Paramount Skydance’s Accusations Against Netflix

Paramount Skydance has levied accusations against Netflix, claiming the streamer is leading a disruptive campaign. Netflix tries to sway regulators and stakeholders against Paramount’s acquisition of Warner Bros. Discovery, valued at $110 billion.

Paramount Skydance’s Response

Makan Delrahim, Paramount Skydance’s chief legal officer, expressed strong criticism in a letter to the Justice Department. Delrahim described Netflix’s actions regarding the merger as a ‘panic-level response,’ showcasing Netflix’s concern about Paramount as a competitor. Netflix has not commented on these allegations.

The letter, sent to the Justice Department last Friday, was initially reported by Politico. Paramount Skydance and Netflix were both contenders to acquire Warner Bros. Discovery, the parent company of HBO and CNN. Paramount Skydance, owned by David Ellison, emerged victorious in February. Shareholders approved the merger in April.

Review and Concerns

The merger remains under review by regulators from the Trump administration. The acquisition combines two prominent Hollywood studios and popular streaming platforms, potentially altering the American entertainment industry.

The International Brotherhood of Teamsters sent a report to the Justice Department in March, voicing concerns. The Teamsters argued that the acquisition threatens workers and urged the Justice Department to block the deal unless safeguards are enacted to enhance domestic production and secure jobs.

Delrahim countered these claims, asserting that organized labor will benefit from the increased competition and content investment.

Netflix’s Alleged Actions

Paramount’s letter accuses Netflix of spearheading a ‘broader proxy war.’ Netflix allegedly aims to convince stakeholders that Disney’s acquisition of Fox negatively influenced content production and labor opportunities. Delrahim challenges this narrative, indicating that Disney’s acquisition increased overall content production spending.

Concerns from Industry Professionals

Beyond the Teamsters, numerous Hollywood actors, producers, and directors have voiced opposition to the deal. Over 1,000 entertainment professionals expressed concerns in an open letter. They believe the merger would consolidate the media landscape, reducing competition at a time when it is least affordable.

Ongoing Scrutiny

The deal faces scrutiny from California Attorney General Rob Bonta, who is investigating the merger. The UK’s antitrust authority has also initiated a probe. David Ellison reaffirmed his dedication to preserving the legacy of two iconic companies while establishing a modern media and entertainment entity. He aims to release at least 30 feature films annually in theaters.

Delrahim, previously the U.S. Assistant Attorney General for the Antitrust Division during Trump’s administration, became Paramount Skydance’s chief legal officer last fall.