Paramount Accuses Netflix of 'Scorched-Earth Campaign' as California Prepares to Block the $110 Billion Deal

Paramount Skydance's top lawyer has accused Netflix of waging a 'scorched-earth campaign' to turn regulators against its $110 billion (£82 billion) takeover of Warner Bros. Discovery, just as California and a coalition of states prepare a lawsuit that could stop the merger in its tracks.

Makan Delrahim, Paramount's chief legal officer and a former US assistant attorney general for antitrust, made the allegation in a 5 June letter to lawyers in the Department of Justice (DOJ) Antitrust Division.

He wrote that Netflix's 'panic-level response' and bid to 'poison regulators and other stakeholders' showed how seriously the streaming giant takes a combined Paramount and Warner Bros. Discovery as a competitor.

Netflix agreed to buy Warner Bros. Discovery's streaming and studio businesses in late 2025 but walked away in February after Paramount raised its all-cash offer to $31 (£23.15) per share for the entire company.

Why Paramount Says Netflix Turned the Teamsters

Delrahim's letter responded to a white paper the International Brotherhood of Teamsters filed with the DOJ in March, which urged the agency to block the deal unless Paramount accepted enforceable safeguards against job cuts. The union called the merger a 'direct threat to film and television workers nationwide', a warning that covers its nearly 15,000 motion picture members.

According to Delrahim, Netflix ran a 'proxy war' by persuading the Teamsters and other groups that Disney's 2019 takeover of 21st Century Fox slashed content output and jobs, a comparison he rejected as detached from what actually happened. He insisted the deal is 'a win for the Teamsters' because higher production volume means more crew work.

California Courts a Silicon Valley Litigator

The sharper threat may come from Sacramento. California Attorney General Rob Bonta's office met on Friday with Robert Van Nest, the trial lawyer behind Google's Supreme Court victory over Oracle and Qualcomm's appellate antitrust win, to discuss leading a state case against the merger. No final decision has been made.

Bonta, who said in April that 'red flags are everywhere when you have a merger of this type', oversees the largest state antitrust division in the US. If Van Nest signs on, he would face a Paramount legal team led by antitrust heavyweight Jeffrey Kessler alongside Delrahim.

A Lawsuit Could Land Within Weeks

A California-led coalition is preparing to sue as soon as this month, with New York, Colorado, Oregon, Nevada, Washington, Connecticut, and Tennessee among the states in talks to join. Investigators have flagged theatrical distribution, streaming, and news as the markets most at risk from the tie-up.

Paramount has quietly offered concessions to state prosecutors in a bid to head off litigation, according to people familiar with the talks. A company spokesperson said the transaction is 'pro-competitive' and would create a stronger rival to Netflix, Disney+, and Amazon's Prime Video.

What the Fight Means for Viewers and Workers

The merger would create the largest entertainment company in Hollywood history, uniting Paramount+ and HBO Max, the Paramount and Warner Bros. studios, and the CBS News and CNN newsrooms under one owner. Critics warn that fewer buyers of films and series means fewer choices, higher subscription prices, and the biggest round of layoffs since Disney swallowed Fox.

The pressure is global. The UK's Competition and Markets Authority opened a formal investigation into the deal on Tuesday, setting a 7 August deadline to decide whether a deeper probe is needed. With Paramount facing fees of roughly $6.9 million (£5.2 million) per day from October if the deal has not closed, the company accusing Netflix of panicking now finds itself racing the clock.