The battle over who will own Warner Bros Discovery is a plot line worthy of a Hollywood drama.
The sale of any company, big or small, is a complex affair that involves a team of professionals, lengthy negotiation and a great deal of money.
But the acquisition of Warner Bros Discovery also features personal dinners, Gulf financing, desperate texts — and some of the richest and most powerful people in the world.
The cast includes Hollywood heavyweights, tech billionaires, and Donald Trump's son-in-law Jared Kushner.
It is not hard to guess why there has been a messy scramble to secure the keys to one of the crown jewels of Hollywood.
Warner Bros Discovery is home to some of the biggest films in cinema, including Casablanca and the Harry Potter franchise, as well as a slate of hugely popular HBO shows such as the Sopranos and Succession.
The company went through a mega merger in 2022 when WarnerMedia — a behemoth that owned Warner Bros studios, HBO and CNN — merged with the smaller Discovery, which specialised in factual content such as the Discovery Channel and Animal Planet.
But with deteriorating ratings and revenue decline in its cable network in the age of streaming, chief executive David Zaslav announced in June that Warner Bros Discovery would cleave itself into two companies.
The assumption was that its parts could be worth more than the whole, with the television, movies and streaming business to be spun off into one publicly traded company and its cable networks, including CNN, into another.
That is when chief executive of Paramount Skydance David Ellison, the son of billionaire Oracle founder Larry Elllison, entered the chat with a pitch to gobble up the company in its entirety before it was divided.
In what analysts describe as takeover season in the movie industry, the younger Ellison had just pulled off a similar deal with his company Skydance's purchase of Paramount to create Paramount Skydance.
The deal lifted Ellison into the rarefied circle of media moguls. Acquiring Warner Bros Discovery would be another feather in his cap.
In a bid to obtain Warner Bros Discovery, Ellison wined and dined his Warner Bros counterpart, personally visited Zaslav's Beverly Hills home and, when that didn't work, upped his bids.
But Zaslav was unmoved, leaving the field free for Netflix and Comcast to swoop in with rival offers.
Netflix emerged victorious in early December with the shock announcement the streaming giant would acquire the iconic Warner and HBO properties for $US72 billion ($108 billion).
"Warner Bros have defined the last century of entertainment, and together we can define the next one," Netflix co-chief executive Ted Sarandos said at the time.
But Paramount is not ready to let Netflix walk away with its prize.
This week Ellison left his Mr Nice Guy approach behind and deployed the ace up his sleeve, launching a hostile takeover bid for Warner Bros in an effort to torpedo the Netflix deal.
His financial backers include his billionaire father and Trump's son-in-law, Kushner.
The dramatic escalation in the fight for Warner Bros Discovery is one of the biggest in recent corporate memory, and kicks off film industry panic about the future of mainstream movie-making and movie-going.
The cast of players in Paramount's offer
David Ellison has been involved in the business-side of Hollywood for some time.
He started his career with a short stint acting before moving behind the camera to launch Skydance in 2010.
The media production company has funded a mix of films including sequels to blockbuster franchises such as Mission: Impossible, Top Gun: Maverick, Star Trek, and Terminator.
Ellison's Paramount purchase fuelled his ascendancy, but acquiring Warner Bros Discovery would have put the company in a better position to compete against streaming giants Netflix and Disney.
Adding HBO Max's roughly 120 million streaming customers to Paramount's 79 million was an opportunity too good to pass up.
Between September and early December, the Ellisons made six bids for Warner Bros Discovery, according to filings with the Securities and Exchange Commission. Last week, they increased the offer to $30 a share, all cash.
But Ellison's financing structure became something of a sticking point in the bid to acquire Warner Bros.
The Ellisons were stumping up only $US11.8 billion of the tens of billions in equity needed to finance the offer.
About $US24 billion was set to come from three Middle East sovereign wealth funds — the Public Investment Fund of Saudi Arabia, the Qatar Investment Authority (QIA), and L'imad Holding Company PJSC, which is owned by Abu Dhabi.
Two other funds — Jared Kushner's private equity fund Affinity Partners, and investment management firm RedBird — were also set to tip in equity, while three banks — Bank of America, Citigroup and Apollo — agreed to finance a further $US54 billion in debt commitments.
Tencent, the Chinese tech company, was at one time involved but pulled out of the deal.
The list of names is notable because of their association with Donald Trump — David Ellison's father is a prominent Trump supporter, Kushner is a close family member, and some of the wealth funds are in countries the US president has wooed to make investments in America.
Kushner's involvement in the Paramount bid also marks the second time he and Saudi Arabia's Public Investment Fund have teamed up on a business deal this year after Affinity Partners formed part of the consortium that agreed to buy Electronic Arts Inc for $US55 billion.
Mr Trump has said he would be personally involved in the decision on whether a proposed merger between Netflix and Warner Bros Discovery should go forward.
He said none of the businesses involved in the Warner Bros Discovery purchase are "particularly great friends of mine".
But in an interview with CNBC, David Ellison argued that Paramount's offer would face less scrutiny from US regulators because of the company's small size and friendly relationship with the Trump administration.
