{"id":342960,"date":"2025-12-13T17:01:08","date_gmt":"2025-12-13T17:01:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/342960\/"},"modified":"2025-12-13T17:01:08","modified_gmt":"2025-12-13T17:01:08","slug":"david-ellisons-netflix-scare-tactic-runs-into-european-reality","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/342960\/","title":{"rendered":"David Ellison\u2019s Netflix Scare Tactic Runs into European Reality"},"content":{"rendered":"

\n\tIn his pitch <\/a>to Warner Bros. Discovery shareholders to accept Paramount Skydance\u2019s $108 billion hostile takeover bid, David Ellison<\/a> 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 \u201ca much shorter and more certain path to completion,\u201d insisting that the European Commission and the U.K.\u2019s Competition and Markets Authority would balk at allowing the world\u2019s largest streamer to swallow one of its few global competitors.<\/p>\n

\n\tEllison\u2019s argument hinges on Netflix\u2019s dominance in Europe. With roughly 51 percent of the continent\u2019s subscription video on-demand (SVOD) market, he characterizes Netflix\u2019s move as \u201ca blatant attempt to eliminate one of Netflix\u2019s only viable international<\/a> competitors in HBO Max.\u201d He says EU regulators would reject Netflix\u2019s preferred market definition \u2014 a broad \u201call internet-enabled video\u201d category that lumps subscription streaming together with YouTube, TikTok and other platforms \u2014 and instead focus narrowly on SVOD, where Netflix\u2019s share is most pronounced. In his telling, EU laws such as the Digital Services Act and Digital Markets Act were written \u201cfor a situation precisely like this.\u201d<\/p>\n

\n\tNot everyone agrees. The Hollywood Reporter spoke to several European antitrust experts and most believe that both Paramount\u2019s and Netflix\u2019s buyout deals would face regulatory scrutiny by the EU, but neither is likely to be stopped.\u00a0<\/p>\n

\n\t\u201cThe European Commission has never blocked this kind of merger, of platform or studio concentration before. They\u2019re not going to start doing it now,\u201d says Cristina Caffarra, an expert antitrust economist who advised on multiple prior media mergers before the Commission, including the recent Amazon MGM buyout. The regulatory process would be long, she says, going to so-called \u201cPhase II investigations\u201d which can take months or even years to complete, but the EU will land on \u201cremedies\u201d to ensure fair competition instead of an outright ban.<\/p>\n

\n\tShe points to Disney\u2019s 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\u2019s National Geographic channels in certain EU territories. Amazon\u2019s 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 \u2014 in channels, sports rights, or cable bundling \u2014 but seemed unconcerned by broader fears of studio consolidation, theatrical releases or streaming dominance.\u00a0<\/p>\n

\n\tEuropean media companies would likely prefer a Paramount deal. Pier Silvio Berlusconi, chief executive of pan-European broadcaster MFE-MediaForEurope, has argued a Paramount-Warners merger would boost SVOD competition.<\/p>\n

\n\t\u201cIt would mean that instead of three major over-the-top players \u2013 Netflix, Amazon and Disney\u2013 there would be four, adding another competitor for them,\u201d Berlusconi said at a press briefing at MFE\u2019s headquarters on Dec. 11.<\/p>\n

\n\tBut how much Netflix\u2019s market share actually matters is also disputed.\u00a0\u201c[President] Trump raised the issue of Netflix having a high market share and HBO Max adding to that, which is true \u2014 but whether it\u2019s a regulatory issue is another matter,\u201d says Alice Enders of U.K.-based Enders Analysis. \u201cOn the internet, there are no real barriers to entry. The fact that HBO Max was able to gain market share from Netflix shows that\u2026It\u2019s hard to argue that Netflix and HBO would create a combination that would have an unassailable market share in streaming.\u201d\u00a0<\/p>\n

\n\tEnders argues that Paramount\u2019s 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 U.A.E. deputy prime minister Sheikh Mansour, backing Ellison\u2019s Paramount Skydance bid.\u00a0<\/p>\n

\n\t\u201cEuropeans have very strong hesitation about allowing foreign state investment in broadcast media,\u201d she says. \u201cSo I think something like the Netflix deal actually has lower regulatory barriers.\u201d<\/p>\n

\n\tThe foreign-ownership issue is particularly sensitive in the U.K., 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\u2019s 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\u2013WBD merger, it gives regulators political leverage to probe the deal more deeply.<\/p>\n

\n\tParamount itself has indicated that foreign involvement in the WBD takeover could raise regulatory red flags. In its revised filing with the U.S. Securities and Exchange Commission of its takeover bid, dated Dec. 8, Paramount said the Chinese media giant Tencent was an inital backer of their buyout deal but had dropped its $1 billion financing commitment out of concern, since it would be a \u201cnon-U.S. equity financing source,\u201d 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\u2019s bid, had agreed to give up a right to participate in Warner Bros\u2019 management to avoid the additional regulatory scrutiny.\u00a0<\/p>\n

\n\tAs Ellison sharpens his regulatory case in Europe for a Paramount deal, he is also framing the Netflix bid as a broader threat to Hollywood\u2019s ecosystem. Netflix\u2019s ownership of Warner Bros. would \u201cstarve theatrical distribution\u201d and accelerate the erosion of U.S. film production. Paramount, in contrast, has pledged to release more than 30 movies a year and protect theatrical windows. \u201cWe\u2019re friendly to Hollywood and they\u2019re not,\u201d is how Enders summarizes the studio\u2019s pitch. \u201cThat\u2019s not a competition argument. It\u2019s a political argument. An industrial-strategy argument. And it plays into Trump\u2019s idea of putting tariffs on foreign films \u2014 all about the decline of Hollywood as a production center.\u201d<\/p>\n

\n\tIncreasingly, 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. \u201cI\u2019ll be involved in that decision,\u201d Trump said on Dec. 7 when asked about the competing takeover bids.<\/p>\n

\n\tParamount is betting hard<\/a> on that reality. The Ellisons \u2014 David and his father, Larry \u2014 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\u00a0Rush Hour 4\u00a0reportedly at Trump\u2019s 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.<\/p>\n

\n\tIn 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\u2019s antitrust authorities are, in theory, politically independent, but they\u00a0are unlikely to block any deal bearing Trump\u2019s stamp of approval.\u00a0<\/p>\n

\n\tCaffarra argues that geopolitical calculus \u2014 not market definition or competition law\u2014 will decide the fate of Warner Bros. Discovery. \u201cEverybody knows that when push comes to shove, [the European Commission] will not do anything that remotely upsets the U.S. administration,\u201d she says. \u201cThe final decision has already been taken, and it is whatever President Trump wants to do.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"In his pitch to Warner Bros. Discovery shareholders to accept Paramount Skydance\u2019s $108 billion hostile takeover bid, David…\n","protected":false},"author":2,"featured_media":342961,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[45,49,48,18027,77],"class_list":{"0":"post-342960","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-david-ellison","12":"tag-international"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/342960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=342960"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/342960\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/342961"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=342960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=342960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=342960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}