Paramount defended its proposed merger with Warner Bros. Discovery to California Attorney General Rob Bonta, who is considering an antitrust challenge to the transaction.
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| Paramount/Warner Bros. Discovery |
In a letter to Bonta last week, Paramount’s chief legal officer, Makan Delrahim, said that the combined companies would have the incentive to boost theatrical distribution, not reduce it.
Delrahim wrote, “Paramount’s proposed merger with WBD will help drive meaningful improvements for movie theaters and their audiences. To compete more effectively with Netflix, and others leading services, a combined Paramount-WBD will need to capture audiences’ attention in fresh ways, and that includes broadening theatrical distribution to tap into the magic of the moviegoing experience and create momentum behind films before they reach streaming services.”
Delrahim wrote that with the merger, the companies “will have every incentive to get more films into wider distribution on more movie theater screens—it is how it will compete for audiences across the entertainment ecosystem.” He repeated Paramount CEO David Ellison’s commitment to release 30 films annually and to have a 45-day theatrical window at a minimum for each release.
“That pledge makes sense: theaters are a core part of the combined firm’s strategy to drive engagement both on and off the big screen,” Delrahim wrote.
The letter also repeated other arguments, including that the transaction would better allow Paramount to compete at scale against Netflix. Delrahim noted that Paramount captures “only 5.8% of US SVOD viewership, and WBD 5.0%.9 By comparison, the top three streaming subscription platforms together capture 65% of all U.S. SVOD viewers—Netflix with 32.5%, Disney 16.7%, and Amazon 15.3%. Absent something transformative, neither party is positioned to grow to a scale where they would catch up to the leading streamers.”
Delrahim also challenged figures from Cinema United, the trade association for exhibitors, which is opposing the deal. He cited figures showing that Paramount and Warner Bros. combined represent about 25% of the domestic box office, citing OpusData of 4,000 theatrical releases over the last five years. He claimed that figures from Cinema United, showing a 35% domestic box office share, only captured revenues for the first half of 2025.
“In this environment, Paramount must continue to compete aggressively to find outlets for its films, with many other substitutes available for theaters to fill their screens,” Delrahim wrote.
Delrahim also distinguished the Paramount-WBD merger from the Disney-Fox transaction of 2019, which critics have cited in opposing the merger. The Disney-Fox deal led to a reduction in releases and substantial losses of jobs. Fox was pared down into a unit of The Walt Disney Co.
“Disney acquired Fox just a year before the 2020 pandemic, shortly before launching Disney+, a sea-change event that forced massive changes to every film distributor’s go-to- market strategy,” wrote Delrahim, who signed off on the Disney-Fox transaction in a previous job, as head of the Justice Department’s Antitrust Division during Donald Trump’s first term.
Delrahim added, “Paramount’s strategy, in contrast, is informed by the marketplace as it exists in the wake of the pandemic—with three streaming giants dominating audience attention on the one hand, and theaters slowly reemerging as a critical marketing engine and cultural phenomenon that can support Paramount-WBD’s efforts to compete in the entertainment ecosystem on the other.” Delrahim also contended that Disney already was reducing its theatrical releases before it acquired the Fox assets.
One of the concerns raised by opponents is that the deal would usher in massive job loss. Paramount has not made specific job commitments.
Ellison has said that the two studios will operate separately, and in his letter, Delrahim wrote, “Paramount and WBD’s studios will each release at least 15 films per year, and maintain full staff to support production and distribution, to ensure this target is hit. No such commitment was made when Disney acquired Fox.”
Paramount’s letter also noted expressions of support from James Cameron and Adam Aron, the CEO of AMC Entertainment.
A spokesperson for Bonta said in response to the letter, “The Paramount acquisition of Warner Brothers remains an active investigation and we do not have any updates to share at this time.”
Bonta told
Deadline in March, “Whenever there’s major corporate consolidation like this, there’s a concern that we might see increased prices, lower wages, reduction in competition, limits in choice, lower quality, all those things. That’s why there is antitrust law in the first place.”
Democratic lawmakers in Washington have warned of the transaction, with Sen. Cory Booker (D-NJ) holding a recent “spotlight” hearing that featured figures including Mark Ruffalo and documentary filmmaker David Borenstein. More than 5,000 filmmakers, industry professionals and others have signed on to an open letter opposing the transaction, including recent signees Jason Alexander, Tim Robbins, W. Kamau Bell and Lucy Fisher, per organizers.
Semafor first reported on the Paramount letter.
Paramount Skydance Defends WBD Merger by Arguing That Neither Paramount+ nor HBO Max Could ‘Catch Up’ to Netflix, Disney or Amazon on Their Own
In letter to California attorney general Rob Bonta, Paramount chief legal officer also says deal is unlike Disney-21st Century Fox
Paramount Skydance is continuing to insist that the David Ellison-led company’s $111 billion takeover of Warner Bros. Discovery will bring “new competitive energy to the entertainment ecosystem,” in the words of its top lawyer — not reduce competition.
