Netflix is facing headwinds from Washington in its proposed deal to acquire the film and streaming assets of Warner Bros. Discovery, according to multiple reports.
Netflix said in a news release the deal would be worth $82.7 billion.
The Trump administration, however, views the deal with “heavy skepticism,” a senior administration official said Friday, according to CNBC.
The Justice Department’s antitrust division is also skeptical, Charles Gasparino wrote in the New York Post.
“Netflix has been running around Washington trying to convince everyone that their deal is fine from an antitrust standpoint,” Gasparino quoted a source he said was “one former government official with firsthand knowledge of the Trump administration’s thinking.”
“No one is buying what they’re saying either at senior levels of the White House or DOJ antitrust,” the source said.
Gasparino wrote that HBO Max, owned by Warner Bros. Discovery, is the No. 3 streaming service with 100 million subscribers. Netflix has 300 million subscribers. Combining the two would make it twice the size of Disney, its nearest competitor.
Paramount Skydance is also trying to undermine the deal, the New York Post reported.
Paramount Skydance leader David Ellison met with Trump officials and lawmakers in Washington on Wednesday.
The pitch from Paramount Skydance was that the merger should be rejected on antitrust grounds.
One source compared the deal to Ticketmaster buying a major venue.
“Can you imagine Ticketmaster controlling the venue where every artist wants to play and what they could extract in terms of pricing power,” a former DOJ official remarked.
“It’s no different here; everyone in Hollywood would be compelled to do business with Netflix and agree to its terms. It would have pricing power over consumers of content as well,” the source continued.
The Wall Street Journal noted that President Donald Trump’s advisers, including White House officials, have concerns.
Ted Sarandos, co-chief executive of Netflix, said on an investor call that the chance to purchase Warner Bros. Discovery was a “rare opportunity” that will radically alter the future.
“We can’t stand still,” he said.
The offer is valued at $27.75 per Warner Bros. Discovery share. Paramount was bidding $30 per share.
Warner Bros. Discovery CEO David Zaslav said the combination “will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Officials from both companies said they expect the deal will be competed in 12 to 18 months.
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