Warner Bros Discovery’s future hangs in the balance as Netflix and Paramount clash over a $72-billion sale and a $77.9-billion takeover, with regulators and even President Trump weighing in.
The Stakes: Who Wants What
Warner’s board on Wednesday urged shareholders to back the $72-billion deal with Netflix to sell its studio and streaming business. Paramount, a Skydance-owned company, is pursuing a hostile $77.9-billion bid for a full takeover of Warner, which would bring networks such as CNN under its umbrella.
Both scenarios would almost certainly trigger a review by the U.S. Justice Department. The department could sue to block the transaction or demand changes, and other countries or entities might also challenge either acquisition.
Regulatory and Political Landscape
The merger’s regulatory path could drag on for more than a year, possibly longer. In addition to antitrust scrutiny, politics are expected to play a role under President Donald Trump, who has made unprecedented suggestions about his personal involvement in the deal. Trump said he would personally “be involved in that decision.”
Earlier this month, Trump noted that Netflix’s deal “could be a problem” because of the size of the combined market share. He also has a close relationship with billionaire Oracle founder Larry Ellison-father of Paramount CEO David Ellison-whose family trust heavily backs the bid to buy Warner. An investment firm run by Jared Kushner, Trump’s son-in-law, was among other initial contributors to Paramount’s bid but later backed out.
Industry Impact and Consumer Concerns
Netflix’s streaming arm accounts for 20% of the U.S. on-demand subscription market, according to JustWatch, compared with 13% for HBO Max and 7% for Paramount+. Netflix has also built a production arm that has delivered hits like “Squid Game” and “Stranger Things.”
Paramount has argued that bringing Netflix under the same roof as HBO Max would squash competition and give the combined entity “overwhelming” market share. Netflix counters that the merger would give consumers more choice, allowing it to offer more plans and titles from Warner’s catalog.
Antitrust experts expect both companies to frame the merger as a necessity to compete against broader video libraries, particularly YouTube. Jim Speta, a professor at Northwestern University’s Pritzker School of Law, said both firms would argue the deal is “necessary for them to compete against YouTube.” He added that a broader market definition makes the merger appear less anti-competitive.
However, other analysts warn that the combined company could control prices or add subscription hoops. Scott Wagner, head of antitrust practice at Bilzin Sumberg, said the range of available content might shrink, especially older movies that could see shorter streaming windows.
News and Cable Implications
If Paramount succeeds, it would merge two of Hollywood’s “big five” studios. Attorneys like Wagner expect the prospect of Warner-owned CNN and Paramount’s CBS under one roof to be raised in the regulatory review, though he believes it will carry less weight than streaming and content library questions.
Advocates of the Paramount merger will likely point to wider media offerings beyond traditional TV news, including information sharing on social media platforms, as part of Warner’s broader portfolio. Paramount has already taken steps to appeal to more conservative viewers in its news operations, notably by installing Free Press founder Bari Weiss as editor-in-chief of CBS News. A CBS-CNN combo could trigger similar shifts at CNN, a network that has long attracted ire from Trump.
Key Takeaways
- Warner’s board supports a $72-billion sale to Netflix, while Paramount pursues a $77.9-billion hostile takeover.
- Both deals face DOJ scrutiny and could be challenged by other jurisdictions.
- President Trump’s expressed involvement adds a political dimension to an already complex regulatory landscape.
The outcome of this high-stakes battle will reshape the entertainment industry, influencing movie production, streaming services, and the broader media ecosystem.
