It involves banging home to investors the immense amount of regulatory uncertainty involved in the Netflix deal and how that could spell trouble not just for the transaction but for Netflix itself, say sources close to the talks.

Plan A, of course, was trying to convince WBD CEO David Zaslav and his board led by Samuel DiPiazza that its $30-a-share, all-cash offer for the entire company was superior to Netflix’s $27.75 cash-and-stock deal for the Warner Bros. studio and HBO Max streaming service.

David Ellison, CEO of Paramount Skydance, exits the New York Stock Exchange last month. REUTERS

The Netflix deal, they note, now looks especially troubled when you consider that it’s promising shareholders what looks like an increasingly far-fetched $3 a share when WBD sells its cable properties CNN, TNT and Discovery, in the spring.

Plan B involved Paramount — run by David Ellison, his father, the Oracle co-founder Larry Ellison, and Gerry Cardinale of RedBird Capital — launching a hostile bid to convince WBD shareholders to take their money (all cash) and run.

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So far unsuccessful, which is why next came “Plan C” as first reported by The Post, or their “Defcon 1” strategy of possibly suing WBD to show WBD skewing the bidding process to an allegedly inferior Netflix bid because of the friendship between CEO Ted Sarandos and Zas.

No one likes litigation, and that’s why we now have “Plan D,” which I am told is simply playing the long game, remaining in the background saying, “I told ya so,” when the numbers behind the Netflix deal begin to evaporate and the reality sets in that Netflix faces a long, tough road at best for approval from the Trump administration.

Plus, and here’s the kicker: Netflix’s entire business model might come under scrutiny if it goes through with this deal.

Consider: The Ellisons and Cardinale are arguing that the value of the stock portion of the Netflix deal keeps losing value and may never recover.

From its one year high in June, Netflix has lost $160 billion in market cap as the bidding war dragged on. Investors are obviously a little concerned about Sarandos and founder Reed Hastings buying something they don’t really need and might not be able to afford given the $60 billion of debt involved in their offer.

Paramount Skydance has now initiated what insiders are calling “Plan D” as they look to upend Netflix’s “winning” bid for Warner Bros. Discovery. REUTERS

They’re also hyping worries that WBD cable spinoff will be virtually worthless as investors weigh its own huge levels of debt on top of the cord cutting that will eat away at viewership.

The way the Paramount Skydance people put it, WBD has placed so much debt on the balance sheet of its cable spinoff ($15 billion) they could barely (if lucky) hand investors $1 a share on top of the $27.75

Meanwhile, if WBD and Netflix take some of that debt off the cable properties and hand it to the studio and streaming units that Netflix is buying, well, that would wreak havoc on the metrics of its $27.75 cash-stock offer.

But wait, there’s more

Yes, it’s all very complicated, which is why Mario Gabelli, the famed value investor and WBD shareholder, told me Netflix’s deal needs to be simplified because “cash is king,” which is also why he likes what the Ellisons and RedBird bring to the table.

Then comes the regulatory morass, which was recently made even clearer following a conversation I had with a senior Trump administration official.

Netflix and WBD would be combining the No. 1 and No. 3 streaming services, as we all know.

It faces scrutiny from the Trump administration and likely a lawsuit to stop it.

It’s a long, expensive and uncertain process where the value of the asset and shareholders’ payout could wither.

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But consider what this might mean for Netflix: not just the deal being throttled, but its entire business model could face a review by DOJ antitrust or any number of regulatory agencies, I am told.

As the senior Trump administration official put it, the streaming giant has long been on the radar of Trump’s various regulators for its market dominance in a business that has become a preferred choice of viewing programming for many if not most consumers.

This could push the scrutiny to a new level, along the lines of the litigation faced by Amazon or Google.

“Yeah, this deal will get reviewed, but now there is increased chatter in DC regulatory and competition officials about looking at Netflix potential monopoly status,” the regulator said.

“When you get on the DC regulatory spotlight that’s what happens.”

A Netflix press rep has never returned my telephone calls for comment and didn’t this time, either.

Of course, from what I understand, WBD really wants a “Plan E,” which would be the Ellisons and Cardinale paying more money.

It could happen, of course, because the Ellisons and RedBird have the means.

They also really want WBD as a way to build a midsized media company into a major player.

Still, the very fact that they are talking about a “Plan D,” means they might not do any more sweetening, possibly walk away and leave this deal to wolves of regulation.

That would be the worst-case scenario for shareholders.

