One of the most significant mergers in Hollywood history may have cleared federal antitrust review — a week before it was even announced.
On Feb. 20, Paramount declared that its deal for Warner Bros. Discovery had passed the statutory waiting period that enables the Department of Justice to preemptively block mergers. Paramount’s chief legal officer, Makan Delrahim, was looking to expedite the process should Netflix’s offer fall through — which it did on Thursday.
“It is unusual and remarkably creative and clever to try to complete your merger review with the federal government before you’ve even secured a deal,” said Lee Hepner, senior legal counsel at the American Economic Liberties Project. “He’s really shortened the window for a challenge after the merger is approved.”
Though the Department of Justice could still seek to intervene, as a practical matter the process may now be in the hands of state attorneys general. Rob Bonta, the California attorney general, promised a “vigorous” investigation on Thursday, warning that the transaction “is not a done deal.”
State AGs have less resources than the DOJ does to pursue major cases, but they could pool their efforts in a bid to block the deal.
“It is quite common for the attorney generals to create a coalition of the willing who could bring this case,” said Spencer Weber Waller, an antitrust professor at Loyola University Chicago. “The states are getting good at this. They have built a very consistent track record of opposing deals on conventional antitrust theories.”
Netflix’s deal to buy Warner Bros. Discovery raised antitrust alarms due to its dominant position in streaming. Paramount does not have nearly the same scale in the streaming marketplace — but it is a major supplier of films and TV shows. Consolidating with Warner Bros. Discovery could raise concerns for creatives, who will have fewer places to sell to, and for theaters, which could end up with fewer films to show.
“There seems to be less pushback and less concern over Paramount’s acquisition than Netflix’s,” said Jennifer Dixton, a former assistant chief in the DOJ Antitrust Division who now teaches at UCLA. “There may be still some hurdles that Paramount will have to go over before the deal is cleared. I don’t know it’s completely in the clear.”
Warner Bros. CEO David Zaslav told employees Friday that the deal would likely take six to 12 months to close. The transaction will face scrutiny in the U.K. and the European Union, though those jurisdictions would be more likely to impose conditions rather than try to block it outright.
In 2019, a coalition of state attorneys general tried to block the T-Mobile merger with Sprint. That effort ended in a settlement that allowed the deal to go forward with certain protections for consumers and employees. A group of states worked with the Federal Trade Commission to block the merger of Kroger and Albertsons in 2024.
If the states were to pursue a similar course in the case of Paramount and Warner Bros. Discovery, they may end up doing it without federal support. Matt Stoller, director of research at the American Economic Liberties Project, argued that while that might have been a major obstacle before, it is less of one now.
“The federal government doesn’t have a lot of credibility,” he said. “This is obviously corrupt. It’s ridiculous. At the very least, if the federal government allows them to close it really quickly, it shows that the fix is in.”
