Europe Unlikely to Block Netflix or Paramount in Warner Bros. Discovery Takeover Battle

A high-stakes battle for Warner Bros. Discovery is testing global regulators. Two competing bids have emerged for the media giant. Paramount-Skydance and Netflix are the leading contenders. The outcome hinges on regulatory approval in the U.S. and Europe.

Paramount argues its $108 billion bid faces fewer hurdles. It claims European regulators would block Netflix. Netflix’s dominance in European streaming is the core of their argument. This sets the stage for a complex regulatory review.

Paramount’s Case Against Netflix in Europe

David Ellison leads the Paramount-Skydance consortium. He detailed his case to shareholders in a recent letter. He called a Netflix purchase a “blatant attempt” to eliminate a competitor. The target is HBO Max, a key Netflix rival internationally.

Ellison points to Netflix’s market share in Europe. It holds roughly 51 percent of the subscription video market. He believes EU regulators will focus narrowly on this sector. Laws like the Digital Markets Act could be triggered. The Hollywood Reporter covered this regulatory debate.

Expert Analysis Suggests Both Deals Could Pass

Most European antitrust experts see a different path. They believe neither deal is likely to be stopped outright. Cristina Caffarra is a leading merger advisor. She notes the European Commission has never blocked a similar media merger. The process would be long but would likely end with conditions.

History supports this view. Disney’s purchase of Fox cleared the EC after selling some channels. Amazon‘s buyout of MGM passed unconditionally. Regulators look for specific overlaps, not broad consolidation fears.

Some European broadcasters prefer a Paramount victory. Pier Silvio Berlusconi leads MFE-MediaForEurope. He argues a Paramount-Warners merger would create a stronger fourth competitor. This could balance power against Netflix, Amazon, and Disney.

Market share itself is a disputed point. Alice Enders of Enders Analysis provided insight. She noted high share does not automatically mean regulatory blockage. Low barriers to entry on the internet change the calculus. HBO Max already gained share from Netflix, proving competition exists.

Political and Foreign Investment Hurdles Emerge

Paramount’s bid carries its own potential problems. It is backed by foreign sovereign wealth funds. Money comes from Saudi Arabia, Qatar, and Abu Dhabi. European nations are wary of foreign state investment in broadcast media. This scrutiny could be intense in the United Kingdom.

The UK has tightened rules on foreign media control. These laws recently affected other deals. Paramount acknowledged these concerns in a regulatory filing. Chinese giant Tencent dropped its backing over U.S. foreign investment fears.

Ultimately, politics may override regulatory concerns. The U.S. President has indicated he will be involved in the final decision. The Ellison family has aligned itself politically with the current administration. This political backing could be decisive, influencing regulators on both sides of the Atlantic.

Experts suggest Europe will follow Washington’s lead. The European Commission is politically independent in theory. In practice, it avoids major clashes with the U.S. administration. The final decision may reflect political will more than antitrust law.

The fight for Warner Bros. Discovery is entering a critical phase. Regulatory arguments in Europe are complex but may not be decisive. The final Warner Bros. Discovery takeover will likely be shaped more in Washington than in Brussels.

Thought you’d like to know

Q1: Who is trying to buy Warner Bros. Discovery?

Two main contenders have emerged. The first is a consortium led by Paramount and Skydance. The second is the global streaming leader, Netflix. Both have made multi-billion dollar offers for the media company.

Q2: Why does Paramount say Netflix would be blocked?

Paramount argues Netflix has too much market power in Europe. It holds over half of the subscription streaming market there. Buying Warner and HBO Max would eliminate a major competitor, which regulators might reject.

Q3: What do European antitrust experts say?

Most experts believe both deals could pass review. The European Commission typically imposes conditions instead of blocking deals. Historical deals, like Disney-Fox, were approved after minor divestments.

Q4: What is a major hurdle for the Paramount bid?

Its funding comes from foreign sovereign wealth funds. European regulators are sensitive to state investment in media. This could lead to a deeper, more politically charged investigation.

Q5: How important is U.S. politics in this deal?

It may be the most important factor. The President has stated he will be involved. Paramount’s backers have aligned with the current administration, which could sway the ultimate outcome.