Mike Lee in a letter to Netflix and Warner Bros Discovery reportedly said the deal “appears likely to raise serious antitrust issues.”
- According to a report from The Wall Street Journal, the letter was sent to Netflix co-CEOs Ted Sarandos and Greg Peters and Warner Bros chief David Zaslav last week.
- The senator in the letter also said that the deal ‘raises concerns about potential abuse of the merger review process’.
- The letter did not mention Netflix's rival Paramount.
The chairman of the Senate’s antitrust subcommittee is reportedly raising concerns over Netflix's proposed acquisition of the Warner Bros. movie-and-television studios and HBO Max streaming service.
According to a report from Wall Street Journal, Senator Mike Lee in a letter to Netflix and Warner Bros Discovery said the deal “appears likely to raise serious antitrust issues, including risk of substantially lessening competition in streaming markets.”
The letter was sent to Netflix co-CEOs Ted Sarandos and Greg Peters and Warner Bros chief David Zaslav last week, as per the report.
Letter Details
The senator in the letter also said that the deal ‘raises concerns about potential abuse of the merger review process’ particularly if an acquirer obtains ‘competitively sensitive information under the guide of due diligence”.
Lee also said that he was concerned that the Warner-Netflix deal ‘could operate as a so-called ‘killer non-acquisition,’ effectively weakening a major competitor through the pendency of the merger review process.
The letter did not mention Netflix's rival Paramount.
FCC Has Same Concerns
Federal Communications Commission Chairman Brendan Carr has also flagged “legitimate competition concerns” in Netflix Inc.’s proposed acquisition of Warner Bros. Discovery’s studios and streaming businesses.
As per a report from Bloomberg News earlier this month, Carr said in an interview that he doesn’t see the competition concerns if Paramount Skydance Corp. were to acquire those assets.
The FCC, which regulates broadcast TV licenses, doesn’t have jurisdiction over the Netflix deal. There is a scenario in which the commission might have to review a Paramount-Warner Bros. combination because Paramount, owner of the CBS TV network, plans to raise money from foreign sources, Carr said.
The U.S. Justice Department is already reviewing any competition concerns raised by the proposed acquisition of Warner Bros. by Netflix and the hostile bid by Paramount.
How Did Stocktwits User React?
Retail sentiment around NFLX trended in ‘extremely bullish’ territory amid ‘extremely high’ message volume. Meanwhile retail sentiment around WBD trended in ‘bearish’ territory amid ‘normal’ message volume.
Shares of Netflix have fallen 12% over the past 12 months, meanwhile, WBD shares have surged 180% over the past year.
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