Another interesting development has come up regarding the sale of Warner Bros. Discovery. Paramount has been the top candidate to acquire the studio so far, having submitted three separate bids. However, companies that had been initially only talked about as merely being interested in a potential deal, now seem to be serious potential buyers. In October, for example, it was reported that Netflix had secured a financial advisor to come up with an offer for the studio. Yet, Paramount is still not out of the running, as given the information available so far, CEO David Ellison is determined to acquire the studio.
A merger between WBD-Paramount has led to speculation regarding potential antitrust concerns. Now, according to a new report, the deal does have the potential to trigger antitrust safeguards. TheWrap published a piece on morale around the industry given the impending merger. The article cited a September 2025 report by the Columbia Journal of Law and the Arts, "A Paramount Test," which broke down the potential antitrust issues that could arise from a Paramount-WBD merger.
For context, the way that the legality of a merger is determined is by examining how concentrated a market would become following the acquisition. There are two important factors to consider in order to determine this. The first one is market-share percentage. When it comes to mergers, there's a percentage threshold in place to prevent two merged companies from creating an excessively large market share.
Per the 2023 Merger Guidelines of the US Antitrust Division, the Supreme Court stated that, “A merger which produces a firm controlling an undue percentage share of the relevant market, and results in a significant increase in the concentration of firms in that market[,] is so inherently likely to lessen competition substantially that it must be enjoined in the absence of [rebuttal] evidence.”
Mergers that cross the 30% market share threshold trigger a presumption of illegality, as established in section 7 of the Clayton Antitrust Act (via TheWrap). According to the outlet, Warner Bros. Discovery's domestic market share is of approximately 26.9%, while Paramount's is estimated to be 6.3%. Adding them up, their combined market share would be of 33.2%. The extra 3.2% could, theoretically, trigger a presumption of illegality for the deal. However, it's important to note that market share fluctuates year to year, so the numbers reported here are likely to change over time.
As stated in the aforementioned merger guidelines of 2023: "A merger that creates a firm with a share over thirty percent is also presumed to substantially lessen competition or tend to create a monopoly if it also involves an increase in HHI of more than 100 points."
As referenced in the quote above, the second determining factor for merger legality is an index known as the Herfindahl-Hirschman Index (also identified as HHI). According to the US Antitrust Division, the HHI is "the sum of the squares of the market share; it is small when there are many small firms, and grows larger as the market becomes more concentrated, reaching 10,000 in a market with a single firm."
Essentially, a large HHI means a smaller number of companies are controlling a large share of the market. The smaller the HHI, the less concentrated the market. The larger, the more concentrated it is. The latter is not an ideal outcome. For context, a highly concentrated industry is one with an HHI of 1,800, and, as reported by the Columbia Journal, the theatrical distribution market is at an estimated 1,758 HHI.
The Journal calculated that a WBD-Paramount merger would lead to an approximate 365-point increase in the industry's HHI (as stated in the US Antitrust Division's merger guidelines, an increase of 100 points is considered significant). This would mean that, post-merger, the theatrical distribution industry's HHI could rise to 2,123. A merger that surpasses that threshold is considered to lessen competition considerably, as laid out in the US merger guidelines:
"A merger that creates or further consolidates a highly concentrated market that involves an increase in the HHI of more than 100 points is presumed to substantially lessen competition or tend to create a monopoly."
Adding to the complex nature of a merger between the two companies is the fact that their business overlap extends beyond the distribution market—there is also streaming and news media. The news media factor is mentioned as a concern by the Columbia Journal, given that, if a merger were to happen, CBS News (Paramount) and CNN (Warner Bros. Discovery) would fall under the same roof. This, the Journal believes, would lead to an "unprecedented concentration in national television news."