The “Scorched-Earth” Letter: Paramount Blasts Netflix and Pushes Back on Teamsters in DOJ Merger Fight

 

 The “Scorched-Earth” Letter: Paramount Blasts Netflix and Pushes Back on Teamsters in DOJ Merger Fight

**Subtitle:** *From a “panic-level response” to a $6 billion synergy target, the battle for Warner Bros. is now a three-front war. Here is why David Ellison’s legal chief is accusing the streamer of trying to “poison” regulators.*

**Reading Time:** 8 Minutes | **Category:** Business & Entertainment

## Introduction: The Letter That Escalated the War

The battle for Warner Bros. Discovery has always been about money: $110 billion, to be precise. It has been about ego: David Ellison versus Ted Sarandos. And it has been about the future of streaming: HBO Max versus Netflix.

But on Tuesday, June 9, 2026, the war entered a new phase. It is now about **ethics**.

In a blistering letter sent to the U.S. Department of Justice, Paramount Skydance’s chief legal officer, Makan Delrahim, accused Netflix of launching a “scorched-earth campaign” against the proposed acquisition of Warner Bros. Discovery .

The letter—first reported by POLITICO —claims that Netflix has attempted to “poison regulators and other stakeholders against” the now-$110 billion deal . Delrahim alleges that Netflix’s “panic-level response” demonstrated “just how seriously Netflix takes Paramount as a scaled competitor” .

The timing is no accident. The letter, dated June 5, was a direct response to a March report filed by the International Brotherhood of Teamsters, in which the union argued to the DOJ that Ellison’s company posed “a direct threat to film and television workers nationwide” .

The Teamsters, which represents roughly 15,000 behind-the-scenes workers (drivers, location managers, and other crew), has urged the DOJ to sue to block the merger unless “substantial and enforceable safeguards are put in place to increase domestic production and protect jobs” .

Paramount is fighting back on two fronts. On one side, it is trying to discredit Netflix as a bad-faith actor. On the other, it is trying to reassure the DOJ—and the unions—that the merger will create *more* jobs, not fewer .

In this deep-dive, we will decode the “scorched-earth” accusation, break down the Teamsters’ very real fears about the Disney-Fox precedent, and analyze whether Delrahim’s argument—that the merger is necessary to “take on Netflix”—will hold water with antitrust regulators.

> **The Bottom Line Up Front:** This is not just a corporate merger. It is a referendum on the future of Hollywood labor. Paramount is betting that the DOJ will care more about competition with Netflix than about protecting 15,000 Teamster jobs. But with state attorneys general also circling, the outcome is far from certain.

## Part 1: The “Scorched-Earth” Accusation – Why Paramount Is Blaming Netflix

In the letter, Delrahim—a former head of the DOJ’s Antitrust Division during Trump’s first term—did not hold back.

### The “Panic-Level Response”

“Netflix has launched a scorched-earth campaign to poison regulators and other stakeholders against the transaction,” Delrahim wrote .

He claimed that Netflix’s reaction to Paramount’s winning bid showed “just how seriously Netflix takes Paramount as a scaled competitor” . In other words, Paramount is arguing that Netflix isn't opposing the merger out of genuine concern for workers or competition—it’s opposing it because it is *scared* of a rival that can finally match its scale.

Delrahim pointed to a specific incident in January, when Netflix still had a potential deal in place to acquire Warner Bros. At that time, he told a House subcommittee that the Netflix merger was “clearly anticompetitive, and not a close call” .

The hypocrisy, from Paramount’s perspective, is rich. Netflix was willing to consolidate the industry when it was the buyer. Now that Paramount is the buyer, Netflix is screaming about the dangers of consolidation.

### The Teamsters Connection

The letter was specifically addressed to concerns raised by the Teamsters in March. The union warned that the merger of two of the “Big Five” studios would lead to job losses, citing the Disney-Fox merger as a cautionary tale .

But Delrahim argued that the Teamsters’ concerns were being stoked by Netflix.

He alleged that Netflix “has tried to persuade the Teamsters and other stakeholders that Disney’s acquisition of Fox had a negative impact on content production and labor opportunities” .

In other words, Delrahim is claiming that Netflix is using the Teamsters as a proxy to wage war on a competitor.

**The Human Touch:** For the Teamsters, the accusation is insulting. They are not puppets. They are workers who have seen their hours drop 36% since 2022 , and they are terrified that a merger of two major studios will mean less work for grips, drivers, and set decorators. Whether Netflix is whispering in their ear or not, the fear is real.

