Netflix-Warner Bros deal faces political pushback at the same time as firm touts advantages

Dec 5 : Some members of Congress on Friday deemed Netflix’s $72 billion proposed acquisition of Warner Bros Discovery’s studios and streaming unit an antitrust “nightmare” for shoppers and creatives, whereas the corporate touted the deal as driving worth for viewers, employees and shareholders.

Netflix stated the deal would create jobs and provides its 300 million subscribers “more bang for their buck” by including content material at a time when President Donald Trump’s administration is concentrated on decreasing costs.

Nevertheless, Republicans in Congress have warned of potential antitrust issues with Netflix absorbing HBO Max and Warner Bros’ content material rights. Democrats together with U.S. Senator Elizabeth Warren additionally criticized the transaction. 

Warren stated the deal “would create one massive media giant with control of close to half of the streaming market — threatening to force Americans into higher subscription prices and fewer choices over what and how they watch, while putting American workers at risk.”

Both Warren and U.S. Representative Pramila Jayapal, who co-chairs the House Monopoly Busters Caucus, known as the deal a “nightmare.”

“It would mean more price hikes, ads, & cookie cutter content, less creative control for artists, and lower pay for workers,” she stated in a publish on social media website X. 

Senator Amy Klobuchar, a Democrat from Minnesota, stated the “proposed deal, and any other, should be closely scrutinized.”

REPUBLICAN PUSHBACK

While Netflix gained the bidding conflict for Warner Bros studio and streaming property, it has been the political underdog in contrast with David Ellison-led Paramount Skydance, which has shut ties with the Trump administration. 

Paramount is contemplating making another takeover supply on to Warner Bros shareholders, who’ve but to vote on the Netflix deal, CNBC reported on Friday. Reuters couldn’t confirm the report.  

As the method performed out, Republicans in Congress warned {that a} Netflix acquisition would cut back alternative for shoppers and provides Netflix an unacceptably excessive share of the streaming market.

On Wednesday, U.S. Senator Mike Lee, a Utah Republican who leads the antitrust committee, stated a Netflix purchase of Warner Bros Discovery’s streaming property “should send alarm to antitrust enforcers around the world.”

“Netflix built a great service, but increasing Netflix’s dominance this way would mean the end of the Golden Age of streaming for content creators and consumers,” Lee wrote in a publish on X.

Last month, Republican Senator Roger Marshall of Kansas and Representative Darrell Issa of California additionally known as on U.S. antitrust enforcers to scrutinize any potential Netflix-Warner Bros deal, saying it may result in fewer motion pictures in theaters.

ANTITRUST SCRUTINY

The deal, given its dimension alone, is more likely to face important antitrust evaluate by the U.S. Department of Justice, and in addition as a result of it could get rid of competitors between HBO Max, which has 128 million subscribers, and Netflix. 

Netflix may counter by pointing to shifting media habits and the truth that Alphabet’s YouTube has lately been the most well-liked means for Americans to look at TV.

“We’re highly confident in the regulatory process. This deal is pro-consumer, pro-innovation, pro-worker, it’s pro-creator, it’s pro-growth,” Netflix Co-CEO Ted Sarandos stated after the deal was introduced.

A DOJ spokesperson declined to touch upon Friday.

George Hay, a regulation professor at Cornell University, stated the evaluate will rely on how a lot of the content material market Netflix would management after the deal, and whether or not or not it might be addressed by a partial sale of some property.

“Warner Bros has a lot of content already in the can. So you can imagine spinning off some of that content to another supplier, maybe a Paramount or something like that as a way of ameliorating or diminishing the market share,” he stated.

The deal will probably set off intense antitrust scrutiny within the European Union as a result of mixed firms’ market share. UNIC, the EU commerce physique representing cinema commerce associations and operators protecting 39 territories, stated it should share its considerations and opposition to the cope with competitors authorities.

RISING COSTS

The DOJ antitrust unit is led by Gail Slater, a former government at Fox Corp and Roku. She was later an financial advisor to Vice President JD Vance.

Last month, Slater signaled that the “main thing” for her workplace is specializing in the typical American’s largest expenditures. Housing, transportation, meals, healthcare and utilities lead the listing, with leisure in fifth place at 5 per cent of family spending, in response to a pie chart Slater posted on X.

But these leisure prices have been rising. Netflix raised the value of its personal normal ad-free plan by $2.50 to $17.99 a month in January. HBO Max adopted go well with, elevating its ad-free service worth final month by $1.50 to $18.49. 

Trump has a historical past of getting concerned in huge media mergers and weighing in on one aspect. He actively lobbied the DOJ in his first time period to cease AT&T’s $85 billion buy of Time-Warner, voicing considerations about media focus and his personal displeasure with Time-Warner’s CNN cable community. AT&T in the end gained in court docket in 2018 and 2019.

Warren warned on Friday in opposition to political favoritism tainting the deal evaluate course of.

“The Justice Department must enforce our nation’s anti-monopoly laws fairly and transparently — not use the Warner Bros. deal review to invite influence-peddling and bribery,” she stated.