Republican Rep. Darrell Issa is targeting a potential bid by Netflix for Warner Bros. Discovery’s streaming and studio assets, warning that an acquisition would raise antitrust concerns that could harm consumers and Hollywood alike.
“As you are aware, Netflix is already the dominant streaming platform in the United States and permitting it to absorb a major competitor raises antitrust concerns that could result in a harm to consumers,” Issa wrote in the Nov. 13 letter addressed to U.S. Attorney General Pam Bondi, FTC chairman Andrew Ferguson and Department of Justice antitrust division assistant attorney general Gail Slater.
“With more than 300 million global subscribers and a vast content library, Netflix currently wields unequaled market power,” the letter continues. “Adding both HBO Max’s subscribers and Warner Bros.’ premier content rights would further enhance this position, reportedly pushing the combined entity above a 30 percent share of the streaming market: a threshold traditionally viewed as presumptively problematic under antitrust law.”
Issa added that consolidation between the two companies would “diminish incentives to produce new content and major theatrical releases,” which could “undermine opportunities for the full range of industry professionals both in front of and behind the camera.”
In the letter, Issa cited a speech Netflix co-CEO Ted Sarandos made at a Time100 event in April, in which he said making movies for the big screen is an “outdated concept.”
“I appreciate the Administration’s determined efforts to promote competitive markets and establish a record of regulatory common sense,” Issa’s letter concludes. “I urge you continue to protect a critical American industry, enhance consumer choice, and safeguard vital American jobs.”
Representatives for Netflix and Warner Bros. Discovery did not immediately return TheWrap’s request for comment on the letter.
The letter comes as Netflix, Comcast and Paramount are all preparing bids for part or all of Warner Bros. Discovery, according to The Wall Street Journal.
TheWrap previously reported that both Netflix and Comcast were both kicking the tires on the company’s studio and streaming business. Paramount has also submitted three separate offers for the entire company, which ranged between $19 of $23.50 per share and were rejected by WBD’s board for being too low.
An individual familiar with the matter told TheWrap that the first round of non-binding bids are due Nov. 20, with a decision on a possible deal expected to be made around Christmas.
Warner Bros. Discovery launched a strategic review of alternatives last month after receiving “unsolicited interest” from “multiple parties.”
In addition to continuing on with its planned split into Warner Bros. and Discovery Global, which is on track for completion in April, the company’s board is also considering separate transactions for those two companies or a deal for the entire combined company. WBD also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
Shares of Warner Bros. Discovery, which are trading at $22.98 apiece as of Friday morning, are up 133% in the past year, 115.6% year to date, 149.5% in the past six months and 27.8% in the past month.
