Netflix deal faces scrutiny beyond the United States
The future of Warner Bros. Discovery could hinge on the view of European regulators toward Netflix, adding an unexpected international dimension to a deal centered on American media assets. Warner Bros. Discovery has agreed to sell its movie studio and streaming business to Netflix for $27.75 per share, while spinning off its cable networks into a separate publicly traded company, Discovery Global.
The transaction would leave major U.S. sports rights, including March Madness, Major League Baseball, the NHL and NASCAR, outside Netflix’s control. Those assets would remain with Discovery Global if the Netflix deal is approved.
Competing bid from Paramount complicates the picture
A rival takeover attempt by Paramount Skydance has added pressure. Paramount has offered $30 per share for all of Warner Bros. Discovery, including its cable networks and sports rights. The offer was rejected by the WBD board, but Paramount has taken the bid directly to shareholders and recently extended its tender deadline.
Warner Bros. Discovery said fewer than 7% of shareholders have tendered shares so far, signaling limited support for the Paramount proposal. The company maintains that its agreement with Netflix offers superior value and regulatory certainty.
Europe emerges as the key regulatory battleground
While much attention has focused on potential U.S. antitrust concerns, European approval may prove decisive. Netflix generates roughly 32% of its revenue from Europe, the Middle East and Africa, placing the deal firmly within the scope of EU competition regulators.
Warner Bros. Discovery believes there is a high likelihood Europe will approve the transaction, possibly with conditions such as commitments to local content production and theatrical releases. EU rules already require streaming platforms to ensure at least 30% of their content qualifies as European works.
Paramount bets on tougher EU stance toward Big Tech
Paramount executives reportedly believe European regulators will be more hostile toward Netflix, citing the EU’s aggressive antitrust posture toward major technology companies. Past interventions involving Meta, Google and Apple reinforce the perception that Europe may seek to limit further market concentration by global streaming giants.
European cinema groups have also voiced concern over a Netflix-Warner combination, arguing it could undermine traditional theatrical distribution. Netflix executives have responded by reiterating their commitment to theatrical releases with a standard 45-day window.
Board confidence and strategic risks
The Warner Bros. Discovery board has concluded that both the Netflix deal and the Paramount offer are capable of securing regulatory approval, though it views a merger of two major studios as a larger hurdle than a streaming-focused transaction.
Executives have also raised concerns about Paramount’s financial capacity to sustain high levels of movie production while servicing significant debt. Netflix’s revised all-cash offer is seen as simplifying approval and accelerating a shareholder vote, potentially as early as March.
As regulators weigh their decisions, the outcome in Europe could ultimately determine whether Warner Bros. Discovery aligns its future with Netflix, Paramount, or remains independent.
