Netflix Looks for Resolution in WBD-Paramount Talks, Criticizes David Ellison’s Company for Misleading Warner Shareholders

Netflix Criticizes Paramount’s Tactics Amid Regulatory Battle

Netflix has accused Paramount of engaging in misleading tactics aimed at disrupting its merger with Warner Bros. Discovery (WBD). In a pointed statement, the streaming giant condemned what it termed "Paramount’s antics" and defended its own agreement with WBD amid growing tensions in the entertainment sector.

The merger, finalized last December and unanimously approved by WBD’s board, is slated for a shareholder vote on March 20. WBD disclosed plans to interact with Paramount over a one-week period ending February 23, emphasizing its commitment to the deal.

For several months, Paramount has sought to undermine Netflix’s transaction with aggressive offers.

“Throughout the robust and highly competitive strategic review process, Netflix has consistently taken a constructive, responsive approach with WBD, in stark contrast to Paramount Skydance. While we are confident that our transaction provides superior value and certainty, we recognize the ongoing distraction for WBD stockholders and the broader entertainment industry caused by PSKY’s antics. Accordingly, we granted WBD a narrow seven-day waiver of certain obligations under our merger agreement to allow them to engage with PSKY to fully and finally resolve this matter,” a Netflix representative stated.

Reaffirming the strength of its agreement, Netflix emphasized it is the only signed merger that has received board backing from WBD. The company affirmed the importance of timely regulatory approvals in ensuring value for WBD’s shareholders.

“Netflix is confident that our transaction, a largely vertical merger of complementary assets, has a clear path to timely regulatory approval,” the company noted. Netflix and WBD have both submitted their Hart-Scott-Rodino filings and are collaborating with global competition authorities, including the DOJ and the European Commission.

In stark contrast, Netflix criticized Paramount for allegedly misrepresenting the regulatory review process. “PSKY has repeatedly mischaracterized the regulatory review process by suggesting its proposal will sail through, misleading WBD stockholders about the real risk of their regulatory challenges around the world. WBD stockholders should not be misled into thinking that PSKY has an easier or faster path to regulatory approval—it does not,” stated the leadership team of Netflix.

The company pointedly dismissed Paramount’s claims of progress, highlighting how both firms secured German Foreign Direct Investment (FDI) clearance on the same day.

Analysts have raised concerns regarding the foreign funding backing Paramount’s bid, particularly regarding the implications for competition and job security in the industry. The potential merger could create overlapping interests in Hollywood and within news networks, raising alarms about job losses and wage reductions.

Paramount has promised up to $6 billion in cost savings from its merger, likely to be achieved through extensive layoffs. Meanwhile, Netflix suggested that the combined debt burden of Paramount and Warner Bros. could necessitate cuts of up to $16 billion.

Furthermore, Netflix pointed out that Paramount is currently falling short of its financial projections following its merger with Skydance last August. “This extraordinary execution risk and track record of operational underperformance could impact PSKY’s ability to fund and close a transaction,” Netflix stated.

Highlighting its own financial health, Netflix expressed confidence in its all-cash transaction structure, which it claims would enhance the entertainment industry by providing greater choice and value for consumers while offering expanded opportunities for creators.

However, critics—including guilds, exhibitors, and some lawmakers—remain skeptical of Netflix’s commitment to theatrical releases and are concerned about the potential for monopolistic behavior in streaming should HBO Max come under its umbrella.