David Ellison’s Netflix Scare Tactic Runs Into European Reality – The Hollywood Reporter

David Ellison, speaking for Paramount Skydance, has urged Warner Bros. Discovery shareholders to favor a $108 billion bid by arguing that European and U.K. competition authorities would block any Netflix takeover. In a Dec. 10 letter to WBD investors he framed the issue around Netflix’s alleged dominance in Europe — roughly a 51% share of the continent’s SVOD market — and warned regulators would focus narrowly on subscription streaming. European antitrust specialists interviewed for this report say regulators will scrutinize any deal but are more likely to impose remedies than issue an outright ban, while political dynamics in Washington and London could prove decisive.

Key Takeaways

• David Ellison’s Paramount Skydance hostile offer for Warner Bros. Discovery totals $108 billion; his Dec. 10 letter to shareholders emphasizes European regulatory risk for a Netflix bid.
• Ellison argues Netflix controls about 51% of Europe’s subscription video-on-demand (SVOD) market and that regulators would not accept Netflix’s broader “all internet-enabled video” market definition.
• European competition precedents such as Disney–21st Century Fox (2019) and Amazon–MGM (2022) were cleared after targeted remedies, not outright bans.
• Paramount’s Dec. 8 SEC filing noted an initial $1 billion commitment from Tencent that was later withdrawn; foreign sovereign funds pledged about $24 billion to the Paramount bid.
• Analysts say EU and U.K. authorities are likely to pursue Phase II probes and behavioral or structural remedies rather than prohibit a deal outright.
• The U.K. has recent national-security measures and tighter rules on foreign influence in news media that could complicate deals backed by sovereign funds.
• Political intervention from Washington — including President Trump’s Dec. 7 comment that he would be involved — raises the prospect that geopolitics, not pure competition law, could sway the outcome.

Background

The takeover fight pits Paramount Skydance, led by David Ellison, against a rival bid reportedly favored by Netflix. Ellison’s team contends that Europe’s competition authorities, including the European Commission (EC) and the U.K.’s Competition and Markets Authority (CMA), would be reluctant to allow Netflix to acquire Warner Bros. Discovery because of Netflix’s strong foothold in SVOD across many EU markets.

European regulators have a history of intervening where they find clear overlaps in services, channels or rights, but they have typically used tailored remedies rather than blanket prohibitions. Notable precedents include Disney’s 2019 purchase of 21st Century Fox — approved after Disney agreed to divest certain European factual channels — and Amazon’s acquisition of MGM in 2022, which proceeded without remedies in the EC review.

Separately, European policymakers have become more sensitive to foreign state investment in media. Recent U.K. legal changes make the government more willing to scrutinize or block deals that could give state-controlled entities influence over broadcast or news outlets. That regulatory posture matters because some backers of the Paramount bid include sovereign wealth funds and other foreign investors.

Main Event

Ellison’s December letter to WBD shareholders frames the choice as one between a faster, more certain path to closing via Paramount and an uncertain regulatory gauntlet if Netflix wins. He argues European authorities would reject Netflix’s preferred market definition that groups all internet-enabled video together and instead adopt a narrow SVOD market — where Netflix’s share is highest — increasing the risk of a blockade.

European antitrust specialists interviewed for this piece push back on the likelihood of an absolute ban. Cristina Caffarra, a consultant who has advised the EC on media mergers, says regulators historically resolve competition concerns via remedies and only rarely impose full prohibitions. She predicts Phase II investigations could be lengthy but would probably end with commitments to address specific overlaps.

Analysts also point to a separate vulnerability for the Paramount bid: its financing. Paramount disclosed in a Dec. 8 SEC filing that Tencent initially pledged $1 billion but withdrew, and that roughly $24 billion of the bidder’s backing comes from foreign sovereign wealth funds that agreed to limit governance rights to reduce scrutiny. Critics say foreign-state financing in media is politically sensitive in Europe and could invite deeper probes.

The public political dimension has sharpened in recent days. On Dec. 7 President Trump told reporters he would be “involved” in the decision over Warner Bros. Discovery’s fate, and the Ellisons have cultivated ties with the current administration. Paramount emphasizes commitments to theatrical distribution and a pledge to release over 30 films a year, contrasting that with warnings that Netflix ownership would accelerate shifts away from cinemas and U.S. production.

