Paramount Skydance has accused Netflix of spearheading a “scorched-earth campaign to try and poison regulators and other stakeholders” against its $110 billion purchase of rival Hollywood studio Warner Bros. Discovery.
In a fiery letter to the Justice Department obtained by NBC News, Paramount Skydance Chief Legal Officer Makan Delrahim excoriated Netflix for what he called a “panic-level response” to the merger that illustrates “just how seriously Netflix takes Paramount as a scaled competitor.”
Paramount’s letter was sent to the Justice Department on Friday and first reported by Politico.
In response to a request for comment, a Netflix spokesperson said that “these claims from Paramount Skydance are absurd.”
“We walked away from this deal months ago and remain focused on our own business, not theirs,” the spokesperson added. “Ultimately, it’s up to the regulators to approve this deal and determine if it is in the best interest of the industry and all concerned.”
In the bidding war for Warner Bros. Discovery, Paramount Skydance triumphed over Netflix in late February. WBD shareholders approved the tie-up in late April.
Trump administration regulators are still reviewing the merger, which would unite two historic Hollywood studios and popular streaming platforms under the same corporate roof, reshaping the American entertainment industry.
The Justice Department did not immediately respond to a request for comment Tuesday.
The water tower at Warner Bros. Studios in Burbank, Calif.Mario Tama / Getty Images file
Delrahim’s letter came in direct response to a March report sent to the Justice Department by the International Brotherhood of Teamsters, a labor union whose members, including drivers, work on film and television sets.
The Teamsters argued that Paramount’s acquisition of WBD “poses a direct threat” to workers. The union called on the Justice Department to block the deal unless “substantial and enforceable safeguards are put in place to increase domestic production and protect jobs.”
Delrahim’s letter flatly rejects that argument, with the legal executive writing that “organized labor will directly benefit from the new competitive energy and increased content investment that the combined firm will bring to the entertainment industry.”
The Teamsters did not immediately respond to a request for comment Tuesday.
Paramount’s letter accuses Netflix of launching a “broader proxy war” that includes trying to “persuade the Teamsters and other stakeholders that Disney’s acquisition of Fox had a negative impact on content production and labor opportunities.”
“Frankly,” Delrahim added, “Netflix’s ‘sky is falling’ narrative departs significantly from the ground-truth reality of what actually happened.”
The Walt Disney Co. took over 21st Century Fox’s entertainment assets in a $71.3 billion deal that closed in 2019.
Delrahim forcefully pushed back on the Teamsters’ contention that Disney’s takeover of the Fox assets hurt workers, writing in part that the Mouse House “unequivocally increased its spending on producing content overall since acquiring Fox.”
“Respectfully,” Delrahim wrote, “we do not understand why Netflix and its proxies are still pushing the Disney-Fox merger as a cautionary tale for studio combinations.”
The Teamsters is not the only group that has raised concerns about the Paramount-Warner transaction. In recent months, hundreds of A-list Hollywood actors, producers and directors have advocated against the deal.
“This transaction would further consolidate an already concentrated media landscape, reducing competition at a moment when our industries — and the audiences we serve — can least afford it,” more than 1,000 entertainment professionals said in an open letter published in April.
The prospective merger is also facing scrutiny from California Attorney General Rob Bonta, whose office is investigating the deal, and the United Kingdom’s antitrust authority, which formally announced a probe Tuesday.
Paramount Skydance CEO David Ellison has vowed to “honor the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company.” He has also publicly vowed to release at least 30 feature films a year in movie theaters.
Delrahim became Paramount Skydance’s chief legal officer last fall. He was previously the U.S. assistant attorney general for the Antitrust Division during President Donald Trump’s first term in the White House.
