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The bidding war to take control of Warner Bros. is heating up, with Netflix and Paramount emerging as the two leading contenders. Should Netflix win the bid, however, it’s going to ignite an investigation from the federal government.
According to recent reports, the White House held a meeting in late November over concerns that Netflix landing Warner Bros. would give Netflix too much market power, or a monopoly.
Furthermore, the New York Post has reported that Netflix’s bid for Warner Bros. would “face static from the Justice Department’s antitrust division led by department chief Gail Slater and her senior reports.”
“Netflix has been running around Washington trying to convince everyone that their deal is fine from an antitrust standpoint,” said one former government official with apparent firsthand knowledge of the Trump administration’s thinking, according to The Post. “No one is buying what they’re saying either at senior levels of the White House or DOJ antitrust.”
“The key concern is that WBD’s streaming service, HBO Max, is the No. 3 streamer with 100 million subscribers. Combine it with the 300 million subscribers already held by No. 1 Netflix, and the merged entity would be twice as large as its nearest competitor in streaming, Disney.”
The bidding war for Warner Bros. has turned ugly in recent days, with Paramount’s lawyers “sending a letter questioning Warner Bros. Discovery sale process and if WBD is favoring Netflix in this bidding process.”
“It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder,” reads the letter from attorneys at Quinn Emanuel, according to CNBC. “We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD.”
Earlier this week, Paramount Skydance raised the proposed breakup fee in its bid to acquire Warner Bros Discovery from $2.1 billion to $5 billion.