A potential merger between Netflix and Warner Bros. Discovery is setting off antitrust alarm bells in Washington.
Netflix is actively exploring a bid for Warner Bros. and has hired investment bank Moelis & Co., which advised Skydance Media on its successful acquisition of Paramount Global.
Sen. Roger Marshall, Kansas Republican, this week called on the Department of Justice and the Federal Trade Commission to closely scrutinize the deal for the potential to harm consumers.
He warned in a letter to the departments that the merger would “create one of the largest content consolidations in modern media history — hurting consumers, workers, and competition across the entertainment marketplace.”
If Netflix were to absorb a major studio, Mr. Marshall said, the result could be fewer films produced, limited movie theater exclusivity due to direct-to-streaming releases and reduced investment in large-scale productions.
This would have “substantial downstream consequences for labor markets across the entertainment industry, harming thousands of workers whose jobs depend on a robust and diverse pipeline of film and television projects,” he said.
“Simply put, a deal of this scale risks diminishing competitive pressure, enabling Netflix to raise prices, restrict output, and reduce the variety of content available to consumers,” he said.
A deal would require approval from federal regulators, as do all major mergers and acquisitions.
Warner Bros. owns HBO and some of the most popular TV sensations, such as the DC Comics franchises, and is also the parent company of CNN.
Netflix CEO Ted Sarandos said in the company’s third-quarter investor video that it has no interest in owning legacy media networks.
Mr. Marshall urged the Justice Department and the Federal Trade Commission to act decisively to prevent anticompetitive mergers, as a transaction this big should be inspected with the “highest level of antitrust rigor.”
He said that “further consolidation threatens consumer welfare, market dynamism, and the diversity of creative expression that is essential to a healthy democratic society.”
Warner Bros. said on Oct. 21 that it was considering multiple deals, months after the company said it would split its streaming and studios business from its cable networks business.
The company’s president and CEO, David Zaslav, said in the statement that it continues to “make important strides to position our business to succeed in today’s evolving media landscape by advancing our strategic initiatives, returning our studios to industry leadership, and scaling HBO Max globally.”
Netflix, Comcast and Paramount are among the top contenders expected to go after all or part of Warner Bros.
The deadline for initial bids is Thursday, and Warner Bros. is hoping to complete the auction process by the end of the year.
• Mary McCue Bell can be reached at mbell@washingtontimes.com.
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