Paramount Skydance's top lawyer fired a pointed accusation at Netflix in a letter to the Justice Department, alleging the streaming giant has been working behind the scenes to turn regulators, labor unions, and other stakeholders against Paramount's proposed $111 billion acquisition of Warner Bros. Discovery.
The June 5 letter, written by Paramount chief legal officer Makan Delrahim and addressed to DOJ Antitrust Division attorneys Jared A. Hughes and A. Maya Khan, laid out what Delrahim characterized as a deliberate effort by Netflix to undermine a deal that would reshape the entertainment industry. Netflix dismissed the allegations in a single sentence.
The clash exposes a high-stakes fight over the future of Hollywood's power structure, and raises questions about whether one of the industry's dominant players is using regulatory channels as a competitive weapon rather than letting the market sort out winners and losers.
Delrahim's letter, first reported by Variety, accused Netflix of waging what he called a broad effort to sabotage the pending transaction. The language was direct.
"Netflix's panic-level response and scorched-earth campaign to try and poison regulators and other stakeholders against the Transaction shows just how seriously Netflix takes Paramount as a scaled competitor."
Delrahim went further, claiming Netflix had specifically targeted organized labor, including the International Brotherhood of Teamsters, by drawing unfavorable comparisons between the Paramount-WBD deal and Disney's 2019 acquisition of 21st Century Fox, a $71 billion transaction that reshaped the industry seven years ago.
"We understand that as part of its broader proxy war against the Transaction, Netflix has tried to persuade the Teamsters and other stakeholders that Disney's acquisition of Fox had a negative impact on content production and labor opportunities. Frankly, Netflix's 'sky is falling' narrative departs significantly from the ground-truth reality of what actually happened."
Delrahim pushed back on the Disney-Fox comparison directly, asserting that Disney "has unequivocally increased its spending on producing content overall since acquiring Fox." The implication: Netflix is peddling a false narrative to serve its own competitive interests, not protecting workers.
A Netflix spokesperson offered a terse response that neither addressed the specific allegations nor engaged with the substance of Delrahim's letter.
"These claims from Paramount Skydance are absurd. We walked away from this deal months ago and remain focused on our own business, not theirs. Ultimately, it's up to the regulators to approve this deal and determine if it is in the best interest of the industry and all concerned."
That last sentence is worth reading twice. Netflix says regulators should decide, while Paramount accuses Netflix of trying to influence those very regulators. The denial and the accusation don't actually contradict each other. You can walk away from a deal and still lobby against the company that outbid you.
The backstory matters. Netflix clinched a deal to buy Warner Bros.'s streaming and studios businesses in late 2025. But Paramount upped its offer for all of WBD, and Netflix backed out of the bidding in February. Whether Netflix left quietly or left with a grudge is the question Delrahim's letter raises.
Netflix's own corporate trajectory has shifted considerably in recent months. Reed Hastings exited the Netflix board as the company pivoted toward ads and live sports, a strategic bet that makes the competitive landscape even more volatile.
The labor dimension of this fight is real. The International Brotherhood of Teamsters submitted a white paper to the Justice Department in March urging the agency to block the Paramount-WBD merger unless Paramount agreed to "substantial and enforceable safeguards" against job cuts and committed to increasing U.S. production.
The Teamsters called the proposed merger a "direct threat to film and television workers nationwide," citing nearly 15,000 Motion Picture Teamsters who could be affected. That's a significant workforce, and the union's concerns about consolidation leading to layoffs are not unreasonable on their face.
But Delrahim's letter attempted to flip the labor argument entirely. He pitched the merger as a boon for workers, not a threat.
"Paramount's content strategy aligns directly with the Teamsters' interests. More films and series in production means more call sheets, more location days, more transportation, casting, and catering work. The combined company will have no incentive to shrink the production engine that drives its competitiveness. Increasing production volume is the central pillar of how Paramount intends to compete."
