Warner Bros. Sale to Paramount Over Netflix Won’t Save Movie Theaters

Is there a lesser of two evils?

That was the looming question for movie theater owners before Netflix bowed out of the bidding war for Warner Bros. and paved the way for Paramount Skydance to take over the media giant. There’s been fear that any merger — no matter which bidder prevailed — would bring the kind of consolidation that results in fewer new films on the big screen. It’s a major concern because the box office has yet to recover from the pandemic and Hollywood’s 2023 labor strikes, with domestic ticket sales down roughly 20% from pre-COVID times.

“It’s a case of pick your poison,” says an exhibition consultant. “The extended battle over which terrible deal would happen will result in fewer major studio releases.”

With the sale to Netflix, exhibitors were worried the streaming behemoth would take a sledgehammer to the theatrical window — the term for the amount of time a movie plays exclusively in cinemas. After all, Netflix’s CEO Ted Sarandos had spent the last decade repeatedly dismissing the moviegoing experience as an “outmoded idea.” However, some cinema operators were starting to (cautiously) warm to Netflix because Sarandos had pledged to not only continue releasing Warner Bros. films in theaters, but also to keep them on the big screen for 45 days. Despite Sarandos’ claims, rival studio executives and movie theater business veterans were skeptical about whether Netflix would make good on that promise over time.

“Netflix said all the right things,” says Chris Randleman, chief revenue officer at the Texas-based movie theater circuit Flix Brewhouse. “At the end of the day, we just want as many movies in theaters at a time.”

In the case of Paramount, CEO David Ellison has positioned the company as the anti-Netflix, a true champion of theatrical. More pointedly, Ellison has promised the joint media behemoth would release more than 30 films in cinemas a year. In theory, it’s the ideal way to execute a massive media merger without crippling the theatrical business in the process. Yet several Hollywood insiders are casting doubt on whether that type of volume is realistic. For context, in 2025 Universal had the largest output with 20 films (including titles from its indie division, Focus Features) in 2025, followed by Disney with 16 (counting those from 20th Century and Searchlight) and Sony with 13 releases. Meanwhile Warner Bros. unveiled 11 films and Paramount released nine in the same timeframe.

“Paramount hasn’t put out 15 movies in I don’t know how long,” notes an executive at a rival studio.

Paramount hasn’t revealed how it’ll operate the two film divisions, but the company is seeking up to $6 billion in cost savings by eliminating “duplicative operations” across the business, according to executives. In the theatrical space, that’ll likely mean the consolidation of marketing and distribution departments. With that in mind, analysts believe a bigger issue in committing to releasing 30 new films over 52 weeks is one of manpower. They think it’s unrealistic to task a studio’s marketing department with successfully promoting a movie every other weekend.

“Paramount isn’t going to be able to afford to release that many movies if they cut redundancies,” says the exhibition consultant. “It’s possible to put out 30 films, but you can’t do that with fewer people.”

Then there’s the question about the theatrical window. In December, Ellison maintained the company will honor “healthy traditional windows.” But analysts point out that Paramount already has “relatively short theatrical windows” compared to competitors in the distribution space. They don’t expect the windows to get longer given that Paramount’s president Jeff Shell had aggressively pushed to bring movies more quickly to the home while he served as CEO of NBCUniversal. During the pandemic, Shell was the architect of Universal’s controversial 17-day period between cinemas and premium video-on-demand platforms — a considerably shorter timeframe than the already abridged industry standard.

“Last year, Paramount’s exclusive theatrical windows was shorter than the other studios, except for Universal,” says David A. Gross, who runs the movie consulting firm Franchise Entertainment Research. He notes the studio’s 2025 films had been exclusively in theaters for approximately 31 days, adding that since Skydance acquired Paramount for $8 billion last August, “there has been no change in their release strategy.”

Another reason for skepticism about the promise to sustain such a large output of movies? Quality control. That’s because the bar for theatrical — meaning what’ll actually get patrons off their couch and into their local multiplex — has never been higher amid the rise in popularity of streaming.

“If any studio could release more than 15 wide releases per year — a little more than one per month — and be successful, they would,” Gross says. “In the course of one year, there aren’t more than 15 broad-appeal stories that a studio can develop, produce, market and distribute effectively around the world; 30 wide releases is extremely unrealistic.”

Cinema operators are still badly bruised from Disney’s 2019 purchase of 20th Century Fox — whose film library boasted franchises such as “Avatar,” “X-Men” and “Alien” — which left the business with one fewer major studio. Prior to the merger, Fox released 14 films in 2017, 14 in 2018 and 11 in 2019. Under the Disney banner, 20th Century Studios output shrank dramatically with three movies in 2023, four in 2024 and six in 2025. Despite Ellison’s comments about increasing production, exhibitors predict a similar decline if Paramount’s bid for Warner Bros. passes regulatory approval.

“A combination of Paramount and Warner Bros. would consolidate as much as 40% of each year’s domestic box office in the hands of single dominant studio,” Cinema United, the trade organization that represents the exhibitors, warned in early February for a Senate judiciary subcommittee hearing on anti-trust, competition policy and consumer rights. “The impact will not only be felt by theatre owners, but by movie fans and surrounding businesses in communities of all sizes.”

Although rival studio executives and cinema operators feel that neither deal is beneficial for the industry, some have expressed a sense of relief that Paramount won out since the company already has the necessary infrastructure to support the big screen.

“Given its history, Paramount has the edge because it’s always been doing theatrical,” Randleman says. “We want to see the creative community have strong support behind them. We need a strong theatrical industry ecosystem. Our hope is they live up to their word.”

But is it realistic to think that Paramount will be able to significantly ramp up its output by combining with Warner Bros. while also finding ways to cut costs and service the massive debt load? Ellison might be saying all the right things to theater owners, but history tells a different story.