Days after Netflix announced that it had won the bidding war over Warner Bros. Discovery – thanks to a deal valued at $82.7 billion – it appears that the deal could run into a considerable obstacle: Donald Trump. The US president said the duo’s combined size “could be a problem.”
Speaking at an event at the John F. Kennedy Center in Washington DC, the US President commented that Netflix’s already “very large market share” would likely “increase a lot” if the deal was allowed to go ahead.
He’s not wrong either.
Current market share estimates suggest that Netflix and HBO Max (WBD’s streaming service) control a combined 34% of the US streaming market, which is above the level of control that the US Department of Justice’s antitrust rules would allow after a merger. These figures, however, do not include YouTube.
It is believed that Netflix’s lawyers will argue that Netflix and WBD’s market share is much smaller when Google’s platform is taken into account, and statistics show that YouTube has the largest video streaming audience share by far. They may also try to downplay WBD as a rival to streaming and instead focus on its usefulness as a production studio and content library.
Personal policy
Beyond market share considerations, the President’s comments about his desire for an unprecedented level of involvement in the negotiation have led some to speculate whether more personal inclinations could play a role in the decision-making.
Trump has had some very positive things about Netflix co-CEO Ted Sarandos, calling him “a great person” who has “done some of the best work in the history of film.”
However, reports also suggest (via The Guardian) that President Trump would have preferred Paramount’s bid to buy WBD to win. David Ellison is the CEO of Paramount and the deal to buy WBD was backed by his father, Larry Ellison, a strong Trump ally. Larry Ellison is also at the center of the TikTok purchase in the United States.
David Ellison directly referred to having a “trump card” (via The Independent) in his pocket to help make a potential Paramount WBD acquisition happen before the Netflix deal is chosen, and more recently, Paramount described the Netflix deal as “unfair.”
None of this is to say that personal politics will be a key consideration for the administration, but it adds fuel to the fire of speculation that the Netflix deal could ultimately be blocked.
To block or not to block
All that said, we already covered these arguments and more in our analysis with experts on what the Netflix and Warner Bros. deal could mean for you. TL;DR: More content on one platform, but prices are likely to increase and working in the entertainment industry could become even more challenging.
So to some extent, while Trump’s involvement isn’t normal, it’s not unreasonable that Netflix has already considered every possible way the deal could collapse, and despite these hurdles, it’s so confident things will get approved that the deal includes a $5.8 billion breakup fee (via The Hollywood Reporter).
Not only would this pay off if Netflix pulls out; Netflix pays this fine if the deal does not go through for any reason. That’s a lot of money to offer if there’s no reasonable certainty that regulators will approve the acquisition.
We’re still in the early days of a deal that isn’t expected to close until late 2026, potentially not even until we get to 2027. That is, we have plenty of time to see some twists and turns before we know whether the HBO Max rebranding saga will stop at ‘Netflix’ or something else entirely.
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