Paramount's efforts rebuffed
Netflix and Paramount appeared to be locked in a tight race for Warner Bros from October until December.
That's when Warner Bros Discovery aired concerns over the non-US investors involved in the Paramount bid as well as the complexity of multiple funding sources.
The worry was that the financing would reportedly invite a review from the US government's security apparatus.
In recent filings, the PIF, Affinity Partners, L'imad and QIA agreed to forgo any governance rights or board seats, which Paramount said would eliminate the problem.
Two Democrats — Sam Liccardo and Ayanna Pressley — have since sent a letter to Zaslav expressing "serious national security concerns" over the Paramount bid for Warner Bros Discovery because of its backing by Gulf sovereign wealth funds.
"As one of the most influential media companies in the world, Warner Bros Discovery shapes America's news, entertainment, and cultural content like few companies on the planet," Mr Liccardo said in a statement, per Variety.
"Equally important, the company has private financial and personal data of tens of millions of Americans.
"We cannot allow powerful — and brutal — foreign-backed investors access to this trove of personal data, and to obtain influence over our nation's news ecosystem, without full scrutiny mandated by the law."
On December 4, the Paramount board met and discussed Warner Bros Discovery's rejections of each of its proposals and how to further improve upon their offer, according to filings.
When the meeting wrapped up, Ellison reached out to Zalsav via text.
"Just tried calling you about new bid we have submitted," Ellison texted Zaslav, according to fillings.
"I heard you on all your concerns and believe we have addressed them in our new proposal. Please give me a call back when you can to discuss in detail."
He didn't hear back, so he followed up:
"It would be the honor of a lifetime to be your partner and to be the owner of these iconic assets. If we have the privilege to work together you will see that my father and I are the people you had dinner with. We are always loyal and honorable to our partners and hope we have the opportunity to prove that to you," he wrote.
The next day, Netflix announced it was acquiring Warner Bros Discovery.
Netflix emerged triumphant but Paramount is still fighting
Netflix is the apex predator in the streaming world, with around 300 million subscribers compared to Paramount Plus' 79 million.
When the company first emerged as a market disrupter in the late 1990s, it revolutionised entertainment by mailing DVDs to people to rent as part of a subscription service before getting into the streaming business.
Netflix largely avoided noisy acquisitions of legacy assets and in the 2010s pivoted to making its own shows such as Stranger Things and Squid Game.
The Warner Bros Discovery deal will bolster its movie offerings with the added bonus of thwarting any potential rivals looking to acquire the film and streaming division.
The transaction values Warner Bros Discovery at $US27.75 per share, implying a total equity value of $US72 billion and an enterprise value of $US82.7 billion.
If the Netflix offer goes through Warner Bros Discovery will be split into two.
One company will be named Warner Bros and house the movie studio and HBO, while the other will be called Discovery Global, and include CNN and cable channels.
Once the split takes place Netflix plans to buy the Warner Bros half.
But Paramount, which lost out to Netflix in a bidding war, has not given up the fight for Warner Bros Discovery.
It is urging shareholders to accept a $US30-per-share bid for the entire company, not just the movie and streaming business.
In a letter to the Warner Bros Discovery board, Ellison argued Paramount's all-cash offer is "superior" to the transaction with Netflix, per Variety.
The proposal has drawn scrutiny because it would put CBS and CNN — two big American broadcasters — together under the same parent company.
Meanwhile, Netflix's potential acquisition raised questions over the consolidation of streaming services, given it will unite the top streamer with HBO.
Its offer will also receive significant US regulatory scrutiny under antitrust laws.
But Netflix's Sarandos remained optimistic about the future of the deal.
"Today's move was entirely expected," he said at a UBS investor conference hours after Paramount launched its hostile takeover bid.
"We have a deal done … We're super confident we're going to get it across the line and finish."
The future of films
Netflix is not known for putting its movies into theatres, so a key question around the deal is whether a Warner Bros owned by the streaming giant will remain centred on theatres or shift focus to streaming.
Sarandos, in the wake of the announcement, said Netflix would look to make the time between films screened exclusively in cinemas and available on streaming more "consumer friendly".
That's been taken to mean the company may shorten cinema runs and pivot to making movies quickly available to watch at home.
"For a lot of people, myself included, it feels like the death knell to the film industry as we know it," Chris Bumbray, editor-in-chief of entertainment news website Joblo.com, told ABC News Daily.
"It feels like movie theatres, which are already on shaky ground, aren't going to exist in a couple of years because people are going to see [theatre releases] less and less.
"And frankly they're going to have a lot less product if Warners is bought out by Netflix. It is one of the few remaining film studios."
The sale of Warner Bros Discovery has also drawn in A-listers and industry heavyweights, including actress Jane Fonda who argued that regardless of which company ends up acquiring it, a "consolidation at this scale would be catastrophic for an industry built on free expression".
Warner Bros Discovery has said its board will review Paramount's competing proposal, with a recommendation to be issued by December 19.
It is still backing the Netflix deal for now.