## Part 2: The Teamsters’ Warning – The Disney-Fox Ghost

To understand the union’s opposition, you have to look at the Disney-Fox merger of 2019.

### The $71 Billion Precedent

When Disney acquired 21st Century Fox for $71 billion, the promise was that the combined entity would create “synergies” and “efficiencies.” For Wall Street, it was a success.

For workers, it was a disaster.

- **Production units were eliminated:** Fox’s independent film divisions were shut down.

- **Significant job losses occurred:** Thousands of behind-the-scenes workers were laid off.

- **Projects were canceled:** Dozens of films and TV shows in development were scrapped .

The Teamsters argue that the Paramount-Warner merger would repeat that pattern .

“We’ve seen what happens when corporations consolidate power: jobs disappear, production leaves American communities, and workers pay the price,” Teamsters President Sean M. O’Brien said .

### The 6,000-Job Fear

Paramount has already announced that it expects **$6 billion in “synergies”** within three years of the deal closing . The company has tried to reassure workers that the “majority of our synergy target comes from non-labor sources” .

But the Teamsters are not buying it. In their experience, “synergies” always means layoffs.

### The 15,000 Workers

The union represents roughly **15,000 rank-and-file Motion Picture Teamsters** : drivers, location managers, casting directors, and other behind-the-scenes professionals .

“The film and television industry has been in a fragile and fluctuating state for the last several years and entertainment workers are simply trying to survive through that instability,” said Lindsay Dougherty, director of the Teamsters’ motion picture division . “Another mega-merger is the last thing this industry needs.”

**The Human Touch:** For the location manager who has worked on Warner Bros. lots for 20 years, the merger is not an abstraction. It is a pink slip waiting to happen. The Teamsters are not fighting for ideology. They are fighting for their members’ mortgages.

## Part 3: Paramount’s Defense – “30 Movies a Year” and the Netflix Boogeyman

Paramount has a two-pronged defense: one economic, one emotional.

### The Economic Defense: “More Content, Not Less”

Paramount has repeatedly promised that the combined studio will release at least **30 movies a year** —15 from Paramount, 15 from Warner .

“More films and series in production means more call sheets, more location days, more transportation, casting, and catering work,” Delrahim wrote .

He argued that the Disney-Fox comparison is invalid because Disney *reduced* output after the merger, while Paramount plans to *increase* it.

“Disney has increased spending on producing content overall since its purchase of 20th Century,” he wrote, arguing that any slowdown in Fox’s output was due to the COVID-19 pandemic, not the merger .

### The Emotional Defense: “Netflix Is the Real Enemy”

The second pillar of Paramount’s defense is aimed directly at regulators.

“Paramount wants to combine with WBD to create a stronger, more efficient competitor that will operate at scale and **take on Netflix and the other streaming giants**,” Delrahim wrote .

The argument is simple: If the DOJ blocks the merger, Netflix wins. Netflix already has 325 million subscribers . The combined HBO Max-Paramount+ service would have about 200 million subscribers—still far behind Netflix, but close enough to compete .

Paramount is framing the merger not as a grab for power, but as a **necessary act of self-defense**.

“As Paramount pushes forward with its ‘content-first’ growth strategy, firms like Netflix, Amazon MGM, Disney, Universal, Sony, Lionsgate, A24, Apple, and many others will need to respond in kind,” Delrahim wrote .

**The Human Touch:** For the antitrust regulator, the “Netflix threat” is a compelling argument. The streaming market is already dominated by one giant. Allowing two mid-tier players to merge creates a viable competitor. Blocking the merger entrenches Netflix’s dominance. That is not the outcome antitrust law is designed to achieve.

## Part 4: The Legal Landscape – The DOJ, The States, and The Clock

Paramount is facing scrutiny on multiple fronts.

### The DOJ’s Position

The company has already cleared the initial waiting period under the Hart-Scott-Rodino Act . But the DOJ can still challenge the merger at any time .

The hiring of Makan Delrahim—a former DOJ antitrust chief—was a strategic move designed to smooth the path . He knows the regulators, and he knows the process.

### The State Threat

The bigger threat may come from state attorneys general. A coalition of at least 10 states, led by California AG Rob Bonta, is preparing a lawsuit to block the merger .

Bonta has been blunt: “Red flags are everywhere when you have a merger of this type” .

If the states sue, they can seek an injunction that freezes the deal for months—or years.

