Paramount accuses Netflix of ‘scorched-earth’ bid to sink Warner Bros merger

WASHINGTON, DC: Paramount Skydance has accused Netflix of running a behind-the-scenes campaign to derail its proposed merger with Warner Bros Discovery.

The allegation adds a new front to the merger fight. It also puts the deal’s central argument, creating a stronger competitor to Netflix, at the center of the approval battle.

Paramount claims Netflix fears stronger rival

According to a June 5 letter sent to the Department of Justice, Paramount chief legal officer Makan Delrahim alleged that Netflix has launched a “scorched-earth” effort against the transaction.

Delrahim claimed Netflix is attempting to “poison regulators” reviewing Paramount’s proposed acquisition of Warner Bros Discovery, according to Politico.

The letter argues that Netflix’s opposition reflects concern over the scale a combined Paramount-WBD company could achieve.

“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 states.

Netflix had previously competed with Paramount to acquire Warner Bros Discovery before dropping out after Paramount submitted a higher offer.

Paramount defends merger as competition play

The company’s defense of the deal centers on one argument repeated throughout the letter: that combining Paramount and WBD would create a larger competitor capable of challenging Netflix and other streaming giants.

“The Transaction’s positive impacts on organized labor flow naturally from the business logic that drives the underlying deal,” Delrahim wrote.

He added that Paramount wants to combine with WBD “to create a stronger, more efficient competitor that will operate at scale and take on Netflix and the other streaming giants”.

That claim has become increasingly important as the merger faces scrutiny from multiple directions while awaiting federal approval.

Teamsters and politicians oppose deal

Paramount is also facing opposition from the International Brotherhood of Teamsters, which has urged regulators to block the merger over concerns that consolidation could reduce work opportunities for union members.

Delrahim rejected that argument in the letter.

“Paramount acquiring WBD will not reduce work opportunities for the Teamsters or other organized labor,” he said.

He further argued that the merger would increase production activity and create additional jobs tied to film and television projects.

“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,” Delrahim wrote.

The labor dispute is only one challenge facing the proposal. The report notes that several politicians in Washington have opposed the merger, while California Attorney General Rob Bonita has also expressed skepticism about the transaction.

For now, the proposed merger remains under review, with Paramount publicly arguing that the deal would strengthen competition in streaming even as opponents continue pushing regulators to stop it.