Could Donald Trump Attempt to Prevent Netflix from Acquiring Warner Bros.?

Netflixs ambitious $83 billion plan to acquire Warner Bros. faces intense scrutiny from regulators both in the United States and internationally. In the U.S., the stance of former President Donald Trump carries particular weight due to his influence over federal agencies during his administration.

While Trump has not publicly commented on Netflixs proposed purchase, concerns about the streaming giant gaining excessive market power through ownership of HBO Max and Warner Bros. studio operations are gaining attention in Washington, resonating with lawmakers from both parties.

According to a report from CNBC, a senior Trump administration official indicated that the White House views the Netflix-Warner Bros. deal with significant skepticism. Netflix and Warner Bros. Discovery (WBD) aim to finalize the transaction within 12 to 18 months, contingent upon shareholder approval and regulatory clearance.

In the U.S., the deal will undergo antitrust reviews by the Justice Department and the Federal Trade Commission. Approval from the Federal Communications Commission is not required, as the acquisition does not include broadcast networks.

Netflix executives remain optimistic about receiving regulatory approval. As part of their commitment, the company agreed to a $5.8 billion breakup fee payable to WBD if the deal fails due to regulatory blocks or other specified conditions. Netflix co-CEO Ted Sarandos emphasized, This deal is pro-consumer, pro-innovation, pro-worker, its pro-creator, its pro-growth. We are confident we will secure the necessary approvals.

Sarandos described Netflix and Warner Bros. as complementary, noting that both are beloved brands. He acknowledged the acquisition process has been demanding but stressed that the company is fully committed to completing it without interference from competing bids.

WBD CEO David Zaslav highlighted the synergy between the companies, stating, We are the largest content producer, and Netflix has the most advanced platform and technology. Initially, Netflix plans to operate HBO Max and Warner Bros. studios independently, with theatrical releases continuing for Warner Bros. films, although release windows may eventually become shorter and more consumer-friendly.

Trumps potential influence is complicated by his favorable ties with the Ellison family, who have previously sought to acquire WBD. While he has praised David Ellison and Larry Ellison, Trump has not directly addressed the Netflix-WBD transaction. Paramount has expressed doubts about the deals regulatory viability, warning it may face insurmountable hurdles due to antitrust concerns.

Even if Trump were opposed, regulatory challenges could still be overcome. During his presidency, a similar attempt to block AT&Ts acquisition of Time Warner was rejected by courts despite the Justice Departments objections.

Several Hollywood groups, including the Writers Guild of America and Cinema United, oppose the merger, citing potential negative impacts on jobs and competition. Lawmakers from both parties, including Senator Elizabeth Warren and Representative Darrell Issa, have voiced concerns about market dominance and consumer choice.

Netflix has over 300 million subscribers worldwide, while WBDs streaming services, including HBO Max and Discovery+, have 128 million. Co-CEO Greg Peters noted that while there is overlap between Netflix and HBO Max subscribers, combining the services could create new consumer options and pricing bundles.

Netflix maintains that even with HBO Max added, it does not monopolize entertainment, representing less than 10% of total U.S. TV viewing. Analysts suggest that regulatory approval will depend on whether Netflix can define its market as including competitors like YouTube, Amazon, and social media platforms.

Author: Zoe Harrison