Netflix wants to buy Warner Bros. Discovery for $72 billion.
It’s an astonishing story about business, culture, and technology. Back in 2013, Netflix was starting to make its own shows, and floating what seemed like an audacious ambition: “The goal is to become HBO faster than HBO can become us,” Netflix executive Ted Sarandos said.
Now Netflix has a deal to buy HBO, along with the iconic Warner Bros. movie and TV studio. Amazing.
But will Donald Trump let that happen?
Because the fact that Netflix and WBD announced a deal Friday morning doesn’t necessarily mean that the deal will go through. It needs regulatory approval — and in 2025, that means it needs the approval of the president of the United States, who has dispensed with the notion that there’s any distance between what he wants and what his regulators do.
That’s why Paramount CEO David Ellison, who has been competing with Netflix and Comcast for the right to buy WBD, was reportedly at the White House this week, making the case that a Netflix deal to buy HBO and the Warner studio should be shut down based on antitrust grounds.
If he’s persuasive, you could see Trump’s Department of Justice suing to block the deal — just like Trump’s DOJ sued to block the sale of Time Warner to AT&T in 2017, during his first presidency. The US lost that case, but only after a long court battle — something AT&T and Warner people complained about for years after the fact.
I’ve asked the White House for comment; a Paramount rep declined to comment.
If Ellison — whose father, Larry, is both the second richest man in the world and a longtime Trump backer — doesn’t persuade Trump and his administration to shut down the deal, the Ellisons still have other options. They could mount a hostile takeover and try to persuade WBD shareholders to reject the deal and take their offer. And/or they could sue WBD themselves, arguing that WBD executives didn’t really take their offer seriously.
Which was the not very subtle subtext of the letter Paramount’s lawyers sent out early this week, alleging that WBD had “embarked on a myopic process with a predetermined outcome that favors a single bidder.”
That didn’t sway the WBD board, which agreed to a deal that requires Netflix to pay a $5.8 billion fee if the sale doesn’t close.
The fact that WBD went with the Netflix offer — which buys part, but not all of the company, versus a Paramount bid for all of WBD — certainly seems like it has stung the Ellisons, who have been privately and publicly playing up their closeness to Trump. “We have a good relationship with the administration,” David Ellison deadpanned in October.
Now we’ll see just how strong that relationship is. Is it good enough to get the president to kill a rival’s deal?
