Netflix and Paramount are fighting over Warner Bros. Discovery. Here's
the regulatory outlook
[December 22, 2025] By
WYATTE GRANTHAM-PHILIPS
Warner Bros. Discovery is in the middle of a Hollywood tug-of-war
between Netflix and Paramount. And chances are it'll be a long, bumpy
regulatory road ahead for either buyer.
Warner’s board on Wednesday urged shareholders to back the deal it
struck with Netflix to sell its studio and streaming business for $72
billion. Meanwhile, Skydance-owned Paramount is moving forward with its
hostile $77.9 billion bid for a full takeover of the company, including
networks like CNN.
In both scenarios, a merger would likely trigger a review by the U.S.
Justice Department, which could sue to block the transaction or request
changes. But other countries and entities could challenge either
acquisition, too.
Politics are also expected to come into play under U.S. President Donald
Trump, who has made unprecedented suggestions about his personal
involvement on whether a deal will go through.
The process could drag on for more than a year, if not longer. But
regardless of who wins, new ownership of Warner properties would
drastically reshape the industry — impacting movie-making, streaming
platforms and the broader media landscape.
Here's what we know.
A look at the players
The buyout target — Warner Bros. Discovery — is a 102-year-old Hollywood
giant. It is one of the “big five” studios, producing titles ranging
from “Harry Potter” to “Superman.” And its cable operations include top
networks like CNN and Discovery. Warner also owns DC Studios and HBO
Max.
Paramount, which closed its own $8 billion merger with Skydance just
months ago, is also one of Hollywood's remaining legacy studios — with a
blockbuster lineup including “Top Gun” and “The Godfather." Beyond
traditional film and TV production, it owns networks like CBS, MTV and
Nickelodeon, as well as the Paramount+ streaming service.
For Netflix, streaming is its bread and butter, accounting for 20% of
the U.S. market for on-demand subscriptions, according to data from
streaming guide JustWatch. That compares to 13% for HBO Max and 7% for
Paramount+. But Netflix has also built up its own production arm,
rolling out popular titles like “Squid Game” and “Stranger Things.”
Netflix is the biggest of the three companies, with a market
capitalization of around $430 billion as of mid-December. Warner Bros.
Discovery is about $70 billion, while Paramount Skydance trails at
closer to $14 billion.
Regulatory hurdles for Netflix vs Paramount
Paramount has already pointed to Netflix's streaming dominance, arguing
that bringing the platform under the same roof as HBO Max would squash
competition and give it “overwhelming” market share. But Netflix has
maintained its merger will give consumers more choice, allowing it to
offer more plans and titles for customers to choose from Warner's
catalog.
Antitrust experts expect Paramount and Netflix to try to convince
regulators that they're not just up against more traditional rival
subscriptions, but broader video libraries across the internet.
YouTube is at the top of the list and Netflix is already laying the
groundwork to show Google's streaming platform dominance in terms of
viewing hours, which, according to media analytics firm Nielsen,
accounted for nearly 13% of viewership this fall compared with 8% for
Netflix.
Jim Speta, a professor at Northwestern University’s Pritzker School of
Law, expects both companies to say that a merger is “necessary for them
to compete against YouTube.”
“The broader you make the market that we’re thinking about, the less the
merger looks anti-competitive," Speta said.
Meanwhile, others will argue that either merger is bad for consumers.
While content libraries may broaden, a case could be made about a
combined company wielding its power to control prices — or adding more
subscription hoops for consumers to jump through to watch certain
titles.
Among concerns, “the range of available content on the streaming
services might decrease,” said Scott Wagner, head of antitrust practice
at law firm Bilzin Sumberg. He pointed to older movies in particular
that could potentially see shorter streaming windows across platforms.
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The Paramount Pictures water tower is seen in Los Angeles, Thursday,
Dec. 18, 2025, with the Hollywood sign in the distance. (AP
Photo/Jae C. Hong)
 Implications for studio
production and news
If successful, Paramount's takeover would combine two of Hollywood's
“big five” studios. And while Netflix has agreed to uphold Warner’s
contractual obligations for theatrical releases in its proposed
acquisition, critics are skeptical given its reliance on online
streaming.
Some trade groups have warned that consequences of either deal could
include job losses. Layoffs tied to restructuring are common
following a merger and wouldn't likely draw antitrust scrutiny, but
Speta notes competition concerns could still arise if a company
“becomes so big that it has purchasing power” and is deemed to
control wages more broadly.
For Paramount specifically, there's also the news and broader cable
landscape to consider.
Attorneys like Wagner expect the prospect of having Warner-owned CNN
and Paramount's CBS under the same roof will be brought up in the
regulatory review. But he doesn't believe it will carry the same
weight as streaming and content library questions — or become a
tipping point that will lead to the merger's demise overall.
Similar to broadening the definition of the streaming market,
advocates of the Paramount merger will probably point to wider media
offerings beyond traditional TV news, including information-sharing
on social media platforms, Warner said.
But there are also political implications around a possible CBS-CNN
combo. Under new Skydance ownership, Paramount has already taken
steps to appeal to more conservative viewers in its news operations,
notably with the installation of Free Press founder Bari Weiss as
editor-in-chief of CBS News. And if the company's takeover bid of
Warner is successful, many expect similar shifts at CNN — a network
that has long attracted ire from Trump.
Trump's potential role
Trump has been vocal about whether a buyout of Warner will go
through, and even said he would personally “be involved in that
decision.”
Speta says such a suggestion should raise alarm. While changes in
administration have caused shifts in the reach of antitrust
enforcement over the years, “presidents picking whether mergers
happen or don’t happen is completely unprecedented,” he said.
Earlier this month, Trump said Netflix’s deal “could be a problem”
because of the size of the combined market share. The Republican
president also has a close relationship with billionaire Oracle
founder Larry Ellison — the father of Paramount CEO David Ellison —
whose family trust is heavily backing the company’s bid to buy
Warner. An investment firm run by Jared Kushner, Trump's son-in-law,
was among other initial contributors to Paramount's bid, but later
backed out.
Meanwhile, Netflix has its own political connections. Trump
previously called Ted Sarandos, co-CEO of the streaming giant, a
“fantastic man” and said the two met in the Oval Office before the
proposed Warner merger was announced. And Trump has continued to
publicly lash out at Paramount over editorial decisions at CBS’ “60
Minutes."
Even without Trump's intervention, the companies could bruise
themselves as the process plays out, according to Paul Nary,
assistant professor of management at University of Pennsylvania’s
Wharton School of Business. He notes Warner Bros. Discovery has
largely unperformed for shareholders since its inception just three
years ago — and could “potentially being left in even worse shape”
if management is distracted by shuffling through a long, drawn-out
deal.
“There’s a potential for the winners curse here,” he said. “Media
and entertainment is one of those spaces where you see all of these
mega mergers — high stakes (and) big egos competing over the
glamorous assets. And so many of those deals end up failing.”
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