Streaming – US Regulators Review Warner Bros. Sale Impact
Streaming – The US Department of Justice has begun consulting major cinema chains as part of its review of a proposed sale involving Warner Bros. Discovery, according to individuals familiar with the discussions.
The department’s antitrust division is seeking insight into how a potential acquisition could affect audiences and the broader film industry. Officials are examining whether the deal might alter the number of movies released in theaters and whether it could influence competition within the entertainment market. Those briefed on the matter requested anonymity due to the confidential nature of the meetings.
Antitrust Review Expands to Theater Operators
As part of standard merger evaluation procedures, government lawyers have reached out to leading exhibitors to understand how a change in ownership could reshape film distribution. Such outreach is common practice under Justice Department guidelines, particularly in transactions involving large media companies. A spokesperson for the department declined to comment on the ongoing review.
While streaming market concentration is a central focus, regulators are also assessing the implications for traditional cinema releases. Warner Bros. has long maintained a strong theatrical presence, and any shift in strategy could have ripple effects across the industry.
Competing Bids Raise Different Concerns
Warner Bros. has agreed to sell its studio operations and HBO Max streaming platform to Netflix Inc.. However, earlier this week, the company indicated it would resume discussions regarding a possible acquisition by Paramount Skydance Corp., presenting regulators and industry stakeholders with two distinct scenarios.
Critics of a Netflix takeover point to the company’s historical approach to theatrical releases. The streaming giant has traditionally opted for limited theatrical runs before moving films to its platform. Although Netflix Co-CEO Ted Sarandos has pledged to provide a 45-day exclusive window in cinemas for Warner Bros. titles, some theater executives remain cautious.
Sarandos recently met with several cinema chain leaders in Los Angeles to address concerns and emphasize Netflix’s commitment to theatrical distribution. In a statement, Netflix argued that a merger between Paramount and Warner Bros. would unite two major Hollywood studios, potentially reshaping competition in the film production and distribution space.
Paramount Highlights Theatrical Commitment
Paramount executives have positioned their bid as more favorable for consumers and the theatrical market. Chief Executive Officer David Ellison wrote in a February 11 letter to US Senator Cory Booker that a Netflix acquisition could weaken competitive dynamics rather than enhance them.
Filmmaker James Cameron, known for directing Titanic for Paramount, has publicly expressed support for Paramount’s bid. He warned that a sale to Netflix could harm cinema culture, reflecting concerns shared by several industry veterans.
Paramount has emphasized its longstanding relationship with theater operators and pledged to release up to 30 films annually in cinemas if it secures Warner Bros. The company argues that maintaining a strong theatrical slate is essential for sustaining box office performance and audience engagement.
Industry Groups Voice Apprehension
Trade association Cinema United, which represents chains including AMC Entertainment Holdings and Regal Cineworld Group, has described both potential outcomes as deeply consequential for the industry. While the group previously labeled a Netflix acquisition “culturally catastrophic,” it has also cautioned that a Paramount deal would carry significant implications.
During a recent private discussion organized by the Global Cinema Federation, some theater executives reportedly voiced support for Paramount’s proposal, citing its traditional studio model and commitment to theatrical releases.
Still, skepticism remains. Sean Gamble, chief executive of Cinemark Holdings, told investors this week that he remains uneasy about Netflix’s assurances. He said exhibitors are seeking firm, long-term guarantees not only on the theatrical window but also on sustained marketing investment and film production levels.
As regulators continue their evaluation, the outcome of the Warner Bros. sale is poised to influence both streaming competition and the future of cinema exhibition in the United States.