Hours after Netflix announced its $82.7 billion acquisition of Warner Bros. Discovery, US Senator Elizabeth Warren (D-MA) stated that the landmark deal was "like an anti-monopoly nightmare" and raised concerns over potential job losses and subscription price hikes. Warren called on the Justice Department to look into the Netflix deal and enforce the US government's antitrust laws.
As two of the most prominent media companies in the entertainment industry, Netflix's acquisition of Warner Bros. Discovery, including HBO Max and other WB-owned properties into Netflix's library. The deal would also extend to Warner Bros. Games and subsidiaries like NetherRealm Studios, TT Games, and Rocksteady. However, Discovery Global would be spun off into a separate company. Discussions between Netflix and WB reportedly happened over several months, amid rumors that WB was looking to be bought out. Although companies like Comcast and Paramount Skydance wanted to purchase Warner Bros. Discovery, they ended up falling short of Netflix. The Netflix-WB deal could be finalized within the latter half of 2026, pending approval.
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Netflix's WB Buyout Draws the Ire of the US Government
With Netflix buying out Warner Bros. Discovery for an estimated $82.7 billion, the move has drawn scrutiny from prominent US government officials. Hours after Netflix's announcement, Sen. Warren shared her concerns about the deal, and said it was "like an anti-monopoly nightmare" for consumers. Warren said that, if the merger goes through, it would give Netflix control of approximately half the US streaming market, and give viewers less options over the content they want to watch. Warren also stated Netflix's deal would put jobs at both media companies at risk of layoffs.
Although Netflix pitched its acquisition of WB as a deal that would offer its customers "more bang for their buck" by adding more content over time, Warren argued that the merger would result in higher subscription rates to compensate. In late October, HBO Max raised its monthly subscription prices across the board, with the standard tier jumping from $16.99 to $18.49 per month. Warren was not alone in her criticism of the Netflix-WB deal, as US House Representative Pramila Jayapal (D-WA) said the deal would mean less creative control for artists and less pay for staffers. Both Jayapal and Warren called on the US Justice Department to investigate and enforce the US government's antitrust laws. US Senator Mike Lee (R-UT) said that the Netflix deal would be bad for content creators and consumers alike.
Netflix's Buyout is Not the First To Draw Government Scrutiny
This is not the first time that a multi-billion dollar acquisition has drawn concerns from various governments and regulatory officials. Although government officials and antitrust advocates were against Microsoft's controversial acquisition of Activision Blizzard, the deal was finalized after the UK's Consumer and Markets Authority (CMA) allowed the deal to go through following some amendments that Microsoft made. The $68.7 billion acquisition saw former Activision CEO Bobby Kotick take a contract buyout amid some corporate restructuring, and several Activision and Blizzard franchises like Call of Duty and Diablo officially became part of the Xbox brand.
Microsoft's acquisition of Activision Blizzard was criticized by former US Federal Trade Commission (FTC) chair Lina Khan, who originally sued to stop Microsoft from acquiring Activision Blizzard before losing the case in court. Khan stated in an October Twitter post that the acquisition was a primary driver behind Microsoft's layoffs that took place in early July, as over 9,000 employees were let go across the board. Khan also blamed the buyout for Xbox's subsequent price increases on Xbox Series X/S consoles and Xbox Game Pass subscriptions. With Warren and other government officials claiming that Netflix's purchase of Warner Bros. Discovery could be a bad deal for consumers and current employees, only time will tell if the US Justice Department will intervene and investigate the matter.
Source: Reuters