Paramount Asserts WBD-Netflix Deal Unlikely to Succeed

Paramount Pictures has expressed strong concerns regarding the potential sale of Warner Bros. Discovery (WBD) and its implications. The company has made it clear that it will not passively accept any outcomes if either Netflix or Comcast emerges as the winning bidder.

Paramount’s Legal Stance

In a letter addressed to WBD, Paramount’s legal team argues that it is the only contender with a feasible path to closing the deal, citing established legal precedents. The statement emphasizes that the proposals from Netflix and Comcast could encounter significant regulatory hurdles.

Concerns Over Rivals

Paramount highlighted that both Netflix and Comcast raise serious antitrust issues that could impede the sale. The letter indicated that if WBD chooses a buyer other than Paramount, it may consider legal action or a hostile takeover.

• Netflix: Might face scrutiny due to its current dominance in the streaming market.
• Comcast: Possesses significant broadband and cable television assets, equally raising antitrust concerns.

Antitrust Implications

Paramount’s correspondence revealed that a deal with Netflix is especially precarious, stating, “The simple truth is that a deal with Netflix as the buyer likely will never close.” The letter included data highlighting Netflix’s leading position in the streaming industry, which could be exacerbated by acquiring HBO Max.

Potential Market Impact

The letter emphasized that a Netflix acquisition would likely diminish the number of films available for theatrical release. This shift could further drive consumers away from cinemas, impacting theaters that are already facing challenges.

Paramount’s Position

Paramount argues that its merger with WBD would foster a stronger competitor in the streaming landscape. The company asserts that their combined market share does not approach regulatory thresholds that would raise concerns of illegality.

Furthermore, Paramount positions itself as the more responsible choice for WBD shareholders, suggesting that its bid offers a faster and more reliable means of unlocking value compared to its rivals.

Bidding Developments

According to reports, WBD is currently in its third round of bidding, with a decision on a buyer anticipated by the end of the year. Paramount is interested in acquiring all of Warner Bros., including its global linear networks, while Netflix and Comcast are primarily targeting the Warner Bros. Studios and HBO Max.

This dynamic situation continues to evolve as regulatory scrutiny over large-scale consolidations in the media industry remains a pressing concern.