Delrahim also reiterated CEO David Ellison's commitment that the merged company would release at least 30 films per year. And he framed the deal as a necessity for survival, repeating Paramount's claim that Paramount+ and HBO Max simply lack the scale to compete against Netflix, Disney+ and Hulu, and Amazon's Prime Video on their own.
The broader media landscape reinforces that argument. Aggressive consolidation is happening across the entertainment industry, with smaller players scrambling to bulk up or risk irrelevance.
Paramount's fight isn't just with Netflix. The deal faces regulatory scrutiny from several directions simultaneously.
In the U.S., Paramount is still awaiting an official greenlight from the DOJ. State attorneys general, including California's Rob Bonta, are potentially moving forward with litigation seeking to block the deal on antitrust grounds. Across the Atlantic, the U.K.'s Competition and Markets Authority announced it had initiated its own investigation into the proposed transaction.
The foreign ownership question adds another layer. Paramount disclosed in an April FCC filing that the merged Paramount-WBD entity would be 49.5% owned by foreign investors. Roughly 38.5% of the equity would belong to sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi. Variety confirmed that those three Middle Eastern countries had pledged a total of $24 billion toward Paramount's Warner Bros. bid.
That level of foreign state investment in a major American media company is the kind of fact that ought to draw serious scrutiny regardless of one's views on media consolidation. Warner Bros. Discovery shareholders already voted to approve the merger, but shareholder approval and regulatory approval are very different hurdles.
In a separate interview with the Los Angeles Times last week, Delrahim escalated the rhetoric further, accusing some opponents of the deal of acting from antisemitic motives.
"There's a lot of fear-mongering, particularly from people in Washington, D.C. They are running a political campaign. Some of these people are trying to inflict harm on this transaction really because of their own antisemitic views."
Delrahim did not identify which specific opponents he was referring to. The accusation is serious, and without names or evidence attached, it hangs in the air, a claim that demands either substantiation or retraction.
What's clear is that Paramount's legal team is playing aggressive offense. Delrahim served as the head of the DOJ's Antitrust Division during the Trump administration before joining Paramount, and he knows the regulatory playbook from the inside. His letter reads less like a legal filing and more like a public relations broadside designed to reframe the narrative around who is really acting in bad faith.
Strip away the corporate name-calling and two substantive questions remain. First: is Netflix actually lobbying regulators and labor unions against the deal, or is Paramount manufacturing a villain to distract from legitimate antitrust concerns? Delrahim's letter makes allegations but the specific evidence behind them remains unclear.
Second, and more important for the public interest: should a deal that would concentrate this much of American media under one roof, nearly half of it owned by foreign sovereign wealth funds, sail through on the promise that more content means more jobs?
The entertainment industry's track record on post-merger promises is mixed at best. Companies routinely pledge to maintain production levels and protect workers right up until the deal closes. Then the spreadsheets come out. Even major production companies have been rethinking their relationships with streaming giants, a sign that the industry's power dynamics remain unstable.
Delrahim's argument that the Disney-Fox deal led to increased content spending may be accurate in aggregate. But aggregate spending figures can mask real pain for individual workers, studios, and communities. The Teamsters have reason to be cautious, regardless of who whispered in their ear.
Paramount wants regulators to see Netflix as a sore loser trying to kneecap a competitor through back channels. Netflix wants to look like a disinterested bystander that walked away months ago. Neither posture is entirely convincing.
What's unmistakable is that the biggest players in entertainment are willing to use every available lever, regulatory, political, and rhetorical, to shape the market in their favor. That includes lobbying the DOJ, courting labor unions, filing with the FCC, and making accusations of bigotry in newspaper interviews.
Legacy entertainment companies are under enormous pressure, and the scramble to consolidate or be acquired reflects an industry that knows the old business model is broken.
None of these companies are looking out for the public interest. They're looking out for themselves. The job of regulators is to see past the lobbying, past the rhetoric, and past the corporate theatrics, and ask whether this deal serves the people who actually watch the movies, make the movies, and pay the bills. If the DOJ can't manage that basic task without being manipulated by one side or the other, the problem runs deeper than any single merger.