Netflix is ramping up a major charm offensive with Warner Bros. Discovery and US regulators as it pursues the media giant’s streaming service and Hollywood studio – and rival bidders fret that it may be working, On The Money has learned.
The lobbying blitz by Netflix’s Chief Executive Ted Sarandos – which is looking to soothe antitrust concerns not only with the Trump administration but also members of Warner Bros. Discovery’s board – has begun to chip away at Paramount Skydance’s lead in the auction, according to people with knowledge of the matter.
The emergence of Netflix as a serious contender comes as the bidding war enters its next stage. WBD is expected to hold a second round of bids in the coming days where players can up their offers or drop out of the process, sources close to the situation told The Post.
As The Post reported, Paramount Skydance – run by Trump supporters David and Larry Ellison – has submitted a bid around $25 a share or around $60 billion for all of WBD. In addition to the top-rated Warner Bros. studio, WBD owns the HBO Max streaming service as well as cable properties such as CNN and HBO.
Cable giant Comcast has made a bid for the WBD studio and streaming service and Netflix has, too. Netflix has been considered more of a dark horse since it has traditionally shunned big acquisitions and its antitrust issues in this deal have been viewed as thorny.
Now, however, insiders say Netflix’s charm offensive is sowing doubts about the inevitability of Paramount Skydance’s bid from an antitrust standpoint – both at WBD and among the staffers at DOJ’s antitrust division, who will make a recommendation to their boss Gail Slater.
Netflix’s legal eagles appear to have made headway convincing the WBD board with an argument about something called “category ambiguity,” a theory that antitrust law doesn’t necessarily apply to streaming services because of the prevalence of content on YouTube and social media; it’s not something that can be cornered and price gauged in the traditional sense.
As a result normal antitrust concerns would not apply to the combination of Netflix, the No. 1 streamer in the world, with WBD’s No. 3 ranked HBO Max.
WBD’s board is increasingly skeptical that Netflix will face a serious antitrust challenge in its bid to buy just WBD’s streaming service, HBO Max, and its studio, as is being argued by Paramount Skydance’s legal advisers. DOJ staffers, meanwhile, are now discussing the antitrust implications of combining Paramount Skydance’s studio with Warner Brothers.
“It’s total horses–t from an antitrust standpoint that they’re selling to the Warner board but it’s working,” said one rival legal official on the deal. “They made this largely a two-horse race” between Paramount Skydance and the streaming giant.
A Netflix spokesman had no immediate comment. A rep for WBD CEO David Zaslav had no comment.
With Trump publicly supporting the Ellisons’ various acquisition forays, the father-son duo seemed to have had the inside track on gaining approval for their planned purchase of WBD. And they still might: As The Post has reported, Trump wants them to buy WBD for several reasons including they will neutralize the anti-MAGA commentary on CNN.
Trump meanwhile, holds a particular animus for its CEO Brian Roberts for running the MAGA-hating cable channel MSNBC. Plus it too would be combining two major studios.
But Netflix is said to be particularly appealing to members of the WBD board because it wants just the studio and streaming service at a time when WBD was in the middle of breaking into two companies.
Insiders say Zaslav’s breakup idea was to get top dollar for the streaming and studio, which would receive a lower valuation combined with old media cable properties like CNN, as Paramount Skydance is proposing in its offer.
One problem for Netflix, of course, is whether “category ambiguity” really does apply to streaming. Lawyers for Paramount Skydance have argued to the WBD board that the Trump DOJ will block a combination of two top streaming services combined with a major studio that might be downsized given Netflix’s streaming-centric business model.
Another issue involves Netflix investors who aren’t too happy with its acquisition plans. Over the past month, shares of Netflix have fallen nearly 10% when it became clear earlier in the month it was planning to bid on WBD.
