US President Donald Trump said he plans to personally look into Netflix’s proposed $83 billion purchase of Warner Bros. Discovery (WBD). Trump suggested that Netflix already holds a major position in the market, and buying WBD could make it even bigger.
Trump’s comments could be a setback for Netflix co-CEO Ted Sarandos, who, according to Bloomberg, visited the White House in mid-November for a private meeting with President Donald Trump and left feeling that Netflix would not face resistance from the White House, something his rival Paramount Skydance was loudly claiming.
Trump says he’ll take a close look at Netflix’s WBD deal
“They have a very big market share,” Trump told reporters at the Kennedy Centre on Sunday. “When they have Warner Bros., that share goes up a lot. So, I don’t know. That’s going to be for some economists to tell, and also, and I’ll be involved in that decision too.” Trump said that Ted Sarandos, Netflix’s co-CEO, met him in the Oval Office last week.
The president praised Sarandos, calling him “fantastic” and comparing him to old-school Hollywood legend Louis B. Mayer, the man behind MGM’s rise. But despite the praise, Trump mentioned that Netflix’s size “could be a problem,” especially after adding the huge WBD catalogue. “I met with Ted. I think he’s fantastic. I think, in the history of Hollywood, there’s almost nothing like what he’s done,” Trump said, likening Sarandos to Louis B. Mayer, co-founder of MGM, as an entertainment empire builder. “But it is a big market share, there’s no question about that. It could be a problem.”
Despite facing resistance from a few prominent Hollywood figures, Netflix outbid media giants Comcast and Paramount Skydance on Friday to seal the deal. According to the development, the company will take over most of the Warner Bros. Discovery portfolio, except for some cable channels that will be spun off into a new company led by CNN. Netflix was quick enough to announce its mega deal among its customers moments after signing.
Paramount Skydance, run by David Ellison, had wanted to buy all of WBD but lost out to Netflix. The company even wrote a letter to WBD asking for a fair evaluation, according to Reuters.
Sarandos met Trump in Oval Office
According to Bloomberg, citing sources familiar with the meeting between Trump and Sarandos, Trump told Sarandos that Warner Bros. should sell to the highest bidder. Sarandos agreed and explained why Netflix’s offer made the most sense. He also reminded Trump that Netflix had faced tough times in the past and had even lost subscribers, so it was hardly an unbeatable giant.
If monopoly is a concern, the Netflix boss told Trump that Netflix does not own cable channels or broadcast networks like its competitors. He said Netflix is only the 5th or 6th biggest TV distributor in the US, and buying Warner Bros. would only make it about the size of YouTube.
Netflix, once mocked as a “DVD-by-mail company” and once compared to the “Albanian army,” is now set to control one of Hollywood’s oldest studios. The announcement has sent ripples across the industry.
As part of the agreement, Netflix has included a $5.8 billion breakup fee, money it must pay if the deal collapses due to antitrust issues or other legal challenges. The Washington Post earlier reported that Warner Bros. Discovery had already held discussions with the Trump administration’s Justice Department and the Federal Trade Commission while exploring possible buyers.
If the deal clears regulatory scrutiny and any hurdles from Trump, Netflix will take control of Warner Bros.’ film and TV studios, a vast library of old and new titles, HBO, and HBO Max, which is also a direct streaming competitor. Netflix and Amazon Prime are currently the two biggest subscription streaming platforms in the U.S. In October, Netflix had around 69 million paying U.S. subscribers, nearly three times the number on HBO Max, according to data firm Antenna.