Paramount Skydance and Netflix Clash Over Warner Bros. Discovery Merger

Paramount Skydance has accused Netflix of leading a “scorched-earth campaign” to undermine its $110 billion acquisition of Warner Bros. Discovery. The accusation was made public through a letter from Paramount Skydance’s chief legal officer, Makan Delrahim, to the Justice Department. In the letter, Delrahim criticized Netflix’s response to the merger, suggesting it reflects the seriousness with which Netflix views Paramount as a competitor.

No comment was immediately available from Netflix on Tuesday. Paramount’s letter to the Justice Department was sent on Friday and initially reported by Politico. Paramount Skydance and Netflix both pursued acquiring Warner Bros. Discovery, the parent company of HBO and CNN. David Ellison, who owns Paramount Skydance, succeeded in the bidding war in February, with WBD shareholders approving the deal in April.

Regulators from the Trump administration are still reviewing the merger, which could unite two long-established Hollywood studios and streaming platforms, significantly altering the U.S. entertainment industry. The Justice Department did not issue an immediate comment on Tuesday.

The reaction from Delrahim followed a report from the International Brotherhood of Teamsters to the Justice Department in March. The labor union represents workers like drivers on film and TV sets and argued that Paramount’s acquisition posed a threat to workers. They urged the Justice Department to halt the merger unless safeguards were established to boost domestic production and protect jobs.

Delrahim countered this argument, asserting that organized labor would benefit from the increased competition and content investment that the merger promises. Attempts to reach the Teamsters for comment were unsuccessful as of Tuesday.

The letter from Paramount claims that Netflix is waging a “broader proxy war,” attempting to influence stakeholders to view Disney’s acquisition of Fox as harmful to content production and labor opportunities. Delrahim argued that Netflix’s viewpoint diverges considerably from reality.

Disney acquired 21st Century Fox’s entertainment assets in a $71.3 billion deal completed in 2019. Delrahim contested claims of negative worker impact from Disney’s takeover, highlighting that Disney has increased its content spending following the Fox acquisition.

Paramount’s stance questions why Netflix and its allies continue to point to the Disney-Fox merger as a negative precedent for studio mergers. Concerns about the Paramount-WBD transaction extend beyond labor unions. Some Hollywood actors, producers, and directors have voiced opposition to the deal, citing reduced industry competition.

The merger also faces investigations by California Attorney General Rob Bonta and the United Kingdom’s antitrust authority. David Ellison has pledged to honor the legacy of the two companies and aims to transform them into a next-generation media and entertainment entity, planning to release at least 30 films annually in theaters.

Delrahim joined Paramount Skydance last fall, having previously held the position of U.S. Assistant Attorney General for the Antitrust Division under President Donald Trump.