Paramount Skydance Inc.’s top lawyer claims he is extremely concerned about Netflix’s potential to compete with the combined company of Paramount and Warner Bros., finding that the streaming company is doing everything it can to “poison regulators and other stakeholders” over the disputed $111 billion deal.
Netflix had a deal to buy Warner Bros.’ streaming and studio businesses in late 2025, but withdrew its bid in February after Paramount raised its offer to acquire all of WBD.
Makan Delrahim, Paramount’s chief legal officer, claimed that Netflix is heavily lobbying against Paramount’s proposed deal with Warner Bros. Discovery. In a June 5 letter to attorneys at the Justice Department’s Antitrust Division, Delrahim wrote, “Netflix’s panic-level response and scorched-earth campaign to poison regulators and other stakeholders in opposition to the transaction demonstrates how seriously Netflix takes Paramount as a large-scale competitor.”
Mr. Delahim was writing in response to a white paper from the International Brotherhood of Teamsters submitted to the Justice Department in March in which the union urged the agency to block the Paramount-WBD merger unless Paramount agreed to “substantive and enforceable safeguards” against job cuts and increased U.S. production.
Apparently, Netflix’s alleged “scorched earth” tactics here revolve around comparing the Paramount and WBD merger to Disney’s acquisition of 21st Century Fox assets in 2019, and warning that major studio mergers will lead to less content production and less competition in the industry.
“We understand that as part of a broader proxy war against the deal, Netflix sought to convince the Teamsters and other stakeholders that Disney’s acquisition of Fox had a negative impact on content production and labor opportunities,” Delahim wrote in the letter. “Frankly, Netflix’s ‘sky is falling’ narrative is far removed from the true reality of what actually happened.” Delahim’s letter, addressed to Justice Department antitrust attorneys Jared A. Hughes and A. Maya Khan, was first reported by Politico.
Reached for comment, a Netflix spokesperson told Variety: “These claims by Paramount Skydance are ridiculous. We exited this transaction several months ago and remain focused on our business, not theirs. Ultimately, it is up to regulators to approve this transaction and determine whether it is in the best interest of the industry and everyone involved.”
In announcing its filing with the Department of Justice this spring, the Teamsters said the proposed merger between Paramount and WBD poses a “direct threat to film and television workers across the country,” including nearly 15,000 film Teamsters.
In his letter, Delahim dismissed the Teamsters’ concerns as not based on fact. “Increased competition to produce more content across the entertainment industry will create more opportunities for organized labor beyond Paramount’s projects, so this agreement is a victory for the Teamsters and other unions,” Paramount’s lawyers wrote.
Delahim continued, “Paramount’s content strategy is directly aligned with the interests of the Teamsters. With more films and series in production, there will be more call sheets, more location days, and more transportation, casting and catering jobs. The combined company will have no incentive to scale back its competitive production engine. Increased production volumes will be core to how Paramount will compete.”
In his June 5 letter, Delahim reiterated earlier points about why Disney’s $71 billion deal with 21st Century Fox does not indicate what would happen if Paramount were to absorb Warner Bros. Due to the coronavirus pandemic, film releases across the industry have significantly decreased. And “Disney has clearly increased its spending on overall content production since acquiring Fox.” Delahim also reiterated CEO David Ellison’s promise that the combined company would release at least 30 films a year. And his letter reiterates the company’s argument that Paramount+ and HBO Max alone don’t have the scale to compete with larger subscription streaming players Netflix, Disney+, Hulu and Amazon’s Prime Video.
“There’s a lot of fear-mongering, especially from people in Washington, D.C., who are running political campaigns. Some of them are really trying to jeopardize this deal because of their own anti-Semitic views,” Delrahim said in an interview with the Los Angeles Times last week. Delahim did not identify opponents of the Paramount-WBD merger who allegedly hold “anti-Semitic views.”
Separately on Tuesday, Britain’s competition regulator, the Competition and Markets Authority, announced it had begun an investigation into the proposed Paramount-WBD deal. In the US, as Paramount awaits a formal green light from the Justice Department, state attorneys general, including California’s Rob Bonta, may move forward with a lawsuit seeking to block Paramount and WBD on antitrust grounds.
Paramount disclosed in an April FCC filing that 49.5% of the combined Paramount and WBD will be owned by foreign investors, and approximately 38.5% of the new company will be owned by sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi. Variety has confirmed that three Middle Eastern countries have pledged a total of $24 billion to Paramount’s purchase of Warner Bros.
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