Netflix trying to “poison regulators” about WBD merger, Paramount lawyer claims

Netflix's response: "Absurd."

See full article...

 

[SixDegrees]

Bad news for both of them, and really all streamers. I've cancelled all my streaming subscriptions in favor of a handful of 1-month subs to catch up on the very few shows I actually want to watch on any of them. Seems like a month per year per service covers that pretty well. And I know several other people adopting that practice, too.

Streaming subs, at best, are completely saturated, and can only swap customers back and forth without any overall growth, at least in the US. More likely is an actual decline, especially as prices continue to rise while services provide stagnate or fall.

 

[goblinski]

“...Let’s be honest. There’s a lot of fear-mongering..."

Let's be honest - Never has History seen a honest sentence that started with Let's be honest.

 

[Alyeska]

Netflix didn't convince me the merger was bad. CBS did when they bent the knee to The Felon in Chief. I was cautiously OK with Netflix acquiring WB, but I flat oppose Paramount acquisition.

 

[KrookedRooster]

See, I'm not concerned about a dearth of movies and production happening which is what Paramount is all about. (And if you are saving money in production, why is streaming going up then?)

I'm concerned about the dearth of jobs that will happen because of the merger. Which you are openly saying will happen. Unless you are in a union apparently.

That is until somebody with enough lobby money changes the laws and that narrative for them.

Numbers must go up! Bodycount must go down!

 

[OldPhartReef]

Wait, help me understand this ... Paramount is whining to the gov't about Netflix bad-mouthing them? How is this the government's problem? Oh wait ... this is 2026 ... they expect that their patronage of the Orange Buffoon will bring financial gain. Duh. Stupid me.

What an awful timeline.

 

[Tactical Finesse]

Let's be honest - Never has History seen a honest sentence that started with Let's be honest.

If 2024 proved anything...it is that a large share of humanity is extremely fond of profoundly self-flattering lies. Honesty, can stay at the door.

 

[Wolfe Boy]

I am still flummoxed that WBD isn't profitable all on its own, and NEEDS to be owned by some huge mega-conglomerate.

 

[Fred Duck]

Bodycount must go down!

Sounds good to me.

body count
noun
a list or total of casualties

Spoiler

head count
noun
a total number of people, especially the number of people employed in a particular organization: you may decide that by reducing your head count you can reach this quarter's goals.

 

[Tactical Finesse]

I am still flummoxed that WBD isn't profitable all on its own, and NEEDS to be owned by some huge mega-conglomerate.

IIRC, WBD at this point is just the legacy TV media. You know: Ancient Aliens, Deadliest Catch, and the like. Costs a lot to produce--and is a meme at this point.

 

[msadesign]

This is going to cost us way more money then we thought and it's all Netflix's fault.

"Donald? Donald? Can you hear me, Donald?"

 

[mikeschr]

I am still flummoxed that WBD isn't profitable all on its own, and NEEDS to be owned by some huge mega-conglomerate.

For the Warner Bros. part, it seems to have been the case since the '60s. Not sure why.

 

[lithven]

I think we need to really reassess the laws around mergers. The question shouldn't be "will this merger lead to harm?" with the assumption that it won't. The question should be "what is the benefit of this merger and can a similar benefit be made through other means (such as an IP license agreement)?" The assumption should also be that any merger will lead to job losses since duplicating things like advertising, human resources, and all other "support" functions doesn't make sense within a single company and thus the company proposing a merger should need to defend itself from that adversarial point of view. If the acquiring company claims they'll make more movies, the question should be "why can't you make more movies now either using their own IP or through co-production with the target company?" There should be an order of preference with merger being the last, worst case, option below everything else such as a customer-supplier relationship, licensing IP, collaboration on a project, forming a third party partnership entity, and even making the merger target a wholly owned but independently managed subsidiary.

Further, any promises made should be enforceable even decades after the fact, e.g. if they promise not to close a studio or not to limit distribution then they should be held to that promise for a significant amount of time.

 

[F12]

Nobody but them wants this merger.

 

[Hunter13]

Are we not saturated with kiss up delusion senile conspiracy theory “news” sites? Seems a bad business move.

 

[mpat]

I don’t know if Netflix is doing any of the things Paramount is claiming, but it wouldn’t surprise me if someone wasn’t working to delay this merger. The conditions of the merger include a ticking fee from Paramount to WBD shareholders if the deal doesn’t close by the end of Q3. Fee is $650M per quarter. Any delay is a big payday for WBD shareholders, and Paramount can’t sustain that ticking fee for too long.

 

[Bash]

This is going to cost us way more money then we thought and it's all Netflix's fault.

