Paramount Skydance says WBD merger needed to compete with Netflix, other rivals
Paramount Skydance believes that its proposed $110 billion merger with Warner Bros. Discovery is essential for it to stay competitive in the streaming industry, facing giants like Amazon, Disney, and Netflix. The mega-deal is expected to bring a new level of competitiveness to the entertainment sector.
This argument was detailed in a letter sent by Paramount’s chief legal officer, Makan Delrahim, to California Attorney General Rob Bonta on May 7, addressing recent misconceptions about the market. Delrahim’s letter was in response to concerns raised by Bonta regarding the potential impact of the merger.
Despite Bonta’s reservations, Paramount emphasized its commitment to California movie theater audiences and highlighted the pro-competitive advantages of the merger with Warner Bros. Discovery. The deal has already passed a crucial federal regulatory step in February.
If finalized, the merger would bring together Paramount Pictures, Warner Bros., streaming platforms like Paramount+ and HBO Max, and news outlets including CNN and CBS. The merged entity aims to release a minimum of 30 movies annually, enhancing the content available to audiences.
Delrahim’s letter also addressed the streaming capabilities of Paramount+ and HBO Max, noting that they lack the scale to effectively compete with industry leaders like Netflix, Disney+, and Amazon Prime Video. He highlighted the need for a transformative approach to achieve comparable viewership levels.
Furthermore, Delrahim pointed out that Paramount and Warner Bros. Discovery combined only represent a fraction of the US streaming market share compared to the top players. The lawyer reassured that the relationship with movie theater operators would remain unchanged post-merger, with the combined companies holding a modest 25% share of the domestic box office.
Despite concerns raised by Bonta, Paramount remains confident in the benefits of the merger and the potential for enhanced competition and content offerings in the entertainment industry.