On May 7, Paramount chief legal officer Makan Delrahim sent a letter to California Attorney General Rob Bonta, in which Delrahim “reiterate[d] our continued commitment and support to Californian movie theaters and audiences” coming “in response to certain misinformation about the marketplace expressed in recent public commentary.” The letter was reported earlier by Semafor.
Paramount is lobbying the California AG about the alleged pro-competitive benefits of a combined Paramount-WBD as Bonta and other state attorneys general are reviewing the deal for potential antitrust issues. In a call with reporters Monday, Bonta reiterated that the proposed deal has “red flags everywhere” and that his office is examining the merger’s potential to result in higher prices, lower wages and fewer jobs, less choice and less competition. The California AG recently joined with several other states to file a lawsuit seeking to block the Nexstar-Tegna deal.
In the letter, Delrahim argued that Paramount and WBD together will “drive meaningful improvements for movie theaters and their audiences” and he reiterated Ellison’s commitment that the merged company will release at least 30 films per year.
In addition, he said that Paramount+ and HBO Max separately do not have the scale to “compete effectively” against bigger subscription streaming players Netflix, Disney+ and Hulu, and Amazon’s Prime Video.
Both Paramount+ and HBO Max “lack the scale to compete effectively against the leading SVODs [subscription video-on-demand services],” wrote Delrahim. “Absent something transformative, neither party is positioned to grow to a scale where they would catch up to the leading streamers.”
Citing Nielsen estimates for December 2025, he said Paramount had only 5.8% of U.S. subscription VOD viewership, and Warner Bros. Discovery had 5.0%. “By comparison, the top three streaming subscription platforms together capture 65% of all U.S. SVOD viewers — Netflix with 32.5%, Disney 16.7%, and Amazon 15.3%,” he wrote. If the deal is completed, Paramount plans to combine Paramount+ and WBD’s HBO Max in some way.
Meanwhile, Delrahim downplayed the market power of the companies’ movie studios if they were consolidated. “Paramount’s relationship with theater operators will not materially change after the merger,” he maintained. “Combined, Paramount and WBD only represent about 25% of the domestic box office, with at least a half dozen other distributors competing to show their films in theaters” including Disney, Universal, Sony, Amazon MGM Studios and Lionsgate. The 25% market share estimate is based on domestic box office grosses for 4,000 films over the past five years as compiled by OpusData.
“In this environment, Paramount must continue to compete aggressively to find outlets for its films, with many other substitutes available for theaters to fill their screens,” Delrahim wrote.
Delrahim, who before joining Paramount had advised Skydance Media on the Paramount Global acquisition, also said that Paramount-WBD is not comparable to Disney’s $71 billion deal to acquire 21st Century Fox assets that closed in 2019.
He noted: “Even before it acquired Fox, Disney started reducing its theatrical releases, releasing only 7 and 10 films theatrically in 2017 and 2018, respectively. Paramount, in contrast, has already increased its theatrical releases dramatically and has committed to distributing 30+ feature films following the WBD merger. Paramount and WBD’s studios will each release at least 15 films per year, and maintain full staff to support production and distribution, to ensure this target is hit. No such commitment was made when Disney acquired Fox.”
He also argued that “Disney’s motivation for acquiring Fox was largely about acquiring majority control of Hulu,” whereas “Paramount’s motivation for acquiring WBD, in contrast, is maximizing output across the entertainment ecosystem (including theatrical release) to compete more effectively with much larger competitors in Netflix, Disney, and Amazon. Increasing production and distribution volume is a key lever that Paramount has identified to achieve internal revenue targets for the combined company.”
That said, more films in theaters does not necessarily mean more money. Paramount, in reporting Q1 2026 earnings, said it expects “significantly lower theatrical revenue year-over-year due to lower average box office revenue per film across more releases” in 2026. A big part of that is that the studio faces a difficult year-over-year comparison because of 2025’s “Mission: Impossible – The Final Reckoning” (which took in nearly $600 million at the global box office). But it shows that simply churning out more titles doesn’t actually correlate with bigger economic impact.
Last month, Warner Bros. Discovery shareholders overwhelmingly voted in favor of the Paramount deal. The pact still requires approval by European regulators.
Paramount, before it won the WBD deal, said its proposed WBD takeover had cleared a milestone at the Justice Department, after the expiration of the statutory waiting period following Paramount’s “certification of compliance” with the DOJ’s second request for information under the Hart-Scott-Rodino antitrust act. However, the DOJ has the latitude to challenge a merger even after the HSR waiting period expiration. In March, the acting head of the Justice Department’s antitrust division, Omeed Assefi, said the Paramount-WBD deal will “absolutely not” be on a fast-track for approval due to political reasons, in the context of the Ellison family’s friendly ties to Trump.
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