Netflix–Warner Bros Deal Draws Senate Scrutiny

Key Moments

Netflix Co-CEO Ted Sarandos is scheduled to testify before a U.S. Senate panel on Tuesday about the proposed $82.7 billion takeover of Warner Bros Discovery.
The U.S. Department of Justice is reviewing Netflix’s bid alongside a rival hostile offer from Paramount Skydance.
Senator Mike Lee has questioned whether Netflix is genuinely seeking to complete the deal or attempting to stall a key competitor during a potentially lengthy antitrust review.

Senate Hearing Targets Competitive Impact of Mega-Deal

By Jody Godoy

Feb 3 (Reuters) – Netflix Co-Chief Executive Officer Ted Sarandos is set to face rigorous questioning in the U.S. Senate on Tuesday over how the company’s proposed $82.7 billion acquisition of Warner Bros Discovery could reshape competition in the streaming entertainment market.

U.S. Senator Mike Lee will chair the session, where Sarandos and Bruce Campbell, chief strategy officer at Warner Bros, are expected to appear. The Senate does not have the authority to block the transaction, but the hearing provides lawmakers a platform to seek detailed explanations from Netflix about the potential consequences for consumers, employees and rival firms.

Regulatory Review and Competing Bids

The U.S. Department of Justice is currently examining the deal, as well as a competing hostile proposal from Paramount Skydance.

Both Netflix and Paramount Skydance are seeking control of Warner Bros, drawn by its prominent film and television production operations, its sizable content library and its flagship franchises, including “Game of Thrones,” “Harry Potter” and DC Comics characters such as Batman and Superman.

Paramount has maintained that its offer would encounter fewer regulatory hurdles. However, Warner Bros has repeatedly turned down Paramount’s advances, which would leave Paramount burdened with substantial debt to finance the acquisition.

Aspect	Netflix Proposal	Paramount Skydance Proposal
Type of bid under DOJ review	Proposed acquisition of Warner Bros Discovery	Competing hostile bid for Warner Bros
Key attraction	Film and TV studios, content library, major franchises	Film and TV studios, content library, major franchises
Financing implications for bidder	Not specified in article	Would “wind up deep in debt” to complete transaction

Political Connections and Growing Concerns

Paramount’s CEO is David Ellison. His father, Larry Ellison, a billionaire and co-founder of Oracle, has developed a close relationship with U.S. President Donald Trump.

Lee, a Republican senator from Utah who heads the antitrust subcommittee, has been openly critical of Netflix’s plans since the Warner Bros transaction was unveiled in December. Lawmakers from both major U.S. parties have raised alarms that the combination could diminish competition among streaming providers.

Market Definition and Antitrust Questions

Netflix has highlighted data from media analytics company Nielsen indicating that Google’s YouTube accounts for more viewing time on U.S. televisions than other streaming platforms. Analysts, however, say the Department of Justice is likely to focus on the impact of the deal within a narrower segment, such as subscription-based streaming services.

Lee has also raised doubts about Netflix’s intentions, asking whether the company truly plans to complete the takeover or is instead trying to hinder Warner Bros as a rival during what could be an antitrust review by the Department of Justice lasting more than a year.

Access to Sensitive Information Under the Microscope

The senator has urged Netflix to reveal whether any of its employees have been able to view confidential Warner Bros information, warning that such access could give Netflix a head start ahead of any deal closing.

“Access to such information could enable anticompetitive behavior, including replication of projects in development, strategic planning, or algorithmic targeting,” Lee said in a letter to Netflix in January.