Netflix is pushing forward with a plan to buy Warner Bros Discovery’s key assets in an all-cash deal worth $83 billion, but the move is intensifying concerns among US politicians and regulators. As Netflix tries to speed up the purchase to fend off a rival bid from Paramount, critics are warning that the deal could create an anti-competitive giant in the media industry.
The proposed acquisition would see Netflix take over Warner Bros studios and HBO, granting it ownership of massive cultural properties like Superman and Game of Thrones. Opponents of the deal argue that this would place nearly 50% of the streaming market under the control of a single corporation. This backlash is a significant hurdle, even as Netflix tries to make the deal more palatable to shareholders with cash.
The pressure to close the deal quickly is coming from Paramount Skydance, which has launched a hostile $108.4 billion takeover bid. Supported by Oracle’s Larry Ellison, Paramount is aggressively challenging the Netflix agreement, going so far as to nominate directors to the WBD board to vote down the current deal. WBD has so far rejected Paramount, citing risky debt financing.
Under the revised terms, WBD shareholders would be paid entirely in cash for the studio and streaming assets. The company’s linear networks, including CNN and the Cartoon Network, are not part of the sale and would remain with the current equity holders. This separation is intended to streamline the purchase, but it does little to assuage fears of a streaming monopoly.
Despite the political heat, Wall Street seems to favor the consolidation. Shares of WBD and Netflix both ticked upward following news of the all-cash plan. The outcome of this deal will likely set a precedent for future media mergers and the regulatory appetite for market consolidation.