Ellison decries Netflix, avoids Trump questions in letter to Senate
Ellison decries Netflix, avoids Trump questions in letter to Senate
Responding to a series of questions from Sen. Cory Booker, the Paramount CEO mostly stuck to his usual talking points in advocating for his desired purchase of WBD.
Paramount Skydance has maintained steadfastly throughout its hostile takeover attempt of Warner Bros. Discovery that it has a better chance of getting a deal past government regulators than Netflix does. Instead of appearing in front of lawmakers directly to make that case, however, Paramount CEO David Ellison is content to send a letter responding to the concerns of Senator Cory Booker (D-NJ) regarding the possibility of antitrust issues in a hypothetical Paramount takeover of WBD, as well as the company’s relationship with President Donald Trump.
Key Details:
- Toe the line: In his response to Booker, Ellison repeated past arguments regarding the effect a Netflix purchase of WBD would have on competition.
- No comment: Ellison did not address several questions regarding Paramount’s relationship with the president.
- Different strategies: Netflix co-CEO Ted Sarandos opted to reply to lawmakers’ concerns in person.
The letter sent by Ellison to Sen. Booker was exclusively reported by Deadline, and was a response to a letter from Booker, written after Ellison declined to appear in-person before the Senate Judiciary antitrust subcommittee, of which Booker is the ranking member, in early February.
In his reply, Ellison covers much of the same ground that he has trodden as he tries to convince WBD shareholders to vote no on Netflix’s $72 billion offer to buy Warner’s streaming and studio businesses. Ellison says that the deal would constitute a “fundamental threat to fair competition in the entertainment industry. If permitted to proceed, the deal would consolidate an unprecedented degree of market power in the hands of a single dominant company.”
Ellison also wrote that a merger of WBD with Netflix would “extinguish” competition, whereas Paramount acquiring the company would enhance it, and lead to a more competitive pricing environment for consumers. He also derided Netflix co-CEO Ted Sarandos’ argument that Netflix is already outdone in viewership by YouTube, and therefore cannot be the unstoppable market force it is portrayed as.
“If regulators were to accept Netflix’s expansive market definition, it would effectively end any meaningful antitrust enforcement in the media and technology sectors,” Ellison wrote. “Every social media platform could claim to compete with every media service, and no transaction would ever raise concerns regardless of how concentrated a market actually became.”
Despite Sarandos’ pledge under oath that Netflix would commit to a 45-day theatrical window for movies produced by Warner Bros. studios going forward, Ellison repeated his warning that a merger would lead to WB films being put directly on the streaming service. He declined to answer whether or not a purchase of WBD by Paramount would lead to massive layoffs, as Netflix has asserted.
Ellison also did not answer questions from Booker regarding Paramount’s relationship with President Trump. Among those questions were whether or not Ellison had ever donated funds to the president, or whether there had been any discussions between the two about how a merger of Paramount and WBD could benefit Trump personally.
WBD has decided to re-open talks with Paramount, in hopes of either receiving a better offer or convincing shareholders that Paramount has no way to best Netflix’s bid. Ellison will continue to exude confidence that, whether via a new offer or his hostile takeover attempt, a deal to merge WBD and Paramount will get past regulators with ease. But his refusal to appear before lawmakers, combined with the unanswered questions in Sen. Booker’s letter, could contrast poorly with Sarandos’ willingness to address concerns in person as regulators deliberate the transaction.
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