TBPN Sep 21, 2026 23m 11m saved
With Lucas Shaw, entertainment reporter at Bloomberg
The states that sued to block Paramount's purchase of Warner Bros. Discovery wanted structural change, which in practice meant a forced sale. They did not get one.
The settlement is being read as a compromise. Lucas Shaw's reading is that it is close to a clean win: the conditions Paramount accepted are mostly things David Ellison had already said he would do, and no asset is leaving the company.
"And there is nothing being sold."
Shaw covers entertainment for Bloomberg and has been reporting on the Ellison–Paramount story for a year and on the people in it for considerably longer, which is why the hosts said they generally wait for him to write something before forming a view.
The full interview is covered here so you can skip it. 23 minutes of audio, 12 minutes of reading.
Here are the 7 arguments that matter.
Key Takeaways
The settlement is a win for David Ellison, who mostly agreed to things he had already committed to publicly 30 theatrical releases a year, of which only 20 have to be wide releases
No divestiture, which is the outcome the attorneys general and the Writers Guild had been pushing for
Hollywood's correction started around 2022 and never fully reversed, and the deal means thousands more job cuts
This is the highest-grossing year since 2019, and ticket sales are still down a lot — the grosses are stronger partly because tickets cost more
Netflix is paying creators millions to post to both platforms at once, which is what set YouTube off
YouTube's response was explicitly punitive — cut your reach if you post elsewhere, restore it if you come back
Apple wins awards and not audiences, and Shaw doubts it will follow Amazon's route to the mainstream
Every streaming service is now looking at creators, podcasts and vertical dramas, because subscriber growth has slowed
1. The Settlement's Winner
Shaw spent the weekend at a relative's wedding in Rhode Island while colleagues covered the story, and said the prevailing feeling among reporters who had followed it for a year was relief that it is over.
His read on the outcome
Well, the settlement looks for the most part, like a big win for David Ellison, right?
Lucas Shaw
The alternative was months of uncertainty with a trial that would not have started until next year. What he agreed to instead, Shaw said, is largely a restatement of his own plans.
The commitments are things he had already announced
And instead, he mostly agrees to do things he's already said he was going to do, release 30 movies a year in theaters, only 20 of them have to be wide releases.
Lucas Shaw
There is a version of this where the conditions still matter, he allowed, because a buyer can say one thing before a deal and do another afterwards. What is missing is the remedy the plaintiffs actually asked for.
Nobody on the other side got the structural change they wanted
But it doesn't seem like Rob Bonta of the Attorney General of California or any of the attorneys general who are involved in the suit or the Writers Guild got some big win where they can say, they were calling for structural changes, which would have meant selling something. And there is nothing being sold.
Lucas Shaw
2. A Decade Without Recovery
Asked whether this is genuine cause for optimism in Los Angeles — the hosts said the people they meet do not sound optimistic — Shaw declined to call it a turning point.
Television was a cash business for a very long time
And really, look, the TV business was a cash machine for decades.
Lucas Shaw
Then came the streaming build-out, which started around Netflix and House of Cards and produced what he called an unprecedented explosion of production, particularly in television.
The correction started around 2022 and has not reversed
And then around 22, 23, there has been this kind of correction or right-sizing and from which the industry has never fully recovered.
Lucas Shaw
Most people working in Hollywood do not feel good about it, he said, and nobody thinks this deal is the fix.
The immediate consequence is job losses
They're looking at what will likely be thousands in job cuts and the combination of two of the original kind of six Hollywood studios.
Lucas Shaw
The counterargument he hears from others is that Ellison finally builds something large enough to compete with Netflix, Amazon and Disney. Shaw's response was to list how many times this promise has been made.
Warner has been sold repeatedly, on the same promise each time
Warner Brothers has traded hands a lot over the last decade. It got bought by AT&T. Then it got bought by Discovery. Now it's getting bought by David Ellison.
Lucas Shaw
Everyone who bought it said they would be the one to turn HBO into a real streaming competitor, he said, and none of them has. Ellison may be different.
3. Best Box Office Since 2019
A host laid out the case for a good year: three breakout crossover films from YouTube creators, two billion-dollar releases, a new Toy Story, a new Super Mario film, and a tech-heavy back half including a Theranos documentary and films about OpenAI and Facebook.
Shaw's answer split the headline from the underlying trend.
