Warning: SPOILERS for Cobra Kai Season 4.
Terry Silver (Thomas Ian Griffith) won at the end of Cobra Kai season 4, which sets up season 5 as Daniel LaRusso's (Ralph Macchio) worst nightmare come true. By the time Cobra Kai season 4's climactic All Valley Under 18 Karate Tournament was over, Silver and John Kreese's (Martin Kove) dojo was triumphant with the overall Grand Championship and boasted the first-ever girls' All Valley Champion in Tory Nichols (Peyton List). Despite their best effort, Daniel, Johnny Lawrence (William Zabka), and the students of Miyagi-Do and Eagle Fang Karate couldn't put an end to Cobra Kai, which means LaRusso has to go war with Terry Silver in Cobra Kai season 5.
When Terry Silver made his presence known to Daniel by invading Miyagi-Do midway in Cobra Kai season 4, LaRusso justifiably panicked and he sabotaged his alliance with Johnny. In LaRusso's defense, however, none of the foes Daniel-san faced in The Karate Kid movies made his life as miserable as Silver did in The Karate Kid Part III. By Terry's own admission in Cobra Kai season 4, the acts he perpetrated to torture the teenage LaRusso back in 1985 were "insane." Silver hired "Karate's Bad Boy," Mike Barnes (Sean Kanan), to fight Daniel at the All Valley Tournament and he sicced Barnes and his henchman on "Danny-Boy" to force him to compete against Mr. Miyagi's (Noriyuki "Pat" Morita) wishes. Meanwhile, Terry posed as a friend to Daniel and got him to break ties with Mr. Miyagi to join Cobra Kai, where he physically tortured LaRusso. At the All Valley, Silver instructed Barnes to purposely injure Daniel with illegal tactics before LaRusso upset the Cobra Kai's hired gun to win the tournament.
When Cobra Kai season 5 arrives, it will answer the question of what would have happened if Terry Silver won in The Karate Kid Part III. As Cobra Kai season 4 makes clear, Daniel foiling Terry's plot back in 1985 only postponed the inevitable for 34 years. When Silver returned to lead Cobra Kai, he gradually revealed his greater scheme, which included betraying Kreese, his oldest friend from Vietnam, to install himself as Cobra Kai's sole sensei. Now basking in his ultimate victory, the incredibly wealthy and diabolical Terry Silver is a greater threat to the San Fernando Valley than Kreese was and Silver's next steps guarantee Daniel will be in for a living hell in Cobra Kai season 5.
Terry Silver's Cobra Kai Dojos Are Taking Over The Valley
Before Daniel ruined his plans in The Karate Kid Part III, Terry Silver announced to the audience at the All Valley that he planned to open dozens of Cobra Kai dojos to take over karate in the San Fernando Valley. It's no surprise that when Tory's win secured the All Valley Grand Championship for his dojo in Cobra Kai season 4, Silver made the same Karate Kid Part III proclamation of expanding Cobra Kai's domination. Terry already made his move by closing down the dojo location that Kreese took over from Johnny and moving the main Cobra Kai dojo back to its original building in the Valley - which is the same place Terry physically abused Daniel to make his knuckles bleed in 1985. Silver could even bring back Mike Barnes to help him run Cobra Kai.
Daniel broke the original terms he, Johnny, and Kreese agreed to that the loser of the All Valley would shut down his dojo. While LaRusso is right that Silver "has no honor," Daniel realizes he is now facing an immediate future where the small group of his Miyagi-Do and Johnny's Eagle Fang students will soon be surrounded by dozens of Cobra Kai trained by Terry Silver. Cobra Kai season 4 saw a general cease-and-desist of karate violence while the students were training to fight in the All Valley, but Silver's Cobra Kai expansion means the floodgates will open. Soon, Samantha LaRusso (Mary Mouser), Eli "Hawk" Moskowitz (Jacob Bertrand), Demetri Alexopoulos (Gianni DeCenzo), and the others will again be fighting for their lives on the streets against the Cobra Kai.
Daniel Can No Longer Be Defensive Despite Miyagi's Teaching
Daniel relied on his lifelong experience that adhering to Mr. Miyagi's teachings would result in victory but both he and Sam were stunned and heartbroken when Tory beat the younger LaRusso so that Cobra Kai won the All Valley. While no one but Tory is aware that Terry Silver bribed the referee when Cobra Kai season 4 ended, the fact that Daniel failed shattered him. He had no answers for Sam when she cried, "We did everything right and we still lost." But the conclusion Daniel came to is that he can no longer depend on fighting defensively the way Mr. Miyagi would have wanted him to, which is why LaRusso asked his "karate cousin," Chozen Toguchi (Yuji Okumoto) to come to Los Angeles and help him go on the offense against Cobra Kai.
In The Karate Kid Part II, Daniel and Chozen fought to the death they buried the hatchet in Cobra Kai season 3. In Chozen, Daniel has a fellow Miyagi-Do sensei who has a different philosophy and knows secrets about Miyagi karate that Mr. Miyagi never told Daniel. But going on the offense is unfamiliar ground for LaRusso and trusting Chozen is a risk since Daniel doesn't really know him well. Plus fighting Chozen's way will pull Daniel further and further from what he knows. Daniel-san also worries about whether going to war with Cobra Kai will dishonor Mr. Miyagi's memory. The Karate Kid movies show that each time Daniel "loses focus" ends in disaster and this time, there is no Mr. Miyagi to pull LaRusso back from the brink.
Fighting Terry Silver May Be The End of LaRusso
Going to war with Terry Silver and Cobra Kai could also pose an existential threat to the LaRusso family. Daniel is rightfully proud of his successful family business, LaRusso Auto Group, which he runs with his wife, Amanda (Courtney Henggeler). But Silver is far richer than LaRusso and if the Cobra Kai sensei wanted to, he could attack Daniel's business and even buy out the car dealership, which would threaten the LaRusso family financially. In Cobra Kai season 3, Daniel traveled to Okinawa to save his company but Silver, who may still run his family's company, DynaTox, may decide to control the top car dealership in the Valley as well as dominate the teenage karate game.
Terry Silver proved he was willing to beat Stingray (Paul Walter Hauser) so severely, the oafish Cobra Kai wannabe needed hospitalization in order to frame Kreese and have him arrested for the attack. Someone that ruthless would certainly attempt a hostile takeover of LaRusso Auto Group if he felt like it, and Silver wouldn't sweat taking away "Danny-Boy" and Amanda's financial well-being. John Kreese was an enemy who was only focused on karate but the danger Terry Silver poses goes far beyond a karate dojo war. Whatever form his war with Terry Silver takes in Cobra Kai season 5, win or lose, Daniel LaRusso will indeed be living his worst nightmare from The Karate Kid Part III.
Cobra Kai Season 4 is streaming on Netflix.