ENTERTAINMENT

James Cameron Sounds Alarm Over Netflix-Warner Bros. Deal, Backs Paramount - The Hollywood Reporter

The Hollywood Reporter 2026-02-20 00:36 Read Original →

Summary Full Article

James Cameron has sent a letter to Senator Mike Lee opposing Netflix's potential acquisition of Warner Bros. Discovery, arguing it would devastate the theatrical exhibition business and eliminate hundreds of thousands of jobs across the Hollywood ecosystem. The director warns that Netflix's streaming-first business model conflicts fundamentally with Warner Bros.' theatrical release strategy (approximately 15 films annually), and he doubts Netflix CEO Ted Sarandos' commitment to maintain a 45-day theatrical window. Cameron explicitly backs Paramount's competing bid, framing the Netflix deal as threatening both consumer choice and filmmaker opportunities while potentially triggering cascading failures across VFX companies, theaters, and production infrastructure.

Second-Order Effects

Near-term consequences — what happens next

**Intensified DOJ antitrust scrutiny** will likely expand beyond streaming dominance to examine monopsony concerns, specifically whether a Netflix-Warner Bros. combination would give the merged entity excessive bargaining power over talent, filmmakers, and content creators, potentially delaying or blocking the deal and establishing new precedents for vertical integration reviews in entertainment.
**Theater chains and exhibition industry lobbying** will accelerate dramatically, with AMC, Cinemark, and others forming coalitions to pressure regulators and lawmakers, potentially extracting concrete concessions (guaranteed theatrical releases, minimum screen counts, extended windows) from any acquirer as conditions for deal approval.
**Paramount's negotiating position strengthens significantly** as Cameron's public intervention—from Hollywood's most commercially successful director—provides political and cultural cover for regulators to favor a "theatrical-friendly" buyer, potentially driving up Paramount's valuation expectations and attracting additional strategic bidders who can credibly commit to preserving theatrical distribution.

Third-Order Effects

Deeper ripple effects — longer-term consequences

**Fundamental restructuring of studio finance models** may emerge as the distinction between "streaming studios" and "theatrical studios" becomes legally and regulatorily codified, creating a bifurcated Hollywood where companies must choose business models upfront, limiting future flexibility and potentially requiring divestitures when streamers acquire traditional studios or vice versa.
**Geopolitical soft power implications** will materialize as reduced theatrical distribution concentrates American film influence in streaming platforms with uneven global penetration, weakening U.S. cultural diplomacy in regions where theatrical exhibition remains dominant (Middle East, parts of Asia, Latin America) and creating opportunities for regional film industries to capture market share in physical venues.
**Acceleration of the "creative class" stratification** will deepen as top-tier filmmakers like Cameron gain effective veto power over industry consolidation through regulatory intervention, while mid-tier creators lose negotiating leverage in a more consolidated market, potentially driving talent toward fragmented international co-production models or emerging studio alternatives in markets like South Korea, India, and the Middle East.