{"id":2192421,"date":"2025-12-09T15:06:24","date_gmt":"2025-12-09T15:06:24","guid":{"rendered":"https:\/\/celebrity.land\/en\/?p=2192421"},"modified":"2025-12-09T15:06:24","modified_gmt":"2025-12-09T15:06:24","slug":"the-netflix-and-warner-bros-tie-up-is-not-a-done-deal-what-could-stop-this-merger","status":"publish","type":"post","link":"https:\/\/celebrity.land\/en\/the-netflix-and-warner-bros-tie-up-is-not-a-done-deal-what-could-stop-this-merger\/","title":{"rendered":"The Netflix and Warner Bros. tie-up is not a done deal. What could stop this merger"},"content":{"rendered":"

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It was just last Friday that Netflix announced a blockbuster $72-billion deal<\/a> to acquire Warner Bros. film and television studios, HBO and HBO Max \u2014 a tie-up that could fundamentally change Hollywood.<\/p>\n

Yet on Monday, the stakes got even higher, as Paramount swooped in with a $78-billion hostile takeover bid<\/a> it plans to take directly to Warner Bros. Discovery\u2019s shareholders.<\/p>\n

Paramount Chief Executive David Ellison called the Netflix deal an \u201cinferior proposal,\u201d saying in a statement that it \u201cexposes shareholders to a mix of cash and stock, an uncertain future trading value of the Global Networks linear cable business and a challenging regulatory approval process.\u201d<\/p>\n

It all sets the stage for a long and potentially bruising fight. And the Netflix deal would have to overcome some significant regulatory hurdles, experts told me.<\/p>\n

\u201cThis is a deal that never should have left the boardroom,\u201d said David Balto, an antitrust attorney and a former policy director at the Federal Trade Commission during the Clinton administration. \u201cThe competitive concerns are profound. This is going to face a lot of opposition at the Justice Department.\u201d<\/p>\n

For one, antitrust regulators are expected to scrutinize the market share that would be controlled by a combined Netflix and HBO Max.<\/p>\n

Netflix outlasted its rivals in the so-called streaming wars<\/a> to become the dominant platform in a crowded space. That position has led to concern that gobbling up HBO Max would give Netflix outsized power in the streaming space \u2014 potentially more than 30% \u2014 which would cross a threshold under antitrust law, according to a recent letter from Rep. Darrell Issa (R-Vista) to Atty. Gen. Pam Bondi and Federal Trade Commission Chairman Andrew N. Ferguson.<\/p>\n

Netflix executives have argued that analysis of its market share should include YouTube. <\/p>\n

In a UBS investor conference Monday, Netflix Co-Chief Executive Greg Peters pointed to Nielsen data, which show Netflix\u2019s shares of U.S. TV viewing is still behind YouTube\u2018s. Netflix represents just 8% of U.S. TV viewing in October, behind YouTube\u2019s 12.9%.<\/p>\n

If Netflix were to combine with Warner Bros. Discovery\u2019s 1.3% share of U.S. TV viewing, its 9.2% would still be less than that of YouTube. (Other Nielsen data show that Warner Bros. Discovery channels have greater viewership, but Netflix is only interested in one channel, HBO).<\/p>\n

\u201cWe think there\u2019s a strong fundamental case here for why regulators should approve this deal,\u201d Peters said. (The deal\u2019s overall value is $82.7 billion due to the absorption of debt)<\/p>\n

But who would regulators consider a competitor to Netflix? Is it YouTube, with its emphasis on shorter-form content? Or would the main competitors be other streaming services with films and series, like Disney+, Paramount+ and Peacock? <\/p>\n

\u201cThe analytical issue there is, how do you define the market?\u201d said George Hay, a professor of law at Cornell University and former director of economics in the Justice Department\u2019s antitrust division. \u201cWhat is their combined market share, what do they compete in and what are the alternatives available to consumers?\u201d<\/p>\n

The consumer angle would also invite involvement from the Federal Trade Commission. With a shrinking marketplace, the agency would likely investigate whether this could increase streaming prices for customers.<\/p>\n

\u201cWhat keeps Netflix honest is knowing there\u2019s an HBO Max that\u2019s right over its shoulder,\u201d Balto said. \u201cBut once they get rid of that, they can lead the easy life, and the need to cut prices or provide better services or bid aggressively for film content \u2014 all of that will be diminished.\u201d<\/p>\n

Meanwhile, Hollywood unions and the Cinema United trade group have also raised concerns<\/a> that a Netflix ownership of Warner Bros. would lead to fewer films being released in theaters, due to the company\u2019s longstanding resistance to traditional movie releases. Netflix has said it would honor Warner Bros.\u2019 theatrical release commitments and that future films without those existing deals will also go to theaters.<\/p>\n

Beyond the U.S. concerns, Netflix would also need the blessing of regulators across the globe, and could be challenged by even state attorneys general who might have a significant number of entertainment workers in their areas who would question the effect on industry jobs.<\/p>\n

Then, there\u2019s the politics of it all.<\/p>\n

President Trump himself has said he \u201cwould be involved\u201d in his administration\u2019s decision to bless any deal and that the combined market share of Netflix and Warner Bros. \u201ccould be a problem.\u201d<\/p>\n

As my colleagues Meg James and Stacy Perman have reported<\/a>, Trump has openly favored Paramount\u2019s bid for Warner Bros. Discovery, though word of Paramount backer Larry Ellison\u2019s close ties with Trump dampened enthusiasm for the bid in Hollywood. Trump\u2019s son-in-law, Jared Kushner, is now also one of the investors participating in the renewed Paramount bid.<\/p>\n

Despite this involvement, the Trump administration may not have the final say on the deal, just as in the case of the AT&T deal for Time Warner.<\/p>\n

For his part, Netflix Co-Chief Executive Ted Sarandos has also been trying to make his own case to Trump and ventured to the White House last month, Bloomberg reported<\/a>.<\/p>\n

\u201cIt\u2019s a case in which the political issues are going to play a role,\u201d Hay said. \u201cThey\u2019re so front and center, and Trump has shown an inclination to get involved.\u201d<\/p>\n

About the only thing that\u2019s clear is that it\u2019s not going to be a quick process.<\/p>\n

\u201cThis entire matter is not going to get resolved in a hurry,\u201d said Corey Martin, managing partner at Granderson Des Rochers. \u201cThe resolution of this matter is very likely to take place over months and potentially years, and not days and weeks.\u201d <\/p>\n

Stuff We Wrote<\/h2>\n

Film shoots<\/h2>\n
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