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Paramount Tells California Officials Proposed Warner Bros. Discovery Deal Would Strengthen Theater Business

By  |  May 12, 2026
Paramount

Paramount is pushing back against potential regulatory opposition to its proposed merger with Warner Bros. Discovery, making its case directly to Rob Bonta as his office considers whether to challenge the transaction on antitrust grounds.

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    In a recent letter sent to Bonta, Paramount chief legal officer Makan Delrahim argued that combining the two companies would expand opportunities in theatrical exhibition rather than shrink them, according to Deadline. Delrahim said the merged company would need to find new ways to stand out in a crowded entertainment landscape, particularly as streaming competition continues to intensify.

    As part of that argument, Delrahim wrote, “Paramount’s proposed merger with WBD will help drive meaningful improvements for movie theaters and their audiences. To compete more effectively with Netflix, and others leading services, a combined Paramount-WBD will need to capture audiences’ attention in fresh ways, and that includes broadening theatrical distribution to tap into the magic of the moviegoing experience and create momentum behind films before they reach streaming services.”

    Per Deadline, the letter framed theatrical releases as a strategic necessity for the combined business, not an expendable part of its distribution model. Delrahim added that the company “will have every incentive to get more films into wider distribution on more movie theater screens—it is how it will compete for audiences across the entertainment ecosystem.”

    Related: Subscribers Sue to Challenge Proposed Paramount-Skydance and Warner Bros. Merger

    The filing also highlighted commitments made by Paramount leadership as regulators examine the deal. According to Deadline, Paramount CEO David Ellison has committed to a slate of 30 theatrical releases each year, with each film receiving at least a 45-day run in cinemas before heading to streaming platforms. Delrahim reinforced that approach in the letter, writing, “That pledge makes sense: theaters are a core part of the combined firm’s strategy to drive engagement both on and off the big screen.”

    Beyond theatrical distribution, Paramount used the letter to argue that scale is increasingly essential in streaming. Per Deadline, Delrahim pointed to market share data showing Paramount with 5.8% of U.S. subscription streaming viewership and Warner Bros.

    Discovery with 5.0%, far behind the largest platforms.
    He wrote, “By comparison, the top three streaming subscription platforms together capture 65% of all U.S. SVOD viewers—Netflix with 32.5%, Disney 16.7%, and Amazon 15.3%. Absent something transformative, neither party is positioned to grow to a scale where they would catch up to the leading streamers.”

    California officials have not publicly indicated whether they intend to move forward with legal action, but the merger continues to face close scrutiny as regulators assess its impact across film, television, and streaming.

    Source: Deadline