seen as consolidating too much streaming power.
- Paramount: Stakes around Middle Eastern (Saudi, Qatari, UAE) sovereign wealth fund financing, potentially triggering CFIUS (Committee on Foreign Investment in the US) review.
Notable Quote:
"The winner ... is going to be the company that offers the best deal. And then Donald Trump will ... demand something of the winner."
— Lucas Shaw (11:06)
- There’s ongoing concern over the huge (and largely unchallenged) influx of Middle Eastern oil money into Hollywood—$24 billion is double what the Ellisons are putting up themselves (15:18).
Hollywood’s Reactions, Hypocrisies, and Insider Perceptions (16:49 – 21:19)
- Outrage at Netflix: Hollywood has been critical of the prospect of Netflix as buyer, especially given Netflix’s history as a disruptor.
- Muted Reaction to Middle Eastern Ownership: Many in the industry, even self-identified liberals, are actively courting Middle Eastern investment and acknowledge it’s become normalized at the highest levels.
- Worker vs. Industry Elite: Crew and creatives feel Netflix’s impact more immediately than the abstract threat of foreign capital (19:04).
Notable Exchange:
"If you're a writer or a producer, you are living day to day feeling how Netflix has affected your life."
— Lucas Shaw (19:04)
Why Would (and Should) These Companies Buy WBD? (26:33 – 31:50)
- Who Needs It More? (28:29): Paramount, being the smaller and weaker player, needs WBD more to bulk up and compete.
- Netflix’s Motive: Signals that the company might not be as secure as commonly assumed, despite their strong position—they see WBD/HBO as a rare, potentially never-to-be-repeated acquisition opportunity.
Notable Quote:
"If David Ellison buys it, he’s not getting rid of it. Universal’s not going anywhere. Disney’s not going anywhere. What else comes along?"
— Lucas Shaw (30:04)
- Most Valuable Asset: The WBD TV/movie studio is the real prize; the HBO brand and streaming infrastructure are attractive, but the content library is paramount for both buyers.
What Happens to Media Consolidation Next? (31:50 – 35:53)
- Future M&A: If Netflix wins, other giants (Disney, Comcast) may be forced to react, spurring further industry consolidation.
- Tech Giants Absent: Despite rumors, traditional tech companies (Apple, Amazon, etc.) passed on bidding. For Apple, entertainment is still a “side project.” Amazon’s big MGM deal underperformed; this deal would be even larger and riskier.
Notable Quote:
"Apple never does big deals ... for Amazon, it would be the biggest deal they've ever done. And how are you going to your shareholders and saying the biggest deal we need to do is in this business that is not our most important business?"
— Lucas Shaw (35:53)
AI’s Year in Hollywood (40:19 – 45:10)
- Disney & OpenAI: A $1B partnership signals a symbolic shift, but practical impact remains to be seen. Licensing characters is big, but there’s no certainty that user-generated AI content will become central to entertainment.
- AI's Real Impact: The most immediate effect will be in reducing costs and increasing speed in production (e.g. VFX, pre-visualization, post-production tweaks).
- Job Loss Fears: The greatest anxiety lies in AI replacing rank-and-file workers (background actors, grips, etc.) rather than harming top-tier creative talent.
Notable Exchange:
"Nobody is going to be—if (AI) just becomes a tool to make visual effects more efficient, or better ... that's not a huge deal. But if suddenly what is a 90-day production is 30 days or you have certain jobs that get replaced ... that does mean less work."
— Lucas Shaw (43:57)
End-of-Year Recommendations (46:44 – 49:33)
- Movies: “The Secret Agent” (Brazilian film)
- TV: Martin Scorsese docuseries on Apple TV+ (“not hagiography, it does not pull punches”)
- Music: New albums by Lily Allen, Rosalia; the band Geese; punk act Lambrini Girls
Notable Quotes & Moments (with Timestamps)
- On the Board’s Leverage (05:38):
- "Thank you for this generous offer. We decline. We already declined this offer. The big question is... if you want to offer us even more money, we're open to having a conversation."
- On Trump’s Public but Ineffectual Role (11:06):
- "He likes making it appear as though he is the person who, you know, decides things. But I don't think that he exerts any real influence until someone has been selected."
- On AI and Job Fears in Hollywood (43:57):
- "If suddenly what is a 90 day production is 30 days or you have certain jobs that get replaced ... that does mean less work."
- Recommendation Wrap-Up (48:02):
- "Movies I've been struggling with ... but I just went to see this Brazilian movie, The Secret Agent, which I really enjoyed ... The last TV show ... that I would recommend is the Martin Scorsese docuseries on Apple."
Key Timestamps for Important Segments
- State of the WBD Sale; Board’s Strategy: 02:43 – 07:08
- Bidding Dynamics, Shareholder Reactions: 06:47 – 08:46
- Paramount’s Legal and Strategic Options: 08:58 – 09:56
- Trump Administration & Regulatory Concerns: 09:56 – 16:10
- Hollywood’s Anxiety, Netflix vs. Foreign Money: 16:49 – 21:19
- Why Acquire WBD? Company Strategies: 26:33 – 31:58
- Next Era of Mergers & Absence of Tech Giants: 31:50 – 35:53
- AI in Hollywood, Disney-OpenAI Deal: 40:19 – 45:10
- Personal Media Recommendations: 48:02 – 49:33
Tone and Atmosphere
The conversation is candid, lightly skeptical, and full of industry insider context—Kafka and Shaw share a lightly irreverent, conversational tone, blending analysis with personal anecdotes. The stakes and challenges of the WBD deal are treated with both gravity and a clear-eyed, slightly weary awareness of the cyclical hype of media mergers.
Conclusion
This episode offers a deep, nuanced exploration of the battle for Warner Bros. Discovery, illuminating the business chess game at the heart of media—and what the outcome might mean for the future of streaming, regulation, and Hollywood itself. It’s a must-listen for anyone interested in the mechanics of the modern entertainment industry.
For full listening or further reference, seek out the episode: "What’s next for Netflix and Paramount in the Warner Bros. battle" from Decoder/Channels, December 22, 2025.