Theater lobbying group Cinema United has come out against a potential merger of Warner Bros. and Paramount after Netflix dropped from the months-long bidding war.
“We have been clear from the outset about our concerns around consolidation, and nothing that has occurred within the past 36 hours has changed that,” President and CEO Michael O’Leary said. “Studio consolidation historically leads to fewer movies being made, and at this juncture, there is no reason to believe the outcome here will be any different. We continue to urge regulators to heed the lessons of the past.”
O’Leary is referencing letters sent by Cinema United to Congressional antitrust committees last month after Netflix and its $82.7 billion offer had been selected as the winning bid, saying that “if Paramount or another major studio ends up displacing Netflix as the buyer, our concerns are no less serious.”
Since losing the initial bidding war and failing with a hostile takeover attempt, Paramount Skydance has turned to multiple new funding sources to make a new $111 billion offer that Warner Bros. Discovery deemed “superior” this past week and which Netflix declined to match. Included in that offer is a $45.7 billion equity commitment guaranteed by Paramount Skydance CEO David Ellison’s father, Oracle CEO Larry Ellison, and a guaranteed payment of $7 billion to WBD should regulators block the merger.
Prior to the pivot by WBD, Netflix had come under increased bipartisan scrutiny over the attempted acquisition, including from state attorneys general and from members of the Senate Judiciary Antitrust Committee. The chair of that committee, Republican Sen. Mike Lee, had scheduled a hearing for next week to further probe Netflix’s bid, but cancelled it after the streamer dropped out of the race.
“Netflix’s proposed acquisition of Warner Brothers raised serious antitrust concerns. When a massive streaming platform consolidates even more TV shows and movies behind a single paywall, American families lose. Walking away from this deal is a win for consumers,” Lee said in a statement Friday.
But it is not clear whether similar scrutiny will be held towards Paramount Skydance given the Ellisons’ longtime support of President Trump. While Lee has not indicated whether a new hearing will be scheduled to probe Paramount’s bid, ranking Democrat Cory Booker has called for more oversight.
“The circumstances surrounding this Administration’s antitrust enforcement, and the apparent political favoritism that has colored this, have cast a shadow over every transaction now moving through the approval process. Congress has a responsibility to ensure the Department of Justice and Federal Trade Commission are not clearing megamergers for the benefit of the Administration’s allies,” he wrote in a statement Thursday.
