Netflix co-CEO Ted Sarandos was predictably upbeat when he spoke on Friday to analysts about the regulatory road ahead for the proposed $82.7bn deal to acquire Warner Bros studios, HBO and HBO Max.
“We’re highly confident in the regulatory process,” the executive said. “This deal is pro-consumer, pro-innovation, pro-worker, pro-creator, pro-growth […] These two businesses are complimentary and they’re loved businesses.”
Talking up job creation and fair pricing is a familiar tactic in mergers and acquisitions before regulators scrutinise deals, however Sarandos’s words have not assuaged doubts that there will be rigorous examination of the proposal in the US – not to mention internationally.
No word from Trump… for now
While Donald Trump had not commented officially or on his Truth Social platform at time of writing – he was busy collecting the inaugural FIFA peace prize at the 2026 World Cup draw in Washington DC – the US president has shown he is not averse to bringing his influence to bear on media activity that catches his eye.
CNBC reported a senior Trump administration source saying the government regarded the proposed deal with “heavy skepticism”. Democratic Senator Elizabeth Warren was very clear in her appraisal, calling the proposed deal “an anti-monopoly nightmare”, adding: “Netflix-Warner Bros. 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.”
The Department of Justice oversees anti-trust matters and it remains to be seen what action it will take. The Federal Communications Commission assesses whether deals are in the public interest and is led by Brandon Carr, who has appeared to be in lock-step with Trump during the second administration. In September Carr intimated that ABC would face consequences unless it suspended Jimmy Kimmel Live!, whose host Trump has personally attacked on a number of occasions.
Because there will be no assignment of television license ownership in the proposed deal, the FCC may not get involved. However the impact on the streaming market may draw scrutiny from regulators. Netflix is by far the market leader with more than 300million global subscribers, and HBO Max currently draws close to 130million. A combined operation, or two under the control of one company – Netflix leadership were not specific in the investor call on Friday – may well trip alarm bells.
“Herculean effort”
“It’s going to take a herculean effort for Netflix and Warner Bros Discovery to get this over the line,” Corey Martin, chair of the entertainment finance practice at Granderson Des Rochers, told Screen.
“Netflix was already a behemoth,” Martin added. “Any regulator could easily conclude that Netflix and Warner Bros Discovery’s streaming business would create a streaming monopoly.”
Martin also noted that the proposed deal could land on the desks of state attorneys general in places like California and Georgia should a dominant entity drive up production costs.
On the investor call, Sarandos noted Netflix was the largest producer of original content in California and said: “[The proposed deal] gives us the ability to invest in production through the HBO brand, the Warner Bros brand, the Warner Bros television studio. This is a healthy growing business that is going to help another bus grow in a healthy way, and open up audience reach that these creators have never had before.”
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