Netflix to accumulate Warner Bros Discovery, elevating antitrust considerations | Media News | USAEMALL.com

Netflix has agreed to buy Warner Bros Discovery TV, film studios and streaming division for $72bn, a deal that would hand control of one of Hollywood’s most prized and oldest assets to the streaming pioneer.

The agreement, announced on Friday, follows a weeks-long bidding war between Netflix and Paramount-Skydance. The streaming giant offered $28 per share, while Paramount offered $30 per share, according to CNBC, which cited sources familiar with the matter.

Under the Netflix deal, each Warner Bros Discovery shareholder will receive $23.25 in cash and about $4.50 in Netflix stock per share, valuing Warner at $27.75 a share, or about $72bn in equity and $82.7bn with debt.

Netflix has offered Warner Bros Discovery a $5.8bn breakup fee, while Warner Bros Discovery would pay Netflix $2.8bn if the deal collapses.

Netflix said it expects to generate at least $2bn to $3bn in annual cost savings by the third year, after the deal closes. Warner CEO David Zazlav will also step down following the completion of the merger.

The deal would give Netflix ownership of iconic franchises such as “Game of Thrones”, “DC Comics” and “Harry Potter”. It is also expected to raise antitrust concerns in Europe and the United States that the purchase would greatly increase the buying power of Netflix, which is already a dominant force in Hollywood.

Netflix has said that the deal would create more jobs and opportunities for talent. Representatives for the company were unable to provide details to Al Jazeera on how that would happen.

“If I was tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix,” Jason Kilar, the former CEO of Warner Media, said in a post on the social media platform X.

Al Jazeera reached out to both the Writers and Screen Actors Guilds for comment, but neither group was immediately available.

The merger, if approved, will add HBO Max’s 128 million subscribers to Netflix’s more than 300 million, creating a formidable player.

Cinema United, a global exhibition trade association, has said the deal poses an “unprecedented threat” to movie theatres worldwide.

“In light of the current regulatory environment, this will raise eyebrows and concerns. The combined dominant streaming player will be heavily scrutinised,” said PP Foresight analyst Paolo Pescatore to the Reuters news agency.

Scrutiny from Washington

Even before the bids were in, some members of Congress said a Netflix–Warner Bros Discovery deal could harm consumers and Hollywood. The White House also weighed in, with the administration viewing it with “heavy scepticism”, according to CNBC, which cited an unnamed senior administration official.

US Senator Elizabeth Warren, a Democrat, said the move will be an “anti-trust nightmare” and stressed that the merger would limit choice for consumers.

“A 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,” Warren said.

US Representative Pramila Jayapal, who co-chairs the House Monopoly Busters Caucus, also called the deal a “nightmare”.

“It would mean more price hikes, ads, & cookie cutter content, less creative control for artists, and lower pay for workers,” Jayapal said in a post on the social media site X. “The media industry is already controlled by a few corporations with too much power to censor free speech. The gov’t must step in,” she added.

Republicans, too, said the deal would reduce choice for consumers and give Netflix an unacceptably high share of the streaming industry.

The proposed merger is underscored by US President Donald Trump’s view of the news organisations that cover his administration. CBS News, which is owned by Paramount-Skydance, has close ties to the Trump administration.

Oracle cofounder Larry Ellison’s son, David Ellison, leads Paramount-Skydance. The elder Ellison is considered to be close to Trump. Paramount-Skydance has been accused of making choices that align with the White House’s wishes, including the cancellation of The Late Show with Stephen Colbert, as host Stephen Colbert was critical of the president. The network has said that the decision was not political in nature.

In September, the network appointed Kenneth Weinstein as ombudsman and to review allegations of bias, even though Weinstein has no background in journalism, has been a Trump donor and had earlier headed a conservative think tank. In October, the network appointed conservative opinion writer Bari Weiss, who previously had no experience in television, to lead the legacy broadcaster’s news division.

Warner Bros Discovery owns news network CNN, and there were concerns that, should Paramount own it, it could bring in leadership that is aligned with Trump and the Republican Party, as have been the concerns about CBS.

On Wall Street, Netflix is down 0.8 percent in midday trading while Warner Bros Discovery is up 3.5 percent.