Netflix to Buy Warner Bros. for $82.7 Billion, Could Face Regulatory Hurdles

Netflix co-CEO Ted Sarandos said on a press call Friday that he's “highly confident in the regulatory process” and that the deal is “pro-consumer, pro-innovation, pro-worker, pro-creator and pro-growth. Our plans here are to work really closely with all the appropriate governments and regulators, but we’re really confident that we're going to get all the necessary approvals that we need.”

Netflix would acquire all of Warner Bros., including its production studios, the HBO network and streaming service HBO Max. The deal would close after the spinoff of Discovery Global is complete, which is expected in Q3 2026, Netflix said in a release. Discovery Global will take with it CNN, Discovery Channel and TNT Sports. Sarandos and Co-CEO Greg Peters declined to discuss Friday the specifics of how they would combine the two brands, but Sarandos said, “We think the HBO model itself is working and quite beloved by consumers.” The agreement was unanimously approved by the boards of both Netflix and Warner Bros. Discovery, the release said.

Communications attorneys told us that the deal would be negative for broadcasters and MVPDs. A former broadcast network attorney said programming prices for those companies would likely skyrocket, and the combination would likely accelerate the drift of MVPD subscribers to streaming, hurting the bottom line of both MVPDs and TV broadcasters. The combined company could also warp the landscape for sports rights deals, the attorney said, because few companies would have deep enough pockets to compete with Netflix for the next NFL contract.

LightShed analyst Rich Greenfield said in a CNBC interview Friday that the deal would likely lead to low streaming subscription prices for consumers but give Netflix outsized power over the entertainment industry.

The transaction isn’t expected to undergo FCC review, as Chairman Brendan Carr has said the agency wouldn’t have a role in scrutinizing a proposed purchase of Warner Bros. Discovery by Netflix rival Skydance Paramount. The deal will, however, require approval by federal regulators at the DOJ and FTC, and Netflix could face regulatory hurdles in getting that approval. DOJ Antitrust Division head Gail Slater has reportedly begun working on a probe into whether Netflix holds a monopoly over streaming (see 2512040056), and Skydance Paramount owner David Ellison is widely seen as having the ear of President Donald Trump. Skydance could seek to block the deal by lobbying the administration or doing a hostile takeover, analysts said Friday. “There’s going to be a tremendous amount of attacks on this,” Greenfield told CNBC.

Former FTC Commissioner Alvaro Bedoya, who was fired by Trump, said in a post on X that the deal is “a horror movie” that should be blocked by the DOJ. The state of California should also step in and seek to block the transaction because it will hurt movie theaters and the whole entertainment industry, he said. “This thing is going to hurt all of the independent writers, directors, and producers that make the most interesting stuff,” as well as more blue-collar production staff.

“The economic case for blocking this merger appears weak,” said International Center for Law & Economics senior scholar Eric Fruits in a blog post Friday. Though the deal would reduce the number of large subscription streaming services, the price sensitivity of streaming subscribers and competition from other entertainment options weaken the argument that it is anticompetitive, he wrote.

Lawmakers Call Deal a 'Nightmare'

Numerous lawmakers condemned the combination. House Antitrust Subcommittee ranking member Jerry Nadler of New York and other Democrats voiced major concerns about Netflix/WB and urged DOJ Antitrust to scrutinize the deal. Senate Antitrust Subcommittee Chairman Mike Lee, R-Utah, on Wednesday night pointed to “serious competition questions” about what, at that point, was still only a potential deal. In recent weeks, other Republicans, including House Intellectual Property Subcommittee Chairman Darrell Issa of California, have also raised antitrust concerns about a potential Netflix/WB deal.

Netflix/WB “would control two of the largest streaming platforms and production studios in the film industry,” Nadler wrote Friday on X. “That means higher prices with less options and lower pay for workers.” DOJ Antitrust “must scrutinize this deal and enforce the law,” he said.

Rep. Pramila Jayapal, D-Wash., called the deal a “nightmare [that] would mean more price hikes, ads, & cookie cutter content, less creative control for artists, and lower pay for workers. The media industry is already controlled by a few corporations with too much power to censor free speech.”

“This deal looks like an anti-monopoly nightmare,” said Sen. Elizabeth Warren, D-Mass. It “could force you into higher prices, fewer choices over what and how you watch, and may put American workers at risk. ... The antitrust review process” under the Trump administration “has also become a cesspool of political favoritism and corruption.” DOJ “must enforce our nation’s anti-monopoly laws fairly and transparently -- not use the [Netflix/WB] deal review to invite influence-peddling and bribery.”

Sen. Bernie Sanders, I-Vt., said the deal “is not just another corporate merger. This is about the growing, out-of-control concentration of ownership over the media. At a time when six major conglomerates control what 90% of Americans see, hear and read, oligarch control is getting even worse.” He noted that “in an authoritarian society, a handful of oligarchs own the media” and called on DOJ to “step up, enforce our antitrust laws, and break up these monopolies. The future of our democracy depends on it.”

Nathan Leamer, a former aide to FCC Chairman Ajit Pai, said in a since-deleted post on X that Netflix should change its content if it wants the deal to be approved. “Here is a thought, Netflix should immediately end their partnerships with the Obama Family as well as with Harry and Meghan Markle,” wrote Leamer, who's now executive director of Build American AI. “Currently Netflix is a bastion of far left propaganda. Why should they be rewarded????”