Analysis & Implications

From a pure competition-law perspective, EU authorities typically analyze mergers by defining the relevant product and geographic markets, identifying overlaps, and assessing whether unilateral or coordinated effects would harm consumers. Ellison’s strategy rests on persuading regulators to treat SVOD as the relevant market, which would highlight Netflix’s high share and make a case for intervention.

Yet past EC practice suggests a more granular approach: regulators look for concrete overlaps in catalogues, distribution channels, sports rights or bundling practices. The Disney–21st Century Fox and Amazon–MGM examples show the EC often negotiates divestitures or behavioral remedies rather than issuing impossible-to-implement bans, especially where global political ramifications are significant.

The U.K.’s growing emphasis on media ownership and national-security review powers introduces an additional hurdle for any bidder backed by foreign sovereign capital. Even if the EC is willing to accept remedies, London could use national tools to press for changes or block aspects tied to news or broadcasting that it views as strategic.

Finally, the growing intertwine of politics and merger control increases uncertainty. If Washington signals strong preference for one bidder, European authorities may face pressure — formal or informal — to avoid decisions that could create transatlantic friction. That dynamic raises the prospect that outcomes will be shaped as much by geopolitics as by antitrust economics.

Comparison & Data

Those precedents indicate the EC focuses on concrete overlaps rather than broad fears of consolidation. Any Netflix–WBD or Paramount–WBD transaction would almost certainly trigger in-depth (Phase II) review, which can last months and sometimes years; remedies typically target the specific products or rights that raise competitive concerns.

Reactions & Quotes

Experts and industry figures offered contrasting takes: some accept Ellison’s regulatory argument as plausible, while others see political and practical limits to a blocking decision.

“The European Commission has never blocked this kind of platform-or-studio concentration before. They’re not going to start doing it now.”

Cristina Caffarra (antitrust consultant)

Caffarra stresses that regulators prefer remedies and that Phase II inquiries, though lengthy, usually end with commitments rather than prohibitions. Her view reflects a pattern in recent high-profile media merger reviews.

“It would mean that instead of three major over-the-top players — Netflix, Amazon and Disney — there would be four, adding another competitor for them.”

Pier Silvio Berlusconi (MFE–MediaForEurope CEO)

Berlusconi, representing a large European broadcaster, welcomed a Paramount–WBD combination as a potential boost to SVOD competition in Europe, framing it as preferable to further consolidation under a global streamer.

“On the internet, there are no real barriers to entry. The fact that HBO Max was able to gain market share from Netflix shows it’s hard to argue they would be unassailable.”

Alice Enders (Enders Analysis)

Enders underscores that market dynamics — not just current shares — matter, and she cautions that foreign-state financing for Paramount could raise its own regulatory sensitivities in Europe.

Unconfirmed

• Whether the European Commission will ultimately block a Netflix acquisition of WBD outright remains unconfirmed; most experts consider a ban unlikely but not impossible.
• Reports that RedBird withdrew from earlier talks over U.K. national-security concerns are reported but the full reasoning and timing remain partially opaque.
• The extent to which President Trump’s stated personal interest will influence formal U.S. or allied regulator decisions is unconfirmed and depends on procedural and political steps yet to unfold.

Bottom Line

Ellison’s pitch to shareholders elevates a plausible regulatory narrative: by isolating SVOD as the relevant market, he seeks to persuade European authorities that a Netflix–WBD tie-up would concentrate power. That argument leverages Netflix’s roughly 51% SVOD share in Europe and recent EU digital-regulation talk to frame the Paramount offer as the safer alternative.

But historical practice at the European Commission points toward tailored remedies rather than blanket prohibitions, and analysts note that foreign-state financing and U.K. national-security rules create equally material hurdles for the Paramount bid. Political signals from Washington and London may ultimately prove as consequential as legal arguments in determining which offer — if any — clears the transatlantic gauntlet.

Sources

• The Hollywood Reporter — news report and interviews with industry and antitrust experts