Episode II: the dinosaurs strike back
Posted on: 9 December 2025
Three days ago I published a post titled "The apprentice didn't surpass the master, he bought the school". It told a century of content industry history as a thriller with a surprise ending: Netflix acquiring Warner Bros. for $82.7 billion. The disruptor buying the legacy. The total inversion of the value chain. The black swan.
I concluded with a note of humility: even those who spend their lives recognising patterns occasionally get caught off guard.
I had no idea how prophetic that sentence would prove.
On Monday 8 December, while the post was still circulating, Paramount launched a hostile bid of $108.4 billion to snatch Warner from Netflix's grasp. Not a polite counter-proposal. A frontal assault, directly to shareholders, bypassing management entirely.
The film wasn't over. It had become a series, and we were only watching the first episode.
The plot twist nobody saw coming... again
Let's put the facts in order, because the speed of events is dizzying.
Friday 5 December: Netflix announces the acquisition of Warner Bros., including HBO, HBO Max, DC Comics and the entire catalogue, for $82.7 billion. The market applauds. Analysts speak of "a new chapter for Hollywood". I write a post about the apprentice's victory in buying the school.
Monday 8 December: Paramount launches a hostile bid of $108.4 billion, all cash, for the entire Warner Bros. Discovery, including the television networks Netflix didn't want. David Ellison, CEO of Paramount and son of Larry Ellison (founder of Oracle, the world's second richest man with $277 billion in net worth), announces: "We're here to finish what we started".
The difference between the two offers is substantial. Netflix was offering $27.75 per share, of which $23.25 in cash and $4.50 in Netflix stock. Paramount is offering $30 per share, all cash. That's $18 billion more, without the risk tied to Netflix share volatility.
But the real difference isn't in the numbers. It's in the nature of the operation.
Follow the money and you'll find the Gulf
A $108 billion bid doesn't materialise from thin air. Paramount, until yesterday, was the most financially troubled major of them all. How can it launch an offer like this?
The answer lies in the documents filed with the SEC, and it tells a story that goes well beyond Hollywood.
The bid is backed by:
- The Ellison family and RedBird Capital for $40.7 billion in equity
- $54 billion in debt from Bank of America, Citi and Apollo Global Management
- $24 billion from the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi
- Affinity Partners, the fund of Jared Kushner, son-in-law of President Trump
Read that last point again. The investment fund of the President of the United States' son-in-law is among the financiers of a hostile bid for one of the largest American media conglomerates.
David Ellison was at the Kennedy Center with Trump on the evening of 7 December, hours before the announcement. Larry Ellison, his father, has documented ties to the Trump administration. And Trump himself, when asked about the matter, said the Netflix deal "could be a problem" for antitrust reasons.
We're no longer talking about streaming wars. We're talking about the geopolitics of content.
The pattern of dancing dinosaurs
There's a recurring pattern in industries in structural decline: when two weak companies merge, they don't create a strong company. They create a bigger dinosaur that sinks more slowly.
Paramount plus Warner Bros. Discovery would be exactly this. Two loss-making streaming services (Paramount+ and Max) to unify. Two catalogues of cable networks in terminal decline (CNN, TNT, TBS, MTV, Nickelodeon) to "rationalise". Two mountains of debt to add together.
David Ellison presents it as "the creation of a true competitor for Netflix and Amazon". The more cynical analysts see it as an attempt to build something "too big to fail", in the hope that size alone will guarantee survival.
The problem is that size didn't save AOL-Time Warner. It didn't save AT&T-Time Warner. It won't save Paramount-Warner.
But perhaps salvation isn't the objective.
The real game: who controls the American narrative?
Let's pause for a moment to look at who the real players in this game are.
On one side, Netflix. A Californian technology company, built on disruption, led by managers who've spent twenty years learning the content business. When Netflix buys Warner, it's buying competence it already possesses. It's classic vertical integration: the distributor acquiring the supplier to control the entire chain.
On the other side, a consortium that includes the world's second richest man (Larry Ellison), three Persian Gulf sovereign wealth funds, the President of the United States' son-in-law, and a film major used as a vehicle. When this consortium buys Warner, what exactly is it buying?
