Makan Delrahim (CLO of Paramount Skydance) sent a letter to Californian Attorney General about company itself still defend their deal to acquire Warner Bros Discovery since May 7 because in which Delrahim “reiterated our continued commitment and support to Californian movie theaters and audiences” which coming “in response to certain misinformation about the marketplace expressed in recent public commentary.” he argued that Paramount Skydance and WBD together will “drive meaningful improvements for movie theaters and their audiences” and he reiterated Ellison’s commitment that the merged company will release at least 30 films per year. By in addition, Delrahim said that Paramount+ and HBO Max separately do not have the scale to “compete effectively” against bigger subscription streaming players Netflix, Disney+ and Hulu, and Amazon’s Prime Video. which Both Paramount+ and HBO Max had “lack the scale to compete effectively against the leading SVODs [subscription video-on-demand services], Absent something transformative, neither party is positioned to grow to a scale where they would catch up to the leading streamers.” meaning it was citing that estimates by Nielsen back in December last year when Paramount had only 5.8% of U.S. subscription VOD viewership, and Warner Bros. Discovery had 5% Delrahim downplayed the market power of the companies’ movie studios if they were consolidated. “Paramount’s relationship with theater operators will not materially change after the merger,” he maintained. “Combined, Paramount Skydance and WBD only represent about 25% of the domestic box office, with at least a half dozen other distributors competing to show their films in theaters” including Disney, Universal, Sony, Amazon MGM Studios and Lionsgate. The 25% market share estimate is based on domestic box office grosses for 4,000 films over the past five years as compiled by OpusData, which Delrahim did said about it: “In this environment, Paramount must continue to compete aggressively to find outlets for its films, with many other substitutes available for theaters to fill their screens,” However, Delrahim said Paramount Skydance-WBD deal was not comparable to Disney-Fox deal which he said: “Paramount’s motivation for acquiring WBD, in contrast, is maximizing output across the entertainment ecosystem (including theatrical release) to compete more effectively with much larger competitors in Netflix, Disney, and Amazon. Increasing production and distribution volume is a key lever that Paramount has identified to achieve internal revenue targets for the combined company.”

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