The top line is the best since before the pandemic
Top line, it's the highest grossing year since before the pandemic, since 2019. You have the second most billion-dollar movies ever.
Lucas Shaw
And the volume figure disagrees with it
I think where people counter that is that if you look just in terms of ticket sales, ticket sales are still down a lot. The reason that grosses are stronger is in part because going to the movies is just more expensive.
Lucas Shaw
Which points at the real problem
And so we've entered a phase where movie going as a habit is just not what it used to be.
Lucas Shaw
A host supplied the historical comparison, saying the average American in the 1940s and 1950s bought something like ten or twenty tickets a month, when the alternatives were books and cards. Shaw agreed that the Friday-night habit survived into more recent memory and does not exist now.
The same host then made the case for what replaced it.
A film now has to beat everything else at once
A movie is competing with TikTok, it's competing with YouTube, it's competing with live sports, it's competing with concerts, it's competing with, anything and everything.
TBPN
It has to be loud enough to make leaving the house feel necessary, he said, and the business is still built around people who used to turn up on a Friday without deciding first. Shaw's own reading is that people in the movie business feel better than they have since theaters closed, and that the question they all ask is whether it holds.
4. Netflix Pays for Creators
The hosts moved to a post Shaw had published that morning about a creator trying to rework a Netflix deal over concerns about their YouTube channel.
The two have been converging for years
They're the two leaders in streaming video for most of their existence. They were competitive, but operating in different lanes, right? Netflix was Hollywood programming, professional film and TV, YouTube was UGC, and just shorter-form videos.
Lucas Shaw
What Netflix is doing now, to hold attention and stay relevant with viewers under 25 and under 20, is signing YouTube talent. The old version of that was packaging existing videos into Netflix compilations. The new version is different.
Simultaneous posting, paid for on top of YouTube's own money
It's post your new videos to Netflix and YouTube at the same time. We will pay you millions of dollars on top of what you already get from YouTube, and we're happy to talk about whether we should work on some kind of original programming.
Lucas Shaw
And that is the part that provoked YouTube
I think Netflix's trying to get people to post sync at the same time on both places just irritated them.
Lucas Shaw
5. YouTube Goes Mask Off
Shaw's characterization of YouTube's response was the sharpest thing in the segment.
The creator-first positioning has a condition attached
And like, we're here to just empower creators. And it's like, we're here to empower creators that maintain our monopoly on human attention.
Lucas Shaw
And the enforcement is explicit
If you do this, we're going to kill your reach. We will punish you. And by the way, if you go back and work with us, we will reward you. It is very Machiavellian.
Lucas Shaw
What he found instructive when he first reported it was how differently the two sides read the same behavior: YouTube thought it was being reasonable and doing what any business would do, and Netflix could not believe what YouTube was doing. Part of that, he said, is the reputation YouTube has cultivated, when creators are ultimately a means to its own bottom line.
A host's objection was on behalf of creators: someone who made a video owns it, ought to be able to post it anywhere, and is now told their reach will be cut for doing so. Shaw's answer separated the interests.
Misaligned with creators, and good for creators anyway
Better for YouTube shareholders, though. They may be misaligned, but I would actually say that this competition for creators, at least in the short term, is a net positive because there are multiple people.
Lucas Shaw
For a long time YouTube was effectively the only buyer. Now there are several, and the mechanics run in the creator's favor.
A stick on one side raises the carrot on the other
That might be the state, because right now, if YouTube is that stick, then Netflix has to increase the amount of carrots to say, hey, yeah, you are going to get crushed, but we're going to double what we were going to pay you.
Lucas Shaw
Disney, Fox and other legacy companies are trying to get into the same market, he said, and the precedent is podcasting, where a bidding war for talent produced very large paydays.
A host pushed a specific idea: rather than spending a million dollars on one production, Netflix could back twenty emerging creators who have nothing to lose, and act as a curation layer against low-effort AI-scripted video. Shaw was skeptical of the fit.
Netflix does not think it can win at the long tail
But Netflix's strength has been, yes, that really high production value type of programming. And YouTube strength has more been the long tail being a place that you can go for anything and everything.
Lucas Shaw
He did say it would be interesting to watch them try.
The experiment he would run
But it would be interesting, certainly, to see them, go to 20, 30 creators they like and say, here's $50,000 to make whatever you want.