With $79B in debt there's a reasonable chance that something big is going bankrupt. Sounds like a net positive to me -- especially if it can take a bit of the Ellison fortune with it. I suppose this is probably just wishful thinking on my part.

 

[galahad05]

This won't cost me a fucking dime.

In case it's escaped your notice, subscribing to any streaming service is voluntary. No gun to your head. No threatening phone calls. No ransom demands for your kidnapped family. It's a CHOICE.

If you're going to lose money, it's a choice you made to do so. They had nothing to do with it, since compulsory subscriptions to streaming services is not a thing (at least, not yet).

I do understand your SENTIMENT, but it does fly in the face of reality that you don't HAVE to have a streaming sub to have media or entertainment. It may cost you some money, but what you get outside of a subscription is yours to keep. You can watch it any time, and anywhere you want to with the right equipment.

These are how choices work. Don't even start believing that their price increases are going to cost you money, unless you put yourself into the equation as the one deciding to give them that money the same way you have all along. If you cancel a sub from one service and sub to another every month or two, you spend about the same amount, and get access to a far, far, far wider array of offerings. Choices are good.

It's all in how you apply them,

"cost us" meaning, Ellison.

 

[Ildatch]

The scummiest people have weaponized "antisemitism!!!!" as a thought-terminating cliché to shut down dissent, and it's sickening.

 

[TranslateDoggie]

Delrahim, in an interview with the Los Angeles Times earlier this month, also accused people of campaigning against the Paramount-WBD merger and blamed antisemitism without further explanation.

“Let’s be honest. There’s a lot of fear-mongering, particularly from people in Washington, D.C. They are running a political campaign. Some of these people are trying to inflict harm on this transaction really because of their own antisemitic views. Regulators and law enforcement officials will see right through that,” he said.

...How on earth does skepticism toward media consolidation constitute antisemitism? Is he saying that wealth-hoarding and open political corruption are inherently Jewish traits? Because they're extremely not (as the last twenty years should have taught us). Stop being gross and antisemitic, Mr. Delrahim.

 

[Thad Boyd]

Netflix didn't convince me the merger was bad. CBS did when they bent the knee to The Felon in Chief. I was cautiously OK with Netflix acquiring WB, but I flat oppose Paramount acquisition.

I mean, Paramount is especially bad and Netflix wouldn't be as bad, but...did you just not notice how things worked out the last 3 or 4 times WB got bought out?

 

[bobo bobo]

I appreciate the irony of Paramount, whose owner is David Ellison, who received buckets of money from Daddy, Larry Ellison, of accusing others of scorched earth policies. Larry Ellison, founder of Oracle, is infamous for creating and avidly pursuing an atmosphere of taking down any and all competitors using any and all means. So Paramount's $s come from scorched earth...but, hey! if whining about someone else doing more-or-less what Daddy did gets you bonus points, why not be a whiny little hypocrite?

 

[Honeybog]

The letter from Delrahim, a former assistant attorney general for the Antitrust Division

Who needs wolves to guard the hen house when the farmer’s dog has a six-figure job lined up at Tyson?

 

[Thad Boyd]

Nobody but them wants this merger.

Unfortunately, "them" includes the regulators who can approve it.

 

[House of Propane]

I think we need to really reassess the laws around mergers. The question shouldn't be "will this merger lead to harm?" with the assumption that it won't. The question should be "what is the benefit of this merger and can a similar benefit be made through other means (such as an IP license agreement)?" The assumption should also be that any merger will lead to job losses since duplicating things like advertising, human resources, and all other "support" functions doesn't make sense within a single company and thus the company proposing a merger should need to defend itself from that adversarial point of view. If the acquiring company claims they'll make more movies, the question should be "why can't you make more movies now either using their own IP or through co-production with the target company?" There should be an order of preference with merger being the last, worst case, option below everything else such as a customer-supplier relationship, licensing IP, collaboration on a project, forming a third party partnership entity, and even making the merger target a wholly owned but independently managed subsidiary.

Further, any promises made should be enforceable even decades after the fact, e.g. if they promise not to close a studio or not to limit distribution then they should be held to that promise for a significant amount of time.

Licensing out/selling your core IP is subject to essentially the same M+A review mechanisms and then you are right back where you started.

Maybe you are even worse off as everyone immediately seeks private equity money to form licensing companies and snap up IP in pure-play special purpose vehicles.

