Paramount Skydance fired back at Netflix in a DOJ letter over its $110 billion Warner Bros. Discover
The battle for Hollywood’s future just got considerably more personal. Paramount Skydance has accused Netflix of waging a behind-the-scenes campaign to undermine its $110 billion acquisition of Warner Bros. Discovery, escalating a rivalry between two of the world’s most powerful entertainment companies into an open legal and regulatory confrontation.
In a letter sent to the U.S. Department of Justice on Friday and first reported by Politico, Paramount Skydance chief legal officer Makan Delrahim accused Netflix of spearheading what he described as an effort to poison regulators and other stakeholders against the deal. He also characterized Netflix’s actions as a panic-level response that reveals just how seriously the streaming giant views Paramount as a genuine competitive threat. Netflix called the claims absurd and said it had walked away from its own bid for Warner months ago and remained focused on its own business.
How the deal came together
The road to the current Paramount-Warner Bros. Discovery merger was anything but straightforward. Warner Bros. Discovery first announced a merger agreement with Netflix in December 2025, valuing the transaction at approximately $83 billion. Paramount Skydance, led by CEO David Ellison, launched a competing hostile bid, setting off a months-long bidding war between the two companies. The DOJ launched an in-depth antitrust review of the Netflix deal during that period.
Warner’s board ultimately chose Paramount’s offer. On February 27, 2026, the two companies announced a definitive merger agreement under which Paramount will acquire all outstanding shares of Warner Bros. Discovery at $31 per share in cash, representing an equity value of $81 billion and a total enterprise value of $110 billion. WBD shareholders approved the deal in late April. The transaction is expected to close in the third quarter of 2026, subject to regulatory clearance. Paramount paid Netflix a $2.8 billion termination fee when Warner’s board switched sides.
The combined company would unite two of the most storied names in Hollywood history, bringing together intellectual property spanning The Godfather, Casablanca, the DC Universe, SpongeBob SquarePants, MTV, CBS, and HBO under one corporate roof. Ellison has publicly committed to releasing at least 30 feature films per year in movie theaters, framing the merger as a pro-consumer, pro-content creation enterprise.
What Paramount is fighting back against
Delrahim’s letter was written in direct response to a March report submitted to the DOJ by the International Brotherhood of Teamsters, whose members include drivers and other crew workers on film and television sets. The union argued that the merger poses a direct threat to film and television workers nationwide and called on the DOJ to block the deal unless substantial and enforceable protections are put in place to increase domestic production and protect jobs. The union pointed to Disney’s 2019 acquisition of 21st Century Fox’s entertainment assets as a cautionary example, arguing that the consolidation hurt workers.
Paramount’s letter flatly rejected both arguments. On the Teamsters’ labor concerns, Delrahim argued that the merger would instead increase content production, create more work for union members, and align directly with labor’s interests by expanding call sheets, location days, and production activity. On the Disney-Fox comparison, he pushed back forcefully, writing that Disney had unequivocally increased its overall content spending after acquiring Fox.
On Netflix specifically, Delrahim accused the company of running a broader proxy war that included attempting to persuade the Teamsters and other stakeholders that the Disney-Fox deal had damaged the industry as a way to build opposition to the current transaction.
Who else is watching
Netflix and the Teamsters are not the only forces scrutinizing the deal. More than 1,000 entertainment professionals, including A-list actors, producers, and directors, signed an open letter in April arguing the transaction would further consolidate an already concentrated media landscape at a moment when the industry could least afford it. California Attorney General Rob Bonta, who has said regulatory approval is not a done deal, has opened an investigation into the merger. The United Kingdom’s antitrust authority formally announced a separate probe on Tuesday.
The DOJ itself has not yet concluded its review. If the deal fails to close by September 30, 2026, Warner Bros. Discovery shareholders will begin receiving a daily ticking fee of $0.25 per share per quarter until it does. A $7 billion regulatory termination fee would be paid by Paramount if the deal ultimately collapses due to regulatory failure.
Delrahim joined Paramount Skydance as chief legal officer last fall. He previously served as U.S. assistant attorney general overseeing the DOJ’s Antitrust Division during President Trump’s first term and later advised Skydance Media as a partner at law firm Latham and Watkins.
Source: NBC News, Deadline, Mediaite, Politico, Variety, The Statesman, kaufcan.com