### The Ticking Clock

Paramount faces a “ticking fee” of roughly **$6.9 million per day** starting in October if the deal has not closed . A prolonged legal battle could make the merger financially untenable.

| Hurdle | Status | Timeline |

| :--- | :--- | :--- |

| **DOJ Review** | Initial period expired | Can still sue |

| **State AG Lawsuit** | Preparing to file | Imminent |

| **Teamsters Opposition** | Filed March 2026 | Ongoing |

| **Ticking Fee** | Begins October 2026 | $6.9M/day |

**The Human Touch:** For the bankers and lawyers working on the deal, the ticking fee is a powerful incentive to close quickly. For the regulators, it is a source of leverage. The longer they delay, the more pressure builds on Paramount to make concessions.

## Part 5: What This Means for Hollywood – The “Fourth Place” Streamer

If the deal closes, the entertainment landscape will change dramatically.

### The Streamer Math

- **Paramount+** currently has roughly 70 million subscribers.

- **HBO Max** has roughly 100 million subscribers.

- **Combined:** Approximately 170-200 million subscribers .

That would make the combined service the **fourth-largest streamer** in the world, behind Netflix (325M), Disney+ (180-200M), and Amazon Prime (200M+) .

### The Theatrical Impact

The combined studio would control two of the “Big Five” Hollywood studios (Paramount and Warner Bros.). It would produce roughly 30 films per year .

That would make it a massive player in the theatrical market, rivaling Disney and Universal.

### The Labor Impact

The Teamsters fear that the combined studio will reduce production. Paramount insists it will increase production.

The truth will depend on whether the $6 billion in “synergies” comes from layoffs or from operational efficiencies .

**The Human Touch:** For the aspiring screenwriter, the merger is a double-edged sword. One less buyer means less competition for scripts. But a stronger competitor to Netflix means a healthier overall ecosystem. The outcome is uncertain.

## Frequently Asked Questions (FAQ)

**Q: What did Paramount accuse Netflix of doing?**

A: Paramount accused Netflix of launching a “scorched-earth campaign” to “poison regulators and other stakeholders against” the $110 billion merger. Paramount claims Netflix is trying to block the deal out of fear, not genuine concern for workers .

**Q: Why are the Teamsters opposing the merger?**

A: The Teamsters, which represent 15,000 behind-the-scenes workers, fear the merger will lead to job losses, citing the Disney-Fox merger as a precedent where production units were eliminated and workers were laid off .

**Q: Will the merger create more movies or fewer?**

A: Paramount has promised to release **30 movies per year** (15 from each studio). Critics argue that “synergies” often lead to reduced output, but Paramount insists its “content-first” strategy requires increasing production .

**Q: What is the “ticking fee”?**

A: Paramount agreed to pay shareholders a fee starting in October 2026 if the deal has not closed. Those fees add up to roughly **$6.9 million per day** .

**Q: Is the DOJ going to block the merger?**

A: The DOJ has cleared the initial waiting period but can still sue. The bigger threat is a lawsuit from state attorneys general, led by California AG Rob Bonta .

**Q: Who is Makan Delrahim?**

A: He is Paramount’s chief legal officer and a former head of the DOJ’s Antitrust Division during Trump’s first term. He is a key strategist in the merger fight .

## Conclusion: The Three-Front War

We started this article with a letter. We end with a war.

Paramount is fighting on three fronts: against Netflix (the competitor), against the Teamsters (the workers), and against the regulators (the government). Each front requires a different argument. Each argument carries a different risk.

**For the Investor:**

The stock price gap between the deal value and the trading price represents the market’s assessment of regulatory risk. That gap could widen significantly if the states file their lawsuit.

**For the Worker:**

The Teamsters are fighting for your job. Whether you agree with their tactics or not, their fear is real. The Disney-Fox precedent is not theoretical. It is personal.

**For the Movie Fan:**

A merger means fewer studios, which could mean fewer risks and more sequels. But a stronger competitor to Netflix could mean more investment in content. The outcome is uncertain.

**The Bottom Line:**

The “scorched-earth” letter is a sign of desperation. Paramount knows that the merger is not a sure thing. It is fighting for its life.

The Teamsters are fighting for theirs. And Netflix is fighting to maintain its dominance.

The outcome will determine the future of Hollywood—and the future of the 15,000 workers who make it run.

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**#Paramount #WarnerBros #Netflix #Teamsters #Merger #Hollywood #Antitrust #DOJ**

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*Disclaimer: This article is for informational purposes only. It does not constitute legal advice. Merger proceedings are fluid and subject to change.*