Overview of the Netflix-Warner Bros. Discovery Acquisition
On December 5, 2025, Netflix announced an agreement to acquire Warner Bros. Discovery’s (WBD) film and television studios, along with its streaming service (HBO Max) and HBO cable network, in a cash-and-stock deal valued at $72 billion in equity (or $82.7 billion enterprise value). This does not include WBD’s planned spin-off of its linear cable networks (e.g., CNN, TNT, Discovery Channel), which is expected to complete by Q3 2026, with the full Netflix deal closing 12-18 months after announcement—likely late 2026 or early 2027. Netflix executives have expressed “high confidence” in regulatory approval, citing the deal’s pro-consumer and pro-innovation benefits, and included a $5.8 billion reverse termination fee payable to WBD if regulators block it on antitrust grounds.
The deal emerged from a competitive bidding process involving Paramount Skydance and Comcast, with Netflix’s offer topping rivals at $27.75 per WBD share ($23.25 cash + $4.50 in Netflix stock). However, it has already drawn bipartisan criticism from lawmakers (e.g., Sen. Elizabeth Warren and Rep. Darrell Issa) over potential market dominance, consumer harm, and reduced competition in streaming and content creation.
How the Approval Process Occurs
Mergers and acquisitions (M&A) like this one, especially in media and tech, follow a multi-step regulatory pathway under U.S. antitrust laws (primarily the Clayton Act and Hart-Scott-Rodino Act). The process is designed to prevent anti-competitive effects, such as reduced consumer choice, higher prices, or barriers to innovation. Here’s a breakdown:
| Step | Description | Timeline & Key Actions |
|---|---|---|
| Pre-Filing Notification | Parties voluntarily notify regulators if the deal exceeds HSR thresholds (e.g., $119.5 million in 2025 for U.S. deals). Netflix and WBD must submit detailed filings on market shares, competitors, and potential impacts. | Immediate upon signing (Dec. 2025); 30-day initial waiting period starts after filing. |
| Initial Antitrust Review | Agencies investigate for horizontal/vertical integration risks. For media deals, focus on subscriber market share (Netflix-WBD could hit 30-40% of U.S. SVOD), content licensing foreclosure, and theatrical distribution effects. | 30 days (extendable to 90+ with “second requests” for more data); Netflix expects 12-18 months total. |
| Remedies Negotiation | If concerns arise, parties propose divestitures (e.g., selling assets) or behavioral commitments (e.g., licensing content to rivals). | Ongoing during review; could add months. |
| Approval or Challenge | Clearance if no issues; otherwise, agencies sue to block in federal court (e.g., U.S. District Court). Parties can litigate, potentially appealing to the Supreme Court. | Final decision: 6-24+ months; past media deals like AT&T-Time Warner (2018) took 22 months. |
| Shareholder & Other Approvals | WBD shareholders vote; no major issues expected here. | Expected Q1-Q2 2026. |
| International Clearances | Parallel reviews by EU Commission, UK CMA, etc., for global antitrust. EU scrutiny could focus on content IP dominance. | Concurrent; EU reviews average 4-6 months but can extend. |
The process is public-facing, with opportunities for third-party input (e.g., from competitors like Paramount or unions like SAG-AFTRA, which have raised “serious questions” about industry impacts).
Does the FTC Have to Approve It?
Yes, the Federal Trade Commission (FTC) plays a key role, but it’s not the only approver—responsibility is shared with the Department of Justice (DOJ) Antitrust Division. They divide reviews based on industry: DOJ typically handles media/telecom (as with past deals like Disney-Fox), making it the lead here, but FTC could co-review or take over if conflicts arise. Both agencies declined comment on this deal, but analysts expect DOJ primacy due to media precedents. FTC Chair Andrew Ferguson (a Trump appointee since January 2025) has signaled tougher merger enforcement