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The high-level meeting that took place about 10 days ago hasn’t been previously reported. Several White House officials also suggested during the sitdown that a broader investigation is necessary focusing on Netflix’s market power, a government official who attended the confab said.  

“Basically everyone agreed that Netflix presents unique antitrust concerns and if it won the bidding war it would be one long slog and touch off an investigation along the lines of those of Google and Amazon,” the government official said. 

Netflix’s interest in acquiring Warner Bros. Discovery has raised antitrust concerns at the White House, sources told The Post. Getty Images

“Netflix already has market dominance but if you add a major streaming service that would stifle competition at some point,” the official added.

White House and Netflix press reps had no immediate comment.

The meeting comes as the Warner Bros. Discovery board has scheduled a Monday afternoon deadline to receive a second round of offers for the company. WBD controls the No. 1-ranked Warner Bros. studio and the No 3 streaming service, HBO Max, as well as a slew of cable channels including HBO and CNN.

Paramount Skydance, controlled by Hollywood producer David Ellison and his father, billionaire Oracle co-founder Larry Ellison, is expected to raise its initial bid, which in mid-October came in at $23.50 a share for the entire company.

Cable giant Comcast, run by Brian Roberts, is also expected to sweeten a more recent offer, although it has been given low odds of making it through the Trump regulatory gauntlet because of the president’s disdain for Comcast’s relentlessly anti-MAGA cable channel MSNBC, recently renamed MS NOW. 

Warner Bros. Discovery’s board has scheduled a Monday afternoon deadline to receive a second round of offers for the company. SOPA Images/LightRocket via Getty Images

Meanwhile, Netflix is also expected to make a sweetened bid for WBD’s studio and streaming service – and faces a different but equally difficult set of hurdles getting regulatory approval, Trump officials said during the meeting.

The 28-year-old company created by Reed Hastings and led by its voluble CEO Ted Sarandos is currently the world’s largest streaming service with 300 million subscribers. White House officials at the meeting suggested its size could hamper competition in streaming where Americans increasingly consume their entertainment as cord cutting continues to shrink the cable TV business. They also raised the likelihood of European regulatory push back, the government official said.

Sarandos as well as a slew of company legal officials and lobbyists have been pressing the flesh in DC. As previously reported by The Post, they’ve been pleading a case that an acquisition of the No. 3 streamer and a major studio wouldn’t violate antitrust laws because of a legal theory known as “category ambiguity.”

Netflix chief Ted Sarandos and company legal officials and lobbyists have been pleading the case in Washington, DC that a deal for No. 3 streamer HBO Max and a major studio wouldn’t violate antitrust laws. Alan West/Hogan Media/Shutterstock

According to the theory, antitrust law doesn’t necessarily apply to streaming services because of the prevalence of content that’s available on YouTube, TikTok and other social media. The idea is that streaming video is now so ubiquitous that it can’t be cornered and price gauged in the traditional sense.

But the pitch, while winning converts with members of the WBD board and some quarters of the DC regulatory framework, is now being met with significant skepticism from senior White House officials who advise Trump on media policy, according to a government official who attended the meeting last week. 

Trump officials also voiced concern that Netflix is already wielding enormous power in the Hollywood ecosystem, not just with consumers but also when dealing with program creators and talent. A recurring theme of Trump’s regulatory agenda during his first term and today has been anti-competitive business models of media and tech concentration, the source noted. 

Paramount Skydance, controlled by Hollywood producer David Ellison, above, and his father, billionaire Oracle co-founder Larry Ellison, is expected to raise its initial bid of $23.50 a share for all of Warner Bros. Discovery. Evan Agostini/Invision/AP

If Netflix’s bid won out, the scale and scope of the deal to buy HBO Max and the studio should lead to a lengthy, possibly yearslong probe by the DOJ’s antitrust division run by Trump appointee Gale Slater. The probe could expand beyond the merits of its WBD deal to its entire operations, “something that the company has avoided until now,” the government official who attended said.  

The meeting follows a letter by GOP California congressman Darrell Issa to Slater and her boss US AG Pam Bondi warning that “Netflix currently wields unequaled market power. Adding both HBO Max’s subscribers and Warner Bros.’ premier content rights would further enhance this position.”

But Sarandos may feel he has no choice but to make a run at WBD, and eventually fight off Trump’s regulatory cops in federal court if they nix his bid.

“If Paramount owns all its content plus Warner and HBO they will have control of a massive and quality library, and put Netflix behind the eight-ball in terms of negotiating for WBD content on its streaming service,” a media industry insider told The Post.

