David Ellison is pushing hard for Paramount Skydance’s $108 billion bid to take over Warner Bros. Discovery. He believes European regulators will never allow Netflix to buy Warner Bros. He argues that the Paramount deal offers a quicker and safer path, saying regulators in Europe and the U.K. would never let Netflix eliminate one of its few real rivals, HBO Max.
Ellison points out that Netflix dominates the European subscription video market with around 51%. He compares Netflix’s strategy to a smokescreen, claiming they want a broad definition of competition to hide their true market strength. He insists the European laws, like the Digital Services Act, were designed to prevent situations just like this.
However, not all experts agree with Ellison’s view. The Hollywood Reporter spoke with European antitrust specialists. They believe both the Paramount and Netflix bids would undergo scrutiny but aren’t likely to be blocked. Cristina Caffarra, an antitrust economist, mentions that the European Commission has never blocked a merger like this before. Instead, they tend to impose conditions to keep the market fair.
For example, when Disney bought 21st Century Fox in 2019, regulators allowed the deal after Disney sold off some overlapping TV channels. Similarly, Amazon’s acquisition of MGM sailed through without conditions. Caffarra notes that regulators focus on specific overlaps rather than broader market concentration fears.
On the other hand, European media companies, like MFE-MediaForEurope, prefer the Paramount deal, claiming it would increase competition in streaming services. CEO Pier Silvio Berlusconi argues that it would create a fourth major player to compete with Netflix, Amazon, and Disney.
But the relevance of Netflix’s market share is still debated. Alice Enders, an analyst from the U.K., suggests that while Netflix is big, the internet has low entry barriers, making it easier for new players to emerge. HBO Max’s growth proves that competition can thrive.
Enders also points out that Paramount’s bid has its own complications. The backing from foreign investors, including sovereign wealth funds from the Middle East, raises concerns in Europe. Many European countries are wary of foreign ownership in their media landscape, especially in the U.K., where laws have tightened recently.
Earlier this year, discussions about acquiring ITV Studios fell apart due to these foreign ownership concerns. It’s believed that while Paramount’s bid may not be blocked, the foreign money involved could lead to more intense scrutiny from regulators.
Furthermore, Paramount has been cautious about the potential backlash from foreign investors. In a recent U.S. Securities and Exchange filing, they revealed that initial backer Tencent withdrew due to worries about regulatory reviews. Although foreign involvement doesn’t automatically kill a deal, it provides regulators extra leverage.
As Ellison presents his case, he frames Netflix as a danger to Hollywood’s future, claiming a Netflix-Warner partnership could hurt film distribution and production in the U.S. In contrast, he argues that Paramount promises to release more films and uphold traditional theater windows. Enders suggests that Paramount is making a political argument as much as a competitive one, aligning with sentiments about protecting American media.
The political climate plays a massive role in these discussions. President Trump indicated his intention to influence the decision over Warner Bros., claiming he’ll be involved directly. The Ellison family appears to be aligning itself closely with Trump’s agenda, pushing for a more favorable approach toward their media operations.
In today’s political landscape, perceptions might outweigh strict regulatory frameworks. While European regulators will review any deal carefully, they are unlikely to upset Washington’s preferences. Caffarra argues that the outcome will likely hinge more on geopolitical considerations than on market definitions or antitrust laws. Ultimately, she believes the European Commission won’t take action that could conflict with U.S. political interests.
This merger saga is a fascinating glimpse into how intertwined media, politics, and international relations have become, reflecting broader trends affecting the industry today.
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