As we covered in Part 1 of this series, Netflix announced a definitive agreement to acquire Warner Bros. Studios, HBO, HBO Max, DC Entertainment, and TNT Sports for $27.75 per share on 5 December, valuing the deal at approximately $72 billion.
Three days later, Paramount launched a hostile, all-cash bid directly to shareholders at $30 per share for the entire Warner Bros. Discovery group (i.e. including its cable channels like CBS, in addition to what Netflix had bid for), valuing the transaction at approximately $108.4 billion.
Warner Bros. Discovery has said it will take ten days to evaluate Paramount’s offer and make a recommendation to shareholders.
Ronin Legal takes a closer look at the potential antitrust issues either of these deals would throw up, drawing on the kind of transaction analysis typically undertaken by experienced corporate lawyers advising on complex media sector consolidations.
Key Legal Issues
Market Power and Concentration
- Netflix: The transaction combines the world’s leading streaming distributor with a portfolio of premier content assets and would likely be characterised as both a horizontal and vertical integration in an already concentrated streaming market. Estimates suggest the combined entity would hold roughly 30-40% of the U.S. streaming segment – a level that courts have regarded as sufficient to trigger a presumption of enhanced market power – prompting close regulatory scrutiny of potential price and output effects.
- Paramount: The Paramount-Warner combination is more of a classic studio‑to‑studio tie‑up. The two companies’ combined share of the U.S. streaming market is estimated to be under 3.5%, giving Paramount a stronger prima facie claim that the transaction would not adversely affect competition. It can argue that it is simply seeking viable scale to boost competition rather than becoming a dominant platform with increased market power.
Foreclosure and Control
- Netflix: By owning Warner’s film and TV catalogue alongside HBO, DC, and TNT Sports, Netflix could be accused of “raising rivals’ costs” by restricting or delaying access to must-have content for competing streaming platforms and pay‑TV aggregators. They could raise competitors’ costs or force higher prices for consumers to access this premium content.
- Paramount: Paramount can argue that, because it starts from a much smaller streaming footprint, integrating Warner’s content simply gives it enough power to compete for rights and eyeballs, rather than enabling it to foreclose rivals from essential programming.
Buyer Power
- Netflix: With Warner’s assets on top of its existing slate, Netflix would become an even more dominant buyer of premium scripted content, raising concerns that it could push harsher exclusivity, tighter windows, and weaker profit‑participation for independent producers.
- Paramount: Paramount is better placed to claim that combining with Warner will preserve diversity of buyers by creating a more credible alternative commissioning platform to Netflix, Disney, and Amazon for talent and independent studios.
Barriers to Entry
- Netflix: Regulators are likely to ask whether the deal would help tip the market toward a single streaming super‑platform, making it harder for smaller services to enter or survive, and entrenching Netflix as the default gateway for premium video.
- Paramount: Paramount can respond that its bid is explicitly designed to prevent that outcome by stitching together enough scale to stand as a fourth global player, keeping the market from consolidating into one or two dominant gatekeepers.
Data and Analytics Advantage
- Netflix: Netflix could capitalise on its already significant edge in data and analytics, allowing it to refine recommendations, advertising, and windowing in ways that smaller rivals cannot easily replicate. Antitrust agencies are increasingly attentive to whether such data-driven advantages create or reinforce bottleneck positions that make it harder for competitors to attract and retain audiences over time.
- Paramount: Paramount can argue that acquiring Warner’s data and audience insights would narrow the data gap between itself and the leading streamers, improving its ability to compete on discovery, personalisation, and targeted advertising.
Adjacent Market Competition
- Netflix: Regulators may examine whether the deal could dampen competition in adjacent or nascent markets such as advertising-supported streaming, gaming tie-ins, or sports streaming. There is growing concern in digital platform cases that big players use major acquisitions to neutralise potential future challengers before they reach meaningful scale.
- Paramount: Paramount can respond that, in these segments, the merger would actually inject a more capable challenger into the field, and that any expansion into adjacent markets would still be constrained by its relatively modest overall footprint.
Foreign Investment and National Security
- Netflix: Netflix does not carry an additional national security or foreign‑investment overhang, allowing it to present a cleaner funding story focused primarily on traditional antitrust concerns.
- Paramount: Paramount’s bid is backed by sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi alongside the Ellison family, RedBird Capital, and Jared Kushner’s Affinity Partners, and therefore introduces a national security and foreign investment dimension that may complicate regulatory approvals even as it faces a lighter antitrust burden on classic concentration metrics.
Precedents
Two prior deals that offer the closest parallels to this bidding war are:
- Disney vs. Comcast for Fox (2017–2019): Both fought over largely the same assets, and Disney repeatedly told the Fox board that its bid was less exposed to regulatory challenge than Comcast’s. The Antitrust Division ultimately approved the Disney transaction subject to divestitures, while Comcast faced concerns tied to its status as both content owner and broadband/cable gatekeeper.
- AT&T–Time Warner (2016–2018): The DoJ challenged this merger, arguing that it would give AT&T leverage to raise rivals’ costs for Time Warner content, but AT&T ultimately won in court and closed the deal (which later fed into the spin‑off of those assets into what became Warner Bros. Discovery).
The present battle echoes both: Netflix is closer to AT&T’s position as the already‑dominant distributor trying to swallow a premier content house, while Paramount is closer to Disney’s role, arguing that its deal is less threatening and aims to prevent the creation of a single streaming super‑platform.
Some other major deals we’ve been seeing in the online content space in recent years include:
- In 2023, Disney bought out Comcast’s remaining one-third stake in Hulu after an independent valuation process, fully integrating it into Disney+ by August 2025.
- In 2024, Paramount Global and Skydance Media announced a definitive agreement to merge, in a deal valued at $8 billion.
- Amazon completed its $8.45 billion acquisition of MGM in March 2022, gaining a catalogue of 4,000 films and 17,000 TV episodes.
Conclusion
This battle for Warner and the recent wave of online media and streaming deals is being driven by a number of factors: the arms race for premium content libraries, cord‑cutting and declining linear TV usage, sharply rising customer acquisition costs, and the harsh economics of scaling largely loss‑making streaming platforms worldwide.
As subscription growth plateaus and revenue models tilt toward digital and online video advertising, even the largest legacy studios and distributors are being pushed into consolidation to secure distribution reach, pricing power, and stable cash flow. This is precisely the type of environment in which specialist mergers and acquisitions (M&A) law firm advice becomes critical for navigating regulatory risk and deal execution.
In this climate, strategic control over both content and the platforms through which it is delivered has become the critical competitive moat.
In the next part of this series, we examine how the legal terms of the competing deals differ, and why those differences may matter as much as the financial terms in determining the outcome.
Authors: Shantanu Mukherjee, Varun Alase