Lucas Shaw
6. Apple's Prestige Corner
Asked where Apple sits, Shaw said it is deliberately not in the fight.
The service arrived as the company that would outspend everyone and wanted a famous name in everything. What it has built since is a critical reputation.
It just won more Emmys than any other streaming service
They just won the most Emmys of any streaming service, of any company.
Lucas Shaw
And the criticism is the obvious one
The knock that most people have on Apple is just their shows aren't very popular.
Lucas Shaw
Narrow, but the right kind of narrow
They do really well with a particular type of viewer.
Lucas Shaw
A host's framing was that Apple jumped straight to being an HBO competitor rather than a Netflix competitor, and noted estimated ratings for some shows in the tens of thousands of viewers — the scale of a small podcast. Shaw's point was that Apple may not mind: awards and talent relationships serve the brand.
The strategic argument it lets Apple make
Well, that's been the 4D chess argument in tech is that it gives them something to talk about that's not just app store rents
Lucas Shaw
Another host doubted that Apple would follow Amazon's path, which started as an HBO competitor and then went mainstream with Reacher. Trying to be CBS, he said, does not fit the brand.
7. What He Is Watching Next
On the next big story, Shaw named three.
The first is execution: what Ellison actually does. Combining two companies means firing a lot of people and choosing between two high-profile streaming executives, one at each company.
The second is Netflix itself
Setting that aside, a lot of people are wondering what is going on at Netflix. I think they've had a pretty rocky year.
Lucas Shaw
Since walking away from Warner Bros. Discovery, he said, there have been questions about its next act and persistent rumors about leadership changes.
The third is the split now underway at NBCUniversal's parent, separating the cable business from entertainment — which is exactly what Warner Bros. Discovery had planned before it was bought. The open question is whether that is the first move toward combining NBCUniversal with something else.
And the one that is not yet a Hollywood story
AI is a much bigger conversation, I'd say, in the music business than in Hollywood right now. But it's lurking, obviously, as it is in all sectors of society.
Lucas Shaw
Bonus Insights
Vertical dramas are on every buyer's list
Look, all these services, because streaming isn't growing as fast as it once was, they're all looking at ways to bring in more people. So they're all looking at YouTube creators. They're all looking at podcasts. They're all looking at vertical dramas.
Lucas Shaw
He described the genre as mostly adult-oriented romance, with horror and true crime alongside it, and said Peacock has already added some. Anything people are paying attention to gets integrated if a sensible way can be found.
Warner's sale was predictable from its chief executive's behavior
Asked whether the outcome was readable in advance, Shaw said the plan to split the company was what its chief executive wanted, because it kept him at the center of Hollywood.
He wasn't the mayor, but he liked being a big shot in Hollywood, right?
Lucas Shaw
That, he said, is part of why the board initially told Ellison he was not valuing the company highly enough. Ellison kept coming back, with family resources behind him, through resistance on both this deal and the earlier Paramount purchase.
A federal film tax credit is being pushed before the next Congress
A host raised the effort to pass a credit for shooting in the United States, which would pull production back from Europe and Canada, and noted that the next Avengers film is going to the UK.
The hosts' own indicator for a Hollywood recovery
One host said finding studio space in Hollywood had been far too easy, and that being pushed out of theirs would be the bullish signal.
Shaw's bottom line is that the Paramount settlement changes who owns Warner Bros. Discovery and very little else, while the fight that is actually reshaping the economics of video is the one between YouTube and Netflix over who gets to distribute a creator's work.
Products, Companies & Tools Mentioned
Paramount and Warner Bros. Discovery (The settled deal: no divestiture, 30 theatrical releases a year, an independent journalism board for CNN and CBS News)
Netflix (Paying YouTube creators millions to post simultaneously, and, in Shaw's view, having a rocky year since walking away from Warner Bros. Discovery)
YouTube (Cutting reach for creators who post to Netflix and restoring it for those who come back — "very Machiavellian")
Apple TV (Most Emmys of any streaming service, and shows Shaw says are not very popular)
Amazon (The comparison Apple is not following: started as an HBO competitor, went mainstream with Reacher)
Disney and Fox (Legacy companies now competing for the same creator talent)
Peacock (The service Shaw says has already added vertical dramas)
HBO Max (The streaming service every Warner owner has promised to turn into a real competitor)
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