Streaming giant Netflix Inc.’s (NASDAQ:NFLX) $82.7 billion merger with mass media conglomerate Warner Bros Discovery Inc. (NASDAQ:WBD) is drawing sharp criticism from antitrust advocates, such as Matt Stoller of the American Economic Liberties Project, a non-profit founded to combat monopolist corporations.
The Merger Will Be ‘A Disaster For America’
In his newsletter on Sunday, Stoller said that the merger would hand the world's largest streaming platform control of a major film studio and one of Hollywood's deepest content libraries.
Stoller, who has championed anti-monopolistic stances across ideological lines, supporting Sen. Elizabeth Warren (D-Mass.) and Sen. Josh Hawley (R-Mo.) in recent years, has called this transaction “a recipe for monopolization,” adding that it was unlikely to sail through since it “would be a pretty straightforward challenge for an antitrust lawyer under the Clayton Act.”
Stoller drew comparisons to other recently challenged mergers, such as Penguin's failed attempt to acquire Simon & Schuster. “The case against the merger was pretty simple, five book publishers combining into four meant fewer opportunities to publish interesting books and less money for writers,” he said.
He warned that this merger would essentially “hold a noose around the theatrical marketplace,” while noting that it echoes failed past attempts of consolidation in the entertainment industry.
In the same vein, he said the proposed Netflix-Warner deal will “crush the bargaining power of writers, directors, and actors.”
“Every single time, the merger has been a failure. Nevertheless, they are still at it,” he said, referring to Warner Bros’ multiple ownership changes over the past couple of years.
In addition to the regulatory hurdles facing the deal, Stoller also pointed to the bipartisan political backlash, with Republican Senator Mike Lee (R-Utah) calling it the most concerning deal in over a decade. Followed by former President Joe Biden’s antitrust chief, Jonathan Kanter, warning that it could “freeze” Warner Bros’ operations for over a year.
Neither Netflix nor Warner Bros Discovery immediately responded to Benzinga’s request for a comment on this matter. This story will be updated as soon as we receive a response.
Paramount Alleges Biased Auction
Besides regulatory hurdles, the deal is already facing pushback from competitors, with Paramount Skydance (NYSE:PSKY) alleging that the auction was biased and predetermined in favor of Netflix.
President Donald Trump, who is known for being close to Paramount CEO David Ellison and his family, said that he will be more actively involved in the federal review of the transaction. “I’ll be involved in that decision,” Trump said, while noting that the combined companies would command a “very big market share” that “could be a problem.”
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