As Netflix prepares to switch to an all-cash offer to seal its $83 billion takeover of Warner Bros Discovery, a political storm is brewing in Washington. The deal, designed to speed up the acquisition and fend off a hostile bid from Paramount, has triggered a backlash from US politicians who fear the creation of a media monopoly.
Critics argue that allowing Netflix to acquire WBD’s studio and streaming businesses—including HBO, Harry Potter, and Batman—would give the giant nearly 50% control of the streaming market. This level of dominance is raising alarm bells among regulators and industry figures, even as Netflix tries to make the deal more attractive to shareholders with cash.
The urgency for Netflix comes from the threat of Paramount Skydance. Paramount has launched a hostile $108.4 billion bid, backed by the Ellison family. WBD has rejected this offer due to its debt financing, but Paramount is fighting back by trying to install new board members. Netflix hopes an all-cash deal will close the transaction before Paramount can succeed.
Under the plan, WBD’s linear networks like CNN and Discovery would be excluded from the sale. This separation of assets is meant to streamline the deal, but it does little to address the concerns about streaming dominance. The backlash suggests that even if shareholders approve the cash offer, regulators may yet intervene.
Despite the political risks, the market remains optimistic. WBD stock rose 1.6% and Netflix rose 1% on the news. The rising share prices suggest that investors believe the deal will go through, creating a new era of consolidation in the entertainment industry.