War for Warner Bros. Discovery has headed to Europe — here’s who has the advantage

The war for control of Warner Bros. Discovery has entered the European theater – with Paramount Skydance and Netflix launching major charm offensives with regulators who they now see as their biggest hurdle to completing a deal, On The Money has learned.

While the companies have publicly squabbled in recent days over whether the Paramount or Netflix deal is superior (and have kissed the ring of President Trump for his blessing) the action during the past two weeks has quietly shifted across the Atlantic, where regulators in the European Union and United Kingdom must also approve any acquisition of the company known as WBD, sources said. 

The major takeaway: Yes money matters, but it’s useless if you don’t get the OK from regulators. On this front, Paramount Skydance has the Old World advantage. I haven’t spoken to a single banker or lawyer who thinks that Netflix – which aims to combine its No 1 streamer with No. 3 HBO Max – will get easy approval for its $72 billion deal. Paramount, although its $78 billion deal combines two Hollywood studios, is a much lighter lift, according to media insiders.

“People think (Paramount Skydance) will have to increase the bid to win this but that’s not the feeling now,” said one person close to the company. “That doesn’t mean it won’t happen, but these guys feel this thing will be won or lost with regulators and they now have the upper hand.”

After recently making the rounds in Washington, PSKY emissaries led by RedBird Capital’s Gerry Cardinale are in London, making their case to UK regulators that Netflix’s deal is an antitrust nightmare as this piece goes to press, On The Money has learned. They’re making the same case to people working the EU regulatory framework, sources said.

Not to be outdone, Netflix is meeting with EU regulators and those in the UK this week, pressing its own argument. It’s the same pitch it has been making in DC, I am told – namely that Netflix has plenty of competition from outlets like YouTube and social media where many people now get their programming.

According to the Capitol Forum, Netflix’s deal faces highbrow skepticism in the UK. The outlet reported that “Baroness Twycross, who represents the UK government’s Department for Culture, Media and Sport in the House of Lords, on Thursday confirmed the Competition and Markets Authority will review” the Netflix deal. 

The announcement came after “Conservative peer Lord Black of Brentwood, said during a debate that the potential transaction is ‘clearly anticompetitive’ and would create ‘a virtual monopoly which would be potentially disastrous for our creative economy and for our consumers,'” according to the outlet.

Baroness? Lord? Americans may chuckle, but in the UK aristocrats still retain some stroke and are capable of giving this deal the royal treatment. Any proposal needs their approval to go forward given the complex nature of both bidders and their global operations. 

Meanwhile, as On The Money has reported, a senior Trump official has said the administration is growing wary of Netflix’s market clout. Not only will the deal face scrutiny from various agencies with DOJ antitrust at the top of the list, but Netflix as a whole might get investigated along the lines of Amazon and Google for its allegedly monopolistic business model, the source told On The Money. 

Those concerns have been weighing on its stock price, which has lost more than $160 billion in market value over the past six months, pressuring Netflix CEO Ted Sarandos to eliminate the stock portion of his offer to maintain the $27.75-a-share price tag, 

Trump, recall, has said he will be involved in the regulatory decision. He is long time friends with Larry Ellison, the tech billionaire who is bankrolling Paramount Skydance’s WBD bid. He also had a two-hour love fest meeting weeks ago with Sarandos, set up by a GOP lobbyist Netflix hired to smooth things out.

But Trump also recently posted on Truth Social an opinion piece titled “Stop The Netflix Cultural Takeover,” which bemoaned alleged progressive cultural bias in the streamer’s programming.

All of which means after their London trip, both sides will be back doing the same thing in the US, sources say.