Paramount Accuses Netflix of ‘Scorched-Earth’ Campaign to ‘Poison’ Warner Bros. Discovery Deal

Jae C. Hong/AP photo

Paramount Skydance accused Netflix of mounting a “scorched-earth” behind-the-scenes “campaign” to undermine its proposed $111 billion acquisition of Warner Bros. Discovery in a new letter sent to the Justice Department.

In the letter, dated June 5 and obtained exclusively by Politico, Paramount’s chief legal officer, Makan Delrahim, alleged Netflix was attempting to derail the transaction.

“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,” Delrahim wrote.

Netflix has also sought to convince stakeholders that Disney’s 2019 acquisition of 20th Century Fox harmed production and labour prospects, according to Delrahim. He argued that assessment ignores broader industry disruptions, including the Covid-19 pandemic.

The allegations come as Paramount responded to concerns raised by the International Brotherhood of Teamsters, Politico reported, which urged antitrust officials earlier this year to block the merger unless protections are put in place for workers.

The union argued the combination of Paramount and Warner Bros. Discovery “poses a direct threat to film and television workers nationwide” and warned against potential job losses.

“Paramount acquiring WBD will not reduce work opportunities for the Teamsters or other organized labor,” Delrahim wrote in the letter to the DOJ, arguing the merger would instead create new opportunities for union workers and boost content production.

He continued: “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.”

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

The letter marks one of Paramount’s most direct public efforts to frame opposition to the merger as being driven by Netflix, which exited the bidding process for Warner Bros. Discovery earlier this year.

The merger remains under review by the DOJ and California Attorney General Rob Bonta, who has previously said approval is “not a done deal.”

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