Two and a half months ago, David Zaslav stood before Warner Bros. Discovery employees and heralded a bold future under Netflix ownership. On Friday morning, he returned to a similar virtual stage with a different message: Paramount had emerged as the winning bidder.
The whiplash was palpable.
In a brief, 20-minute Zoom town hall at 8 a.m. Pacific time, Mr. Zaslav, joined by Chief Revenue and Strategy Officer Bruce Campbell and Chief Financial Officer Gunnar Wiedenfels, attempted to frame the sale of Warner Bros. Discovery to Paramount as a triumph. “We’re the envy of all of the industry,” Mr. Zaslav told employees, according to people who attended.
But inside the company, the reaction was far more subdued — and in many cases, openly distressed.
“The mood is really bad,” one staff member said afterward, echoing the sense of shock and disappointment that rippled across the rank and file following Thursday’s announcement that Netflix had withdrawn after Warner Bros. Discovery accepted what executives described as Paramount’s “superior offer.”
From Netflix to Paramount — in Weeks
The speed of the reversal startled employees and executives alike.
In December, Mr. Zaslav had championed a potential sale to Netflix, a transaction that would have reshaped Hollywood by marrying the most dominant streaming platform with one of its most storied studios. At the time, the deal was presented as transformative — a way to pair Warner Bros.’ century-old film and television library, HBO’s prestige brand and CNN’s global reach with Netflix’s scale and technological prowess.
Instead, Paramount’s bid prevailed. Executives told staff that Paramount’s courtship accelerated quickly, with its offer climbing from $19 per share to $31 per share. Mr. Zaslav described the process as “whiplashy,” according to one attendee.
The higher price ultimately swayed the board, even though the strategic logic differs markedly from a Netflix combination.
On Friday, shares of Warner Bros. Discovery rose in early trading to hover near the $31 per share offer price, signaling investor confidence that the deal would proceed. Paramount Global shares, by contrast, slipped modestly amid concerns about integration risk and the financing required for the acquisition. Netflix stock edged down slightly, reflecting investor relief that the company avoided what some analysts had viewed as an expensive and potentially distracting purchase.
A Company Still Recovering
Warner Bros. Discovery has been in near-constant flux since the 2022 merger of WarnerMedia and Discovery. That transaction saddled the combined company with significant debt and ushered in sweeping cost-cutting: projects were scrapped, divisions consolidated and thousands of jobs eliminated.
Mr. Zaslav has argued that those painful measures stabilized the company’s finances and restored its creative engine. In recent months, the Warner Bros. film and television studios have posted commercial successes, HBO has maintained its cultural dominance with high-profile series, and the Max streaming platform has shown subscriber gains after a turbulent rebranding.
At the town hall, some employees said Mr. Zaslav credited teams across the company for rebuilding the studios and strengthening streaming. Others perceived his remarks as self-congratulatory, particularly references to “turning the company around” under current leadership.
Several employees described the executives’ tone as tentative. “You can tell there was a level of sheepishness trying to sell that bigger is better,” one attendee said.
Fear of What Comes Next
For many inside Warner Bros. Discovery, the prospect of another merger evokes dread rather than opportunity.
The company has already endured two major rounds of layoffs in the past two years. A combination with Paramount — itself in the midst of restructuring under new leadership — is widely expected to produce further job cuts as overlapping operations are streamlined.
One employee said colleagues had watched in alarm as Paramount’s new management aggressively trimmed costs. “People are scared,” the employee said.
The uncertainty extends to marquee brands. Under the previously discussed Netflix deal, CNN would likely have remained aligned with Discovery assets in a spinoff entity. Under Paramount, CNN could be integrated alongside CBS News — a prospect that has raised questions internally about editorial direction and leadership.
“Ted didn’t need the deal — the country needed it because of CNN,” one Warner Bros. Discovery employee said, referring to Netflix’s co-chief executive Ted Sarandos. After Netflix declined to raise its bid, executives there characterized the acquisition as a “nice to have” at the right price, not a “must have.”
The comment has lingered inside Warner Bros. Discovery, underscoring the divergent strategic motivations of the bidders.
What It Means for Paramount — and for Hollywood
If completed, the transaction would mark one of the most consequential consolidations in modern media.
Paramount would gain the Warner Bros. film and television libraries — including DC Comics, “Harry Potter” and a deep catalog of classic films — as well as HBO’s premium brand and Max’s growing streaming footprint. The combination could bolster Paramount+ and strengthen the company’s negotiating position in sports rights and international distribution.
Yet the deal also compounds industrywide challenges. Traditional television networks continue to lose subscribers and advertising revenue. Streaming remains fiercely competitive and capital-intensive. Regulators may scrutinize the merger for its impact on competition in news and entertainment.
Culturally, the union would knit together some of the most influential institutions in American media: the Tiffany Network of CBS, the cinematic legacy of Warner Bros., the prestige storytelling of HBO and the 24-hour news presence of CNN. For creators, it could mean new pathways — or fewer buyers. For audiences, it could reshape where and how flagship franchises are distributed.
For Netflix, walking away preserves its balance sheet and strategic flexibility. The company, long focused on organic growth and selective production deals rather than transformative mergers, avoids absorbing billions in debt and the operational complexity of integrating a sprawling legacy conglomerate. Investors appeared to interpret the retreat as disciplined capital allocation rather than defeat.
Silence in the Zoom Room
Despite the magnitude of the news, Friday’s town hall included no live questions from employees, according to attendees. Workers were invited to submit questions in advance, but none were addressed in real time.
“People could not believe they took no questions from employees,” one person said. “Amazing how out of touch they are.”
The town hall followed a 7 a.m. leadership meeting where questions were permitted, though none were asked. “The silence says it all,” another employee observed.
For Mr. Zaslav, who has repeatedly emphasized that scale is essential to survival in the streaming era, the Paramount deal represents a decisive — if abrupt — strategic turn. For many of his employees, it feels less like a victory lap than the beginning of another uncertain chapter in a company that has rarely stood still.
Whether the combined entity will indeed be “the envy of all of the industry” remains to be seen. For now, inside Warner Bros. Discovery, envy is not the prevailing emotion.
