Paramount has expressed significant dissatisfaction regarding Warner Bros. Discovery’s (WBD) sales process, particularly if either Netflix or Comcast emerges as the winning bidder. The company is adamant about making its grievances public and has made it clear that it will not accept the situation quietly.
In a detailed letter sent from its legal representation to WBD, Paramount asserts that it is the only prospective buyer with a “clear path to closing based upon decades of legal precedent.” This correspondence, which accompanied Paramount’s latest bid submission on Monday—when bids for the second round were due—argues that rival offers from Netflix and Comcast pose “serious issues that no regulator will be able to ignore.” Additionally, a separate communication was sent from Paramount on Wednesday denouncing what it claims is an unfair sale process.
These letters hint at potential legal actions or a hostile takeover strategy if WBD chooses a buyer other than Paramount, according to industry observers. Paramount’s counsel emphasizes that both Netflix’s dominance in the streaming space and Comcast’s status as a significant broadband and multi-video programming distributor raise substantial antitrust concerns that could complicate and elongate the bidding process for WBD.
The communication, particularly focused on Netflix, claims, “The simple truth is that a deal with Netflix as the buyer likely will never close.” It points out that Netflix is uniquely positioned as the only major tech corporation yet to face serious global antitrust scrutiny. The letter asserts that attempting to acquire WBD’s assets would undoubtedly attract regulatory attention.
Supporting its arguments, Paramount included various statistical data and charts illustrating Netflix’s significant market position in streaming, both in the U.S. and internationally, which would be significantly amplified through acquiring HBO Max. It critiques Netflix’s attempts to broaden its market definition to encompass social media and short-form video platforms, labeling such strategies as “doomed to fail” with regulators. The letter highlights a presentation of these arguments to WBD’s team just last weekend.
Moreover, Paramount contends that a potential Netflix-Warner Bros. merger would further diminish the number of films available for widespread theatrical release, exacerbating existing challenges for theaters already struggling to attract audiences. While Netflix has reportedly claimed it would honor WBD’s theatrical commitments, Paramount has dismissed these assurances as “inherently time-limited, transactional and defensive,” aimed at mitigating anticipated regulatory concerns.
Paramount argues that its proposal offers WBD a “clear path to closing” without triggering antitrust investigations. It insists that there’s no market segment where the combined shares of Paramount and WBD would approach the critical 30 percent threshold that would automatically provoke scrutiny from regulators. Instead, such a merger would create a more formidable competitor against Netflix, encouraging opportunities for creators and talent alike.
Meanwhile, reports indicate that WBD has requested third-round bids due shortly, with the situation evolving. WBD aims to finalize a deal for all or part of the company by the end of the year, with Paramount vying for full ownership, including global linear networks. Meanwhile, Netflix and Comcast are potentially targeting Warner Bros. Studios and HBO Max.
On the matter of Comcast, Paramount raised additional antitrust concerns regarding its role as a significant broadband and multi-video programming distributor. The letter emphasizes that the regulatory landscape has evolved, suggesting that the hurdles Comcast previously faced during its acquisition of NBCUniversal—entailing lengthy and complex consent decrees—would not be applicable in the current political climate.
In summary, the bidding war for WBD is escalating, with Paramount positioning itself as the most viable option in terms of regulatory implications while remaining highly critical of its competitors.
