Netflix is making headway wooing Warner Bros. Discovery with an offer for the media giant’s Hollywood studio and streaming service – but the proposed deal faces mounting opposition from the Trump administration, On The Money has learned.
As The Post exclusively reported earlier in the week, senior White House officials who speak directly to President Trump held a meeting about 10 days ago voicing opposition to Netflix’s megadeal over concerns that it would give the company too much market power.
Meanwhile, the bid also would face static from the Justice Department’s antitrust division led by department chief Gail Slater and her senior reports, who have recently held a series of meetings on the Warner Bros Discovery bake-off, sources said.
If Netflix wins the bidding battle to control HBO Max and the Warner Bros. studio, Slater & Co. discussed how DOJ antitrust cops plan to launch a sweeping, multiyear investigation, according to people with direct knowledge of the matter.
“Netflix has been running around Washington trying to convince everyone that their deal is fine from an antitrust standpoint,” said 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 added.
The key concern is that WBD’s streaming service, HBO Max, is the No. 3 streamer with 100 million subscribers. Combine it with the 300 million subscribers already held by No. 1 Netflix, and the merged entity would be twice as large as its nearest competitor in streaming, Disney.
US officials likewise fret that a Netflix win could take its pricing power in streaming to a whole new anticompetitive level by combining Warner Bros. studio with its own Hollywood studio.
Indeed, antitrust officials are likening the Netflix purchase of WBD to Ticketmaster, which has been in the regulatory crosshairs, buying a popular entertainment venue like Madison Square Garden, people close to the matter say.
“Can you imagine Ticketmaster controlling the venue where every artist wants to play and what they could extract in terms of pricing power,” said a former DOJ official with direct knowledge of the department’s current thinking.
“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 added.
A Netflix rep didn’t return repeated calls for comment; DOJ had no immediate comment.
Warner Bros. Discovery, also known as WBD, is now in the second round of its auction. In addition to Netflix, Paramount Skydance is bidding on the entire company, while media giant Comcast, like Netflix, is looking to buy WBDs streaming service and studio.
What has senior antitrust officials concerned is the growing likelihood that Netflix will win the bidding war based on management synergies between WBD boss David Zaslav and Netflix chief Ted Sarandos.
WBD could announce a winner as early as this week. It also could decide to hold a third round of bidding to fetch a higher price for its assets, which also include cable properties like CNN and HBO. It could walk away from the offers but insiders give that scenario low odds, believing it would crush WBDs share price.
Netflix and Paramount Skydance, run by Hollywood producer David Ellison and his tech tycoon father Larry Ellison, are seen as the leading contenders. Netflix is offering mostly cash for WBD’s studio and HBO Max streamer, while the Ellisons are offering all cash for the entire company at a price of $25 a share or more.
Insiders say WBD in the end could be valued between $60 billion and $70 billion – more than twice what it was before the process began. Comcast is offering cash and stock, which is less attractive to shareholders.
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