“In his pitch to Warner Bros. Discovery shareholders to accept Paramount Skydance’s $108 billion hostile takeover bid, David Ellison has repeatedly argued that European regulators will never allow Netflix to buy Warner Bros. Discovery. In his Dec. 10 letter to WBD shareholders, Ellison said the Paramount buyout deal offers “a much shorter and more certain”, — write: www.hollywoodreporter.com
Ellison’s argument hinges on Netflix’s dominance in Europe. With roughly 51 percent of the continent’s subscription video on-demand (SVOD) market, he characterizes Netflix’s move as “a blatant attempt to eliminate one of Netflix’s only viable international competitors in HBO Max.” He says EU regulators would reject Netflix’s preferred market definition — a broad “all internet-enabled video” category that lumps subscription streaming together with YouTube, TikTok and other platforms — and instead focus narrowly on SVOD, where Netflix’s share is most pronounced. In his telling, EU laws such as the Digital Services Act and Digital Markets Act were written “for a situation precisely like this.”
Not everyone agrees. The Hollywood Reporter spoke to several European antitrust experts and most believe that both Paramount’s and Netflix’s buyout deals would face regulatory scrutiny by the EU, but neither is likely to be stopped.
“The European Commission has never blocked this kind of merger, of platform or studio concentration before. They’re not going to start doing it now,” says Cristina Caffarra, who has advised the Commission on major media mergers including the recent Amazon MGM buyout. The regulatory process would be long, she says, going to so-called “Phase II investigations” which can take months or even years to complete, but the EU will land on “remedies” to ensure fair competition instead of an outright ban.
She points to Disney’s purchase of 21st Century Fox in 2019, which cleared the EC after Disney agreed to sell off several European factual TV channels, including History and Lifetime, because these overlapped with Fox’s National Geographic channels in certain EU territories. Amazon’s 2022 acquisition of MGM, perhaps a closer comp to the Netflix-Warners deal, sailed through the EC unconditionally. In both cases, regulators zeroed in on specific overlaps — in channels, sports rights, or cable bundling — but seemed unconcerned by broader fears of studio consolidation, theatrical releases or streaming dominance.
European media companies would likely prefer a Paramount deal. Pier Silvio Berlusconi, chief executive of pan-European broadcaster MFE-MediaForEurope, has argued that a Paramount-Warners merger would boost SVOD competition.
“It would mean that instead of three major over-the-top players – Netflix, Amazon and Disney – there would be four, adding another competitor for them,” Berlusconi said at a press briefing at MFE’s headquarters on Dec. 11.
But how much Netflix’s market share actually matters is also disputed. “[President] Trump raised the issue of Netflix having a high market share and HBO Max adding to that, which is true — but whether it’s a regulatory issue is another matter,” says Alice Enders of UK-based Enders Analysis. “On the internet, there are no real barriers to entry. The fact that HBO Max was able to gain market share from Netflix shows that…It’s hard to argue that Netflix and HBO would create a combination that would have an unassailable market share in streaming.”
Enders argues that Paramount’s bid contains its own European vulnerability: The foreign money, including sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi, and RedBird Capitol, controlled by UAE deputy prime minister Sheikh Mansour, backing Ellison’s Paramount Skydance bid.
“Europeans have very strong hesitation about allowing foreign state investment in broadcast media,” she says. “So I think something like the Netflix deal actually has lower regulatory barriers.”
The foreign-ownership issue is particularly sensitive in the UK, which recently tightened its laws to prevent foreign state control of news outlets and can intervene in media mergers under national security powers. Those rules are believed to have contributed to RedBird’s decision to pull out of early-stage talks to acquire ITV Studios earlier this year. While sovereign wealth backing would not automatically derail a Paramount–WBD merger, it gives regulators political leverage to probe the deal more deeply.
Paramount itself has indicated that foreign involvement in the WBD takeover could raise regulatory red flags. In its revised filing with the US Securities and Exchange Commission of its takeover bid, dated Dec. 8, Paramount said the Chinese media giant Tencent was an initial backer of their buyout deal but had dropped its $1 billion financing commitment out of concern, since it would be a “non-US equity financing source,” that its bid might be subject to a review by the Committee on Foreign Investment in the United States (CFIUS). The SEC filing said the foreign sovereign wealth funds, putting up $24 billion for Paramount’s bid, had agreed to give up a right to participate in Warner Bros’ management to avoid the additional regulatory scrutiny.
As Ellison sharpens his regulatory case in Europe for a Paramount deal, he is also framing the Netflix bid as a broader threat to Hollywood’s ecosystem. Netflix’s ownership of Warner Bros. would “starve theatrical distribution” and accelerate the erosion of US film production. Paramount, in contrast, has pledged to release more than 30 movies a year and protect theatrical windows. “We’re friendly to Hollywood and they’re not,” is how Enders summarizes the studio’s pitch. “That’s not a competition argument. It’s a political argument. An industrial-strategy argument. And it plays into Trump’s idea of putting tariffs on foreign films — all about the decline of Hollywood as a production center.”
Increasingly, the political argument may be the only one that matters. The president has already declared that he, not the regulators, will ultimately decide who gets Warner Bros. Discovery. “I’ll be involved in that decision,” Trump said on Dec. 7 when asked about the competing takeover bids.
Paramount is betting hard on that reality. The Ellisons — David and his father, Larry — have spent months aligning themselves with Trump as they pursue a broader media empire. They pushed CBS News toward a more Trump-friendly editorial posture by installing Bari Weiss as editor-in-chief, revived Rush Hour 4 reportedly at Trump’s urging. If their Warner deal goes through, David has reportedly promised to make sweeping changes at Warner-owned CNN, a network Trump has long targeted.
In the current environment, that political alignment in Washington may mean more than any regulatory objections coming out of Brussels. European regulators can be expected to dissect any deal that lands on their desk but will most likely wait until the DOJ has made its ruling. Europe’s antitrust authorities are, in theory, politically independent, but they are unlikely to block any deal bearing Trump’s stamp of approval.
Caffarra argues that geopolitical calculus — not market definition or competition law — will decide the fate of Warner Bros. Discovery. “Everybody knows that when push comes to shove, [the European Commission] will not do anything that remotely upsets the US administration,” she says. “The final decision has already been taken, and it is whatever President Trump wants to do.”