Paramount has gone on the offensive, leveling accusations at Netflix for allegedly lobbying against the proposed Warner Bros. Discovery deal while regulators are still reviewing it. Paramount Chief Legal Officer Makan Delrahim put the accusation in writing in a June 5 letter to the Department of Justice Antitrust Division.
Netflix denied the allegation outright and said it had walked away from the process months ago. Regulatory reviews in the United States, the United Kingdom, and the European Union are still ongoing.
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Netflix Under Scrutiny
Makan Delrahim authored the June 5 letter, obtained by Deadline, that was sent to the DOJ Antitrust Division. “As Paramount pushes forward with its ‘content-first’ growth strategy, firms like Netflix, Amazon, MGM, Disney, Universal, Sony, Lionsgate, A24, Apple, and many others will need to respond in kind, presumably by enhancing their own content creation strategies.“
“Indeed, Netflix’s panic-level response and scorched-earth campaign to try and poison regulators and other stakeholders against the Transaction shows just how seriously Netflix takes Paramount as a scaled competitor.” The letter did not identify specific actions allegedly taken by Netflix.
Netflix Response
Netflix disputed Paramount’s characterization in a statement provided to Deadline. A company spokesperson said, “These claims from Paramount Skydance are absurd. We walked away from this deal months ago and remain focused on our own business, not theirs.“
“Ultimately, it’s up to the regulators to approve this deal and determine if it is in the best interest of the industry and all concerned.“
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Warner Process
Warner Bros. Discovery previously had an agreement to sell its studio and streaming operations to Netflix, while Paramount also pursued the assets. The Warner board ultimately selected the offer backed by David Ellison.
Netflix exited the process with a $2.8 billion breakup fee after the Warner Bros. board chose the competing proposal.
Regulatory Review
The June 5 letter was a direct response to a White Paper the Teamsters submitted to the DOJ in March, which raised concerns about the transaction. A regulatory review is still underway. The United Kingdom has opened a Phase 1 inquiry with an August 7 deadline unless regulators require a deeper review.
The European Union’s initial deadline is July 7, although that timetable may be extended. The transaction is also awaiting approval from the DOJ, and reports indicate Paramount is willing to agree to remedies if required.
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Competition Argument
Delrahim argued that the transaction is necessary to foster stronger competition in the entertainment business. He wrote, “Netflix, Amazon, and Disney dominate subscription streaming today.“
“Paramount and WBD lag far behind the streaming giants, even on a combined basis. For Paramount and WBD to compete, they need to pursue a transformative transaction like this one and invest aggressively in capturing audiences’ attention by driving fresh, engaging content across the ecosystem of theatrical releases, streaming, and linear television.“
Paramount’s Labor Case
A substantial section of the letter addressed concerns raised by labor groups. Delrahim argued that the transaction would create additional production activity and employment opportunities.
He also pushed back against concerns about reduced spending and job losses while stating that the deal would create “more opportunities for organized labor beyond Paramount’s projects.” Delrahim summed up Paramount’s argument in a single line, writing, “In short, this deal is a win for the Teamsters and other labor unions.“
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The Disney-Fox Debate
Delrahim also rejected comparisons between the current transaction and Disney’s acquisition of Fox. He wrote, “We understand that as part of its broader proxy war against the Transaction, Netflix has tried to persuade the Teamsters and other stakeholders that Disney’s acquisition of Fox had a negative impact on content production and labor opportunities.“
“Frankly, Netflix’s ‘sky is falling’ narrative departs significantly from the ground-truth reality of what actually happened.“
Content Plans
Paramount stated that it has targeted at least $6 billion in savings from the transaction while projecting higher content spending after completion.
Delrahim wrote that cost synergies would come from categories “that do not touch production labor or union/guild positions,” including technology infrastructure, finance, legal, human resources, corporate communications, real estate optimization, and coordinated advertising and cross-promotion efforts.
Paramount also committed to releasing at least 30 theatrical films each year after the acquisition, with at least 15 titles from each studio and a minimum 45-day theatrical window.
