Paramount Accuses Netflix of ‘Panic-Level’ ‘Scorched-Earth Campaign’ to ‘Poison’ Regulators Against Warner Bros. Deal
Paramount Skydance‘s top lawyer claims Netflix is so worried about the prospect of competing with a merged Paramount-Warner Bros. Discovery that the streaming company is going all-out to try to “poison regulators and other stakeholders” against the pending $111 billion deal.
Netflix clinched a deal to buy Warner Bros.’s streaming and studios businesses in late 2025 before backing out of the bidding in February after Paramount upped its takeout offer for all of WBD.
Makan Delrahim, Paramount’s chief legal officer, has alleged that Netflix is lobbying hard against Paramount’s proposed Warner Bros. Discovery deal. In a June 5 letter to lawyers in the DOJ’s Antitrust Division, Delrahim wrote that “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.”
Delrahim was writing in response to the International Brotherhood of Teamsters’ white paper submitted to the Justice Department in March, in which the union urged the agency to block the Paramount-WBD merger unless Paramount agreed to “substantial and enforceable safeguards” against job cuts and supporting increased U.S. production.
Apparently, Netflix’s alleged “scorched-earth” tactics here revolve around comparing the Paramount-WBD merger to Disney’s acquisition of 21st Century Fox assets in 2019 — and warning that big studio mergers lead to lower content output and reduced competition in the industry.
In his letter, Delrahim 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.” Delrahim’s letter, addressed to DOJ Antitrust attorneys Jared A. Hughes and A. Maya Khan, was first reported by Politico.
Asked for comment, a Netflix spokesperson told Variety: “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.”
The Teamsters, in announcing its filing with the DOJ this spring, said the proposed Paramount-WBD merger poses a “direct threat to film and television workers nationwide,” including nearly 15,000 Motion Picture Teamsters.
In the letter, Delrahim waved off the Teamster’s concerns as not grounded in facts. “Invigorated competition to produce more content across the entertainment industry will translate to more opportunities for organized labor beyond Paramount’s projects. In short, this deal is a win for the Teamsters and other labor unions,” the Paramount lawyer wrote.
Delrahim continued, “Paramount’s content strategy aligns directly with the Teamsters’ interests. More films and series in production means more call sheets, more location days, more transportation, casting, and catering work. The combined company will have no incentive to shrink the production engine that drives its competitiveness. Increasing production volume is the central pillar of how Paramount intends to compete.”
In the June 5 letter, Delrahim reiterated points he’s previously made about why Disney’s $71 billion 21st Century Fox deal is not indicative of what would happen if Paramount swallows Warner Bros. Among those: that Disney had reduced its theatrical output before it acquired Fox; that the COVID pandemic dramatically depressed film releases across the industry; and that “Disney has unequivocally increased its spending on producing content overall since acquiring Fox.” Delrahim also reiterated CEO David Ellison’s commitment that the merged company will release at least 30 films per year. And his letter repeated the company’s claims that Paramount+ and HBO Max on their own do not have the scale to compete against bigger subscription streaming players Netflix, Disney+ and Hulu, and Amazon’s Prime Video.
Last week Delrahim said in an interview with the Los Angeles Times that “There’s a lot of fear-mongering, particularly from people in Washington, D.C. They are running a political campaign. Some of these people are trying to inflict harm on this transaction really because of their own antisemitic views.” Delrahim has not identified which opponents of the Paramount-WBD merger allegedly hold “antisemitic views.”
Separately, on Tuesday, the U.K.’s competition regulator, the Competition and Markets Authority, said it initiated an investigation into the proposed Paramount-WBD deal. In the U.S., as Paramount awaits an official greenlight from the DOJ, state attorneys general including California’s Rob Bonta are potentially moving forward with litigation seeking to block Paramount-WBD on antitrust grounds.
Paramount disclosed in an FCC filing in April that the merged Paramount-WBD would be 49.5% owned by foreign investors, with about 38.5% of the equity in the new company owned by the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. Variety confirmed that the three Middle Eastern countries had pledged a total of $24 billion toward Paramount’s Warner Bros. bid.
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