Paramount and Netflix: Antitrust Challenges in Warner Bros Discovery Bidding

Paramount and Netflix are both vying for the opportunity to purchase Warner Bros. Discovery, but they are likely to encounter similar antitrust challenges along the way. According to Scott Wagner, an expert in competition law, navigating the regulatory landscape will be crucial for both companies.

Warner Bros. Discovery recently agreed to a deal to sell its film, television studios, and streaming platform HBO Max to Netflix in a cash-and-stock deal valued at $27.75 per share. However, Paramount swooped in with an all-cash tender offer of $30.00 per share, claiming it to be a better deal. This move has added more complexity to the situation.

Wagner highlights that even though Paramount may have a smaller share of the streaming market compared to Netflix, the considerations for both companies regarding antitrust issues would be quite similar. He explains that regardless of market share, a combined entity involving Paramount and Warner Bros. Discovery would undergo strict scrutiny from regulators.

One key difference between the two companies’ bids is that Paramount’s offer includes the entirety of Warner Bros. Discovery, including its Global Networks segment that features CNN and other cable assets. On the other hand, Netflix is only interested in acquiring the studio and streaming divisions, leaving the struggling cable holdings behind.

In terms of antitrust concerns, Wagner suggests that the focus will likely be more on the streaming side of the business rather than the news division. He notes that the definition of the market may encompass not just legacy media but also newer outlets like X, Substack, and podcasts.

Former President Donald Trump has also weighed in on the matter, emphasizing that CNN should be included in any sale. Regardless of the outcome, whichever company ultimately acquires Warner Bros. Discovery will need to address antitrust issues and regulatory hurdles before finalizing the deal.