California Attorney General Rob Bonta has called for a “full and robust review” of the $83 billion Netflix-Warner Bros. deal and Paramount’s competing $108.4 billion hostile takeover bid.
“California is taking a very close look,” Bonta said in a statement on Friday. “We are committed to fighting market consolidation that we find unlawful.”
A spokesperson for Bonta’s office previously told TheWrap in November that “further consolidation in markets that are central to American economic life does not serve our economy, consumers, or competition well.”
In Friday’s statement, Bonta noted that market consolidation has led to “increased unaffordability, a loss of good-paying job opportunities, and fewer choices for consumers.” He added that California’s film and entertainment industry “not only has historical importance to our state,” but is also is a “critical sector that buoys the state’s economy of California and touches the lives of Americans daily.”
Bonta’s review comes as Guggenheim Securities analyst Michael Morris said in a note to clients that Netflix’s regulatory team disclosed that “13-14 state attorneys general—both Democratic and Republican—are actively investigating the WBD deal, reflecting the increasingly active role of states in merger review.”
In addition to the scrutiny from state attorneys general, lawmakers on Capitol Hill and Hollywood creatives and unions have expressed concerns about the Netflix deal and Paramount bid’s potential impact on competition, consumer prices, jobs in Hollywood and more.
Netflix co-CEO Ted Sarandos and Warner Bros. chief strategy officer Bruce Campbell were grilled by Senate lawmakers during an antitrust hearing earlier this month. The ranking Republican of the Senate Judiciary’s antitrust subcommittee has since sent the pair follow-up questions asking for specifics around their plans on content licensing, production and spending and how Warner Bros. would remain independent following the deal. Sen. Mike Lee also asked how YouTube exerts pricing pressure on the two companies.
Warner Bros.’ board has reopened talks with Paramount CEO David Ellison to submit his “best and final” offer by Feb. 23, though Netflix retains the right to match any offer. Shareholders will vote on the Netflix deal during a special meeting on March 20 at 8 a.m. ET.