 

[Tactical Finesse]

I think we need to really reassess the laws around mergers. The question shouldn't be "will this merger lead to harm?" with the assumption that it won't. The question should be "what is the benefit of this merger and can a similar benefit be made through other means (such as an IP license agreement)?" The assumption should also be that any merger will lead to job losses since duplicating things like advertising, human resources, and all other "support" functions doesn't make sense within a single company and thus the company proposing a merger should need to defend itself from that adversarial point of view. If the acquiring company claims they'll make more movies, the question should be "why can't you make more movies now either using their own IP or through co-production with the target company?" There should be an order of preference with merger being the last, worst case, option below everything else such as a customer-supplier relationship, licensing IP, collaboration on a project, forming a third party partnership entity, and even making the merger target a wholly owned but independently managed subsidiary.

Further, any promises made should be enforceable even decades after the fact, e.g. if they promise not to close a studio or not to limit distribution then they should be held to that promise for a significant amount of time.

Well and it gets tricky because...what happens when businesses have a desirable product--that isn't economically viable for the market? Warner Bros isn't the best example of this...because entertainment like they produce isn't necessary. If the merger isn't allowed and they collapse...it sucks for the employees (a lot), and the management walks away with Golden Parachutes (also sucks)....but there's no structural damage to the economy.

A better example, that is even more controversial? Airline mergers.

Fundamentally consumer economy-class airline service isn't sustainable. It relies on infinite and cheap fossil fuels. And municipal and state and federal governments are paying massive subsidies (bribes) to get private airlines to keep servicing their areas....and if a carrier goes bust--it is a major problem as in the USA the only ways to travel are cars or planes that are both dependent on infinite cheap fossil fuels.

 

[Feniks]

All mergers lead to job losses that's kind of the point.

 

[akamat]

Paramount’s letter pointed to an increase in content production after Paramount merged with Skydance in 2025. Since then, Paramount has either purchased or renewed 20 shows

So, searching about their output before & post merger:
Paramount - 8 releases
Skydance - 6-12 releases, another 15 direct to streaming.

Merged company - At least 15 releases (as per search), 0 direct to streaming. From above quote, 20 shows, some of them renewed.

David Ellison has said that post-merger, Paramount would release at least 30 feature films annually

Guess what is annual output of WBD? Between 12-14 films. Oh, and also had 4 streaming releases in 2024, so that is few but non-zero.

So the combination of both, already used to earlier make 27-29 films (and streaming releases). A future projection of 30 films is good & realistic, but not really an 'increase in content'.

 

[UndyingShadow]

“Anti-semitism” DRINK!

Seriously, what does Judaism have to do with any of this?

 

[rm0659]

when in doubt, play the antisemitism card.

 

[idspispopd]

Well and it gets tricky because...what happens when businesses have a desirable product--that isn't economically viable for the market? Warner Bros isn't the best example of this...because entertainment like they produce isn't necessary. If the merger isn't allowed and they collapse...it sucks for the employees (a lot), and the management walks away with Golden Parachutes (also sucks)....but there's no structural damage to the economy.

A better example, that is even more controversial? Airline mergers.

Fundamentally consumer economy-class airline service isn't sustainable. It relies on infinite and cheap fossil fuels. And municipal and state and federal governments are paying massive subsidies (bribes) to get private airlines to keep servicing their areas....and if a carrier goes bust--it is a major problem as in the USA the only ways to travel are cars or planes that are both dependent on infinite cheap fossil fuels.

I don't see how mergers help those situations. If something is not economically viable for a market, there is a fundamental problem which needs to be addressed.

Allowing mergers (or subsidies, or any other schemes) just makes the problem worse because it allows the companies to play games around how they are selling, and prolong addressing the fundamental problem.
It also allows companies to play a game of chicken with the government by merging until they are "too big to fail" as a way of forcing government welfare instead of addressing the fundamental issues.

I really cannot think of any scenario where having a large conglomerate of companies in a failing market is better than having a competitive ecosystem with a lot of smaller companies. Both will encounter problems from the underlying issue, but it is far more manageable with unmerged companies.

In your airline example, the fundamental problem is the price needs to go up to cover fuel costs. With an ecosystem of small companies there will be competition to keep the increase passed to consumers to a minimum, with a single merged company they will raise prices how they see fit.
Even in the scenario where the government want to subsidize routes to ensure service to certain areas. Multiple companies competing to get traffic on a subsidized route will have a much better result. A single large company, as we have seen countless times, will just pocket the subsidy and do the bare minimum because the lack of competition lets them get away with it.

 

[MysteryMii215]

Paramount is really scared of two things at this point:

1. A bunch of states led by California are looking more likely to file their own lawsuit to stop the merger soon, especially if the DOJ ends up giving the go-ahead with little-to-no conditions.

2. They really don’t want to pay the ticking fee of 25¢ per WBD share for every quarter that passes without the deal closing if the deal doesn’t close by the end of September.