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Netflix spent over $275 million to make “The Electric State,” a sci-fi action adventure film starring Millie Bobby Brown, Chris Pratt and a slew of sentient robots. Had it opened in theaters, instead of on its service as it did on March 14, the film would almost certainly be declared a giant disappointment.

Reviews have been dismal. And though the movie debuted at No. 1 on the streaming giant’s weekly chart of most-watched movies, it had far fewer views (25.2 million) than other expensive features, including “The Gray Man” (41.2 million), which was made by the same directors, the brothers Joe and Anthony Russo.

But there was little hand-wringing inside Netflix this week. No marketing chief was blamed. No production executive packed up her office.

Instead, the movie demonstrates how different Netflix is from the traditional studios — and how easily the company can spend so much for a middling result without Wall Street’s noticing. (Its stock is up slightly this week.)

Truth is, no one piece of content moves the needle at Netflix in either direction. “Squid Game 2” was the most-watched title in the company’s most recent engagement report, with 87 million views, but it accounted for only 0.7 percent of total viewing. Rather, the $18 billion that the company spends each year on movies and shows is meant to reach a worldwide audience with different tastes and interests. The budget for “The Electric State” represents 1.5 percent of what the company will spend on content this year.

“It’s comical to me that Hollywood and the press obsess over Netflix’s mistakes while they have one of the most viral global hits in ‘Adolescence’ right now at a nothing budget,” said Richard Greenfield, a media analyst with Lightshed Partners. He was referring to a distressing — and zeitgeisty — four-part series about a teenage boy accused of murder that has generated 24.3 million views.

“It’s all about a portfolio approach to content,” Mr. Greenfield added.

Both Netflix and the Russo brothers declined to comment for this article.

Supposedly, quality is now king at Netflix. “With more than 700 million people watching, we can’t just be one thing. We need to be the best version of everything,” Bela Bajaria, Netflix’s chief content officer, said at an event in January showcasing the company’s 2025 lineup.

And more recently, she said that she’d greenlight “The Electric State” all over again. (Among reviewers, the film has a 15 percent positive rating on Rotten Tomatoes. Among the public, it has a 73 percent positive rating.)

Netflix acquired “The Electric State” in 2022 after Universal balked at the reported $200 million price tag. Those costs ballooned in part because of the amount of special effects involved and the extensive upfront bonuses paid to the film’s stars and directors.

That kind of spending on a big-budget, little-known piece of intellectual property may be more rare in Netflix’s future. The company’s new film chief, Dan Lin, is cutting costs where he can, though still spending lavishly on highly coveted projects. He plunked down a healthy chunk for Greta Gerwig’s upcoming “Narnia” and tried to land Emerald Fennell’s adaptation of “Wuthering Heights” by offering $150 million. (He lost out to Warner Bros., which offered to give the film, starring Margot Robbie, a wide theatrical release.)

Netflix is still doing plenty of business with the Russo brothers, too. Over the years, the pair have given the company some of its biggest hits, including “Gray Man” and the “Extraction” franchise. The Russos’ production company, AGBO, is set to begin filming “The Whisper Man,” a crime thriller starring Robert De Niro, Adam Scott and Michelle Monaghan, this year, and an “Extraction” television series is also in the works. (They are also responsible for Disney’s high-grossing “Avengers” films and are lined up to direct the next two.)

“The Electric State” hit the streaming service just as Hollywood seems to be undergoing an identity crisis. Moviegoers say they want original ideas. But the public keeps rejecting them. Last week, two original stories — “Novocaine,” starring Jack Quaid, and “Black Bag,” starring Cate Blanchett and Michael Fassbender — headlined the slowest moviegoing weekend of 2025.

Even franchise fare like “Captain America: Brave New World” and “Paddington in Peru” isn’t matching the grosses of its predecessors. Hollywood was hopeful that 2025 would be the year the box office would come roaring back to its prepandemic levels, but so far it’s trailing 2024 by 5 percent and 2019 by 38 percent.

Peter Newman, a film producer and professor at New York University’s Tisch School of the Arts, said “The Electric State” and Netflix’s approach to content relied more on analytics than overall taste, a factor that contributed to the disparity between the critics’ reviews and the audience reception of the movie.

“One could make the case that they have dumbed down the audience to such an extent that that’s what they want,” Mr. Newman said. “Maybe they want McDonald’s instead of Peter Luger.”

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