What to know
- President Donald Trump says Netflix-Warner Bros deal "could be a problem."
- Netflix-Warner Bros combined would account for 33% of US streaming video market, making regulatory approval difficult.
- Meanwhile, Paramount has launched a $108.4 billion hostile bid to acquire all of WBD, including the TV networks.
- Backlash against Netflix-WBD deal continues, as Hollywood Unions and guilds call for 'blocking' the merger.
Soon after Netflix's announcement of buying Warner Bros. Discovery (WBD) last week for a whopping $72 billion, many began to question if the deal could ever go through. Given how massive the combined size of such a merger would ultimately be - around 33 percent of US streaming video market - it's unlikely that the deal would go through without a hiccup. And the first big hiccup for Netflix is President Donald Trump himself.
"It could be a problem" - Trump
At a recent event, Trump told reporters what he thought of the Netflix-WBD deal.
"Well, that's got to go through a process, and we'll see what happens... But it is a big market share. It could be a problem."
Although Trump is known for his throw-away comments that never amount to much bite, Netflix may want to heed his words for once. Trump has also said that he'll be "involved in that decision", though he didn't say whether he was in favor of the deal or not.
Netflix CEO Ted Sarandos even met with Trump in November in all likelihood to kowtow before the President before the bidding war began. But it appears not everything went smoothly.
Paramount launches $108.4bn hostile bid
President Trump is not the only hurdle in Netflix's way to acquire WBD. Now Paramount Skydance, which was expected to take the deal home but lost to Netflix, has launched a hostile $108.4 billion bid for WBD, claiming they want "to finish what we started." Paramount has made an all-cash offer, telling WBD shareholders that their $30-per-share is better than Netflix's 'inferior' offer.
While Netflix won the bidding war for Warner Bros. Discovery film studio and HBO Max streaming service, it has no intention of acquiring the company's TV networks. On the other hand, Paramount wants to keep Warner Bros. Discovery whole, and its bid is for all of Warner Bros. Discovery, including the TV networks like TNT Sports and CNN.
By all accounts, many appear to be on Paramount's side, which makes Paramount believe that their regulatory approval will also be much shorter. Their friendly relationship with the Trump administration is no secret, but Paramount is also much smaller in size, which may make it easier for them to go for WBD.
Up in arms against Netflix
Even if President Trump and Paramount don't come in the way, Netflix may have to hop through hoops to obtain regulatory approval. Netflix reigning over a possible 33% of the US streaming video market has sounded anti-trust alarm bells already.
The heads are turning, the brows are furrowed, and many across the globe and at home are looking at the Netflix-WBD merger with a highly skeptical eye. Not least of which include Hollywood's unions and guilds, especially the Writers Guild of America and West who have called for 'blocking' the merger, saying the "world's largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent."
The Directors Guild of America has also issued a notice:
The guilds fear Netflix will end up killing the film industry, eliminate jobs, raise prices, and reduce content diversity. But the fact that Netflix's statement had shoved its stance on theatrical release to a mere footnote is telling.
Make sure to check this page as the story develops and unfolds.
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