Paramount initiates legal action against Warner Bros. following contentious Netflix merger

Streaming Industry Faces Turmoil Amid Netflix and Warner Bros. Merger Plans

As Netflix and Warner Bros., two giants in the streaming world, move closer to a merger, industry observers are voicing growing apprehension about the potential consequences of this major consolidation in the media sector.

Paramount Takes Legal Action Over Netflix Acquisition

On Monday, David Ellison, CEO of Paramount, revealed that his company has initiated a lawsuit against Warner Bros. Discovery (WBD) in Delaware. The suit demands more transparency regarding Netflix’s proposed $82.7 billion purchase of Warner Bros.

In Ellison explained that the case, filed in Delaware Chancery Court, seeks to compel WBD to release vital financial details that have allegedly been withheld. He emphasized that shareholders require complete and accurate information to properly evaluate Paramount’s competing all-cash offer of $30 per share, which he maintains is more favorable than Netflix’s bid.

“WBD has come up with increasingly creative justifications to avoid a deal with Paramount, but what it has never claimed—because it cannot—is that the Netflix proposal is financially better than ours,” Ellison stated.

He further criticized WBD for not providing the standard financial disclosures expected when a board recommends an investment. According to Ellison, WBD has omitted crucial details, such as how it determined the value of the Netflix deal, the mechanics of debt-related price adjustments, and the rationale behind its risk assessment of Paramount’s offer. Ellison insists that WBD shareholders need this information to make an informed choice.

WBD Board Rejects Paramount’s Proposal Again

Just last week, the WBD board turned down Paramount’s latest bid, citing concerns over the likelihood of the transaction failing to close.

Political and Public Backlash Intensifies

Former President Trump has also voiced his opposition to the merger. Over the weekend, he shared an editorial by John Pierce, titled “Stop the Netflix Cultural Takeover,” originally published in One America News. Pierce argues that if Netflix acquires Warner Bros.’ streaming and studio divisions, it would become “the most powerful cultural gatekeeper the United States—and much of the world—has ever seen.”

Following a December meeting with Netflix co-CEO Ted Sarandos, Trump remarked that the merger “could be a problem,” pointing to Netflix’s already dominant position in the market, which would only grow with the acquisition.

Industry and Lawmakers Raise Red Flags

The broader entertainment industry has largely responded with skepticism, expressing worries about potential job losses, the fate of theatrical releases, and diminished opportunities for diverse creators in film and television.

Netflix co-CEOs Greg Peters and Ted Sarandos tried to address these concerns in a letter last month. Despite their assurances, the Writers Guild of America (WGA) remains firmly opposed, citing possible violations of antitrust regulations. Meanwhile, lawmakers such as Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal have warned that the merger could drive up prices for consumers, adding to the financial strain on middle-class households—especially in light of Netflix’s recent subscription fee increases.