CNN. HBO. DC Comics. Harry Potter. The Warner Bros. catalogue. News, premium entertainment, superheroes, magic. In other words: a significant slice of the Western collective imagination.
I don't want to slip into conspiracy thinking. Gulf sovereign funds invest in everything, from football clubs to Manhattan skyscrapers. Jared Kushner runs a legitimate investment fund. Larry Ellison is an entrepreneur seeking returns.
But when the White House has public opinions on which company should buy which film studio, we're in new territory. When funds linked to foreign governments finance the acquisition of American narrative machines, the questions are legitimate.
Content, as I wrote in the previous post, is patient. But it's also powerful. Whoever controls it, controls the stories we tell ourselves about ourselves.
The most likely scenario: prolonged chaos
Let's try to trace the possible trajectories.
Scenario A: Netflix wins. Warner shareholders reject the Paramount offer, the Netflix deal proceeds, regulators approve after 12-18 months of scrutiny. Netflix becomes the undisputed colossus of global streaming with 400+ million potential subscribers and a catalogue ranging from Stranger Things to Harry Potter. Paramount is left alone, weakened, probably destined to be acquired by someone else.
Scenario B: Paramount wins. Warner shareholders accept the $30 cash, the board is bypassed, the Netflix deal collapses (with $5.8 billion in breakup fees paid to Warner). A giant traditional media conglomerate is born, laden with debt, facing the impossible challenge of integrating two corporate cultures, two streaming platforms, two distribution networks. Netflix loses the battle but remains dominant in its territory.
Scenario C: prolonged chaos. This is the most likely scenario. Months of legal battles. Antitrust investigations into both deals. Lobbying in Washington. Political pressures. Uncertainty for employees, talent, partners. Creative paralysis while managers are engaged in war rooms instead of making films and series.
And while the dinosaurs tear each other apart for the throne, who benefits?
Netflix, paradoxically. Even if it loses Warner, its competitors will spend the next two years fighting each other instead of competing with it.
Amazon. Which has already bought MGM and can afford to wait.
Apple. Which has the deepest pockets of all and is in no hurry.
The real winners of the dinosaur war are those who don't participate in the war.
The lesson for systems observers
I return to the starting point: patterns.
The previous post identified a secular pattern (content changing owners until it finds someone who understands it) and a black swan (the disruptor buying the legacy). It was a correct analysis, but incomplete.
The deeper pattern, which I hadn't seen, is this: when an asset becomes valuable enough, it attracts players who don't belong to the original system.
For a century, Hollywood has been bought and sold by industrial conglomerates, telcos, investment funds. All economic actors with economic logic. Even Netflix, however disruptive, is an economic actor with economic logic.
But when sovereign funds enter the picture, along with direct political connections to the White House, and the implicit question "who controls the stories America tells itself", we're in different territory.
It's no longer just business. It's power.
And power, unlike business, doesn't follow predictable patterns. Power creates its own patterns.
How does the film end?
I don't know.
It's the second time in a week I've admitted not knowing, and I'm beginning to think this is the real lesson.
Those who analyse systems for a living develop a certain epistemic arrogance. You see enough patterns, and you start believing that all future events are variations of past events. AOL-Time Warner failed, therefore Paramount-Warner will fail. Netflix won the streaming war, therefore Netflix will win this battle.
But every so often the system produces something genuinely new. A configuration of forces with no exact precedents. A moment when too many powerful players want the same thing for different reasons, and the outcome is unpredictable.
This is one of those moments.
Content is still king. But the court has become much more crowded, and some of the new courtiers are playing by rules we don't yet know.
Stay tuned. Episode III will arrive, whether we want it or not.
Note for those who read the previous post
If three days ago I told you a story with an ending, I apologise. It wasn't the ending. It was merely the moment when the credits seemed ready to roll, before someone switched on the lights in the cinema and announced: "There's a post-credits scene. Actually, there's another episode".
Keep following. Reality is writing a better script than any screenwriter could.