They’re pretty much trying to get the deal closed ASAP to avoid either of those scenarios from either derailing the entire deal, or forcing them to have to pay significantly more than they had originally planned to (in fact, recent reports have indicated that the higher-ups want the deal to close by mid-July instead of by the end of September as they’ve publicly stated, which seems very optimistic on their end), and they basically see the growing opposition to the deal as causing the likelihood of those two scenarios happening to keep increasing. Hence why they’re trying to paint the opposition to the deal as being part of a conspiracy against them.

 

[Mrbonk]

With $79B in debt there's a reasonable chance that something big is going bankrupt. Sounds like a net positive to me -- especially if it can take a bit of the Ellison fortune with it. I suppose this is probably just wishful thinking on my part.

Oh you know they will get cashed out and it won't take a single dime from their pocket. In fact they will probably handsomely profit. Unlike literally everyone else

 

[whobeme]

... but...did you just not notice how things worked out the last 3 or 4 times WB got bought out?

I have. It is hard to see why anybody still wants to buy them. I mean, picking up some of the pieces at the bankruptcy, sure, but swallowing the whole pot of poisonous stew? Makes no sense. Unless maybe the actual goal is to do to CNN what they did to CBS, never mind the cost.

 

[Asbestos Muffins]

Bad news for both of them, and really all streamers. I've cancelled all my streaming subscriptions in favor of a handful of 1-month subs to catch up on the very few shows I actually want to watch on any of them. Seems like a month per year per service covers that pretty well. And I know several other people adopting that practice, too.

Streaming subs, at best, are completely saturated, and can only swap customers back and forth without any overall growth, at least in the US. More likely is an actual decline, especially as prices continue to rise while services provide stagnate or fall.

until they pull the plug on them, tubi and pluto are still pretty good options. they were created only to appease regulators though so who knows how long they stay on.

 

[Tactical Finesse]

I don't see how mergers help those situations. If something is not economically viable for a market, there is a fundamental problem which needs to be addressed.

Allowing mergers (or subsidies, or any other schemes) just makes the problem worse because it allows the companies to play games around how they are selling, and prolong addressing the fundamental problem.
It also allows companies to play a game of chicken with the government by merging until they are "too big to fail" as a way of forcing government welfare instead of addressing the fundamental issues.

I really cannot think of any scenario where having a large conglomerate of companies in a failing market is better than having a competitive ecosystem with a lot of smaller companies. Both will encounter problems from the underlying issue, but it is far more manageable with unmerged companies.

In your airline example, the fundamental problem is the price needs to go up to cover fuel costs. With an ecosystem of small companies there will be competition to keep the increase passed to consumers to a minimum, with a single merged company they will raise prices how they see fit.
Even in the scenario where the government want to subsidize routes to ensure service to certain areas. Multiple companies competing to get traffic on a subsidized route will have a much better result. A single large company, as we have seen countless times, will just pocket the subsidy and do the bare minimum because the lack of competition lets them get away with it.

In my airline example, we don't get a better outcome no matter what. Either: the airline folds and there's no transit service (because we designed a system where you can only fly or drive), or consolidation and monopoly occurs with all the anti-consumer negatives that mess entails. There are no positive outcomes. Thems the choices we engineered for ourselves.

Either the way, the problem isn't competition, or the lack of it, but an engineered and purposeful lack of alternatives for a human need.

Fundamentally economy class domestic airfare tickets just are not sustainable business. Which is why all the carriers are dropping Coach seats in favor of premium(er) ones as the revenue per passenger-mile is far higher....oh, and the economy-class airlines are just collapsing and declaring bankruptcy altogether. And it is travel--it isn't like you have any other viable choice you'll realistically tolerate to travel medium or long distances. You want to go 500 miles from Omaha to Denver your options are either a soul-sucking 8 hour white-knuckle drive on I-80 or whatever American offers.

Sure you can take the California Zephyr from the OMA AmShack leaving at midnight headed west--the ride is only supposed to take 8 hours but almost always runs 4-8 hours late. And it only leaves OMA once a day. Which, isn't viable transit.

 

[graylshaped]

I don’t know if Netflix is doing any of the things Paramount is claiming, but it wouldn’t surprise me if someone wasn’t working to delay this merger. The conditions of the merger include a ticking fee from Paramount to WBD shareholders if the deal doesn’t close by the end of Q3. Fee is $650M per quarter. Any delay is a big payday for WBD shareholders, and Paramount can’t sustain that ticking fee for too long.

Is this where the "Oh. Anyway..." meme goes?

 

[AliSard]

Scorched earth? This deal deserves salted bombs, or a sky burner.