Forget the Davos Conference, Netflix (NFLX) may need to beef up its own foreign policy in the wake of its Q4 earnings report.
The screws continue to tighten on Netflix’s potential Warner Bros. (WBD) acquisition, the Wall Street Journal reported. The former little-DVD-by-mail-service-that-could, now a media megacorp, is losing ground in key international markets, due to shareholder concerns about the deal, according to Reuters.
For movies — especially those with theatrical releases — international markets have gained importance in recent years, with the Chinese market in particular determining box office success for would-be blockbusters.
The fact that Disney (DIS) performs exceedingly well in these markets only compounds the issue, increasing the pressure on Netflix to win over foreign audiences.
So the 7%-and-beyond European stock dip, as Reuters reported, prompted by Netflix’s Q4 earnings call (and the public’s perception of its all-cash offer for Warner Bros. Discovery, per the Wall Street Journal), is not what CEO Ted Sarandos and the rest of Netflix’s shareholder-beholden brass want to see.
Now, European movie markets will take the spotlight and potentially determine the fate of the industry-encompassing deal. All eyes turn to Europe’s regulators, Bloomberg noted. Paramount (PSKY) is lobbying them to stand in the way of a Netflix-WBD deal aimed at “saving theaters,” Bloomberg also reported.
Related: ‘Zootopia 2’ sees instant box-office success for Disney, but there’s a secret
“European Union regulators are poised to review competing bids for Warner Bros. Discovery Inc. at the same time — thrusting Netflix Inc. and Paramount Skydance Corp. into a rare head-to-head antitrust battle,” Bloomberg explained.
“People familiar with the matter said the parallel probes are now inevitable due to the timing of the rival proposals and the fact that both sides have already sounded out EU merger watchdogs about their plans.”
Simultaneously, Netflix will try to retain whatever international audience it can, as Disney continues to gain ground throughout the dealmaking.
Here’s my read on the stakes of those probes, as well as the overall state of the Disney versus Netflix tête-à-tête for the hearts, minds, and monthly streaming dues of international film audiences.
Warner Bros. hinges on EU regulators
In the latest tactical shift, Paramount CEO David Ellison and his best courtiers touched down on European shores as early as last Wednesday, Jan. 14 (per Variety). Their mission was simple(ish): sway European anti-trust regulators Paramount’s way in lieu of Netflix ahead of a recently announced antitrust probe.
The stakes? Well, everything.
“While EU regulators do not pick winners in hostile takeover bids, the European Commission’s decision may very well tilt the balance [of the deal],” Bloomberg reported Wednesday, Jan. 21.
According to EU rules, these type of probes are triggered by any hostile takeover beyond a certain monetary threshold. Dual independent probes, each addressing a proposal, are then launched by the European Commission, a process overseen by EU antitrust commissioner Teresa Ribera.
The review of each proposal typically takes about a month, at which point the Commission will allow a given proposal to proceed, or issue a formal veto.
The name of the game for Netflix or Paramount will be speed.
Whichever proposal — Netflix or Paramount’s — has a smoother process and clears the European Commission’s probe more quickly will gain an edge in the public eye.
To that end, Paramount has a distinct advantage, as the European Commission may view its proposal to acquire Netflix as more complicateddue to the relative strength of Netflix’s position as a streamer in the EU. Paramount has less of a hold, thus posing less of an antitrust threat.
As a result, both proposals may still clear, but Netflix’s may take longer. Again, as always in deals of this magnitude (and surrounded by this much publicity), even if the results are the same, the first bidder to the finish line (aka the first to publicly declare it has been cleared) will get the bump with shareholders and in negotiations.
It’s not fair, but all’s fair in the M&A war.
Netflix deal probe triggered by EU movie watchdog group
The request for dueling antitrust probes that very well may swing the deal didn’t come out of thin air.
Rather, movie theater trade union “watchdog” the International Union of Cinemas, aka the UNIC, made the request of the European Union. The UNIC is comprised of some of the EU’s biggest theaters, including AMC Entertainment Holdings Inc. (AMC), Kinepolis Group NV, and Cineworld Group Plc.
The UNIC did not mince words when it came to their fears of the effect on theaters, should either streaming giant acquire Warner Bros.
“Were it to be allowed to go ahead, this deal represents a double risk. If a studio disappears, that will inevitably mean that cinemas will have fewer films to screen for their audiences, leading to reduced income and significant cinema closures and job losses in the industry,” Laura Houlgatte, UNIC CEO said in UNIC’s December Statement in opposition to the Netflix deal.
“[The UNIC is] opposed to any deal that would lead to a loss of a significant proportion of future titles,” Houlgatte added most recently, this time in relation to both the Paramount and Netflix deals, per Bloomberg’s reporting.
No matter who goes out on top, European cinemas remain a crucial linchpin for a vulnerable film industry, and one that Netflix doesn’t want to lose.
Disney vs. Netflix international movie markets numbers
Netflix, for its part, has also been hard at work wooing European regulators. Its overtures are primarily focused on preserving theatrical release windows, which moviegoers and theater owners alike fear they, by their nature as a streamer, will eliminate.
Last Friday, Netflix CEO Ted Sarandos promised The New York Times that he would preserve the traditional minimum-45-day theater window for Warner Bros. releases.
These assurances indicate Netflix’s desire to continue to compete with rivals like Disney at the physical box office, were it to acquire Warner Bros.
The competition will be fierce, however, as Disney delivered on CEO Bob Iger’s promises by dominating the international box office in 2025, CNBC reported.
This dominance was borne primarily on the backs of mega-smash-hits “Zootopia 2,” “Avatar: Fire and Ash,” and “Lilo & Stitch,” which finished #2, #3, and #4 in worldwide box respectively, per Box Office Mojo’s 2025 Global Box Office Returns.
All three films earned over a billion dollars, with “Zootopia 2” and “Avatar: Fire and Ash” continuing to print money until well, today — quite a ways into 2026.
For our European Union focus, it’s worth noting the spectacular opening of “Avatar: Fire and Ash.” The James Cameron sequel enjoyed particular success in European markets.
“Avatar: Fire and Ash” box office records
- No. 1 MPA film in all markets opening weekend (except Japan):$347.1 million opening weekend global box office
- Second-highest international opening (Since“Avatar: The Way of Water”($308M), behind “Zootopia 2”): $258.1 million international box office
- Second-biggest opening in China 2025 (Behind “Zootopia 2”):$57.6 million China box office
- Biggest 2025 openingbox office (France, Germany, Spain, Korea, Singapore, Thailand, India, Indonesia, Vietnam, more)
- Biggest IMAX opening in 2025 (fifth of all time):$46.3 million IMAX box office Source: The Walt Disney Company and Deadline
With Disney thus pummeling all of its studio rivals at the box office, Netflix’s vow to compete tooth and nail is a brave one. However, it is also a necessary vow, at least at this juncture.
If Netflix can soothe regulators’ and moviegoers’ concerns that its absorbing WBD will be the “death of going to the movies,” it would do wonders for their chances at closing the deal.
Then, down the line, they could always change their mind about theatrical releases and other erstwhile practices of a bygone age. Unfortunate, but certainly a possibility.
Time will tell, and a Netflix/WBD hybrid might well be big enough to compete with the likes of Disney. Hey, for what it’s worth, the European and Chinese moviegoing audiences are only growing. I’m not saying they could save movies in theaters. Unless…