WBD-Paramount Deal Sets Up Partisan Regulatory Fight

CBS Sports parent company Paramount, now in line to acquire all of Warner Bros. Discovery, is staring down what could be a lengthy, combative, highly political, and uncertain regulatory approval process to complete the historic, $111 billion transaction. 

After Netflix walked away late Thursday from its deal to buy WBD’s studios and streaming businesses, Paramount is set to complete its own agreement for all of the TNT Sports parent company. The WBD board will approve the new deal in the coming days, and a new shareholder vote will be scheduled to replace the March 20 one that had been scheduled to vote on the now-aborted Netflix deal. 

All of that will kick off what will be a contentious approval path for the deal. Already, many political leaders, particularly Democrats, are lining up to combat what they see as a highly improper concentration of media power within the billionaire Ellison family that leads Paramount. If the agreement goes through, the Ellisons and Paramount will collectively control a vast media empire that will include CBS, TNT, the respective sports holdings of those two networks, CNN, HBO, Comedy Central, Warner Bros. Studios, Paramount Pictures, part of TikTok, and a range of other holdings.

Within sports alone, the combined holdings of Paramount and WBD will span the NFL, MLB, March Madness and a host of other major college sports rights, the NHL, UFC, and many other properties.

“A Paramount Skydance-Warner Bros. merger is an antitrust disaster threatening higher prices and fewer choices for American families,” said Sen. Elizabeth Warren (D., Mass.). “A handful of Trump-aligned billionaires are trying to seize control of what you watch and charge you whatever price they want. With a cloud of corruption looming over Trump’s Department of Justice, it’ll be up to the American people to speak up and state attorneys general to enforce the law.”

One prominent such attorney general—California’s Robert Bonta—has already said he intends to do that.

“Paramount/Warner Bros. is not a done deal,” Bonta said. “These two Hollywood titans have not cleared regulatory scrutiny—the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”

On the political right, 11 Republican state attorneys general made a very similar argument earlier this week against Netflix, also citing the forthcoming market concentration in that deal in a letter to U.S. Attorney General Pam Bondi before their complaint became moot. 

As a result, the forthcoming review process for Paramount will likely be viewed through a highly partisan lens. Already, the company has fostered close ties with the Trump Administration, to the point where it is set to show a UFC event that will be staged on the White House grounds. Because of that, Warren said that the Paramount-WBD deal “looks like crony capitalism with the president corrupting the merger process in favor of the billionaire Ellison family,” and she’s not alone in that sentiment. 

“What was true for Netflix is still true now for Paramount,” Sen. Adam Schiff (D., Calif.) said. “The merger of two of Hollywood’s biggest studios must be subject to the highest levels of scrutiny, free from White House political influence, to determine its impact on American jobs, freedom of speech, and the future of one of our nation’s greatest exports.”

Stock Effects

The outcome of the deal, meanwhile, showed strong and immediate reaction among investors on multiple fronts. Shares of Netflix, which had been sharply down in recent months and prompted the streaming giant to convert to an all-cash bid, jumped nearly 9% in early Friday trading. Investors had grown increasingly wary of what they saw as an overpay by Netflix in the $83 billion deal, and were relieved by the streamer’s early exit. 

WBD stock, which has more than doubled in the last six months as the sales saga has continued, fell by nearly 2%. Paramount shares also surged, rising by more than 9% and somewhat reversing a nearly 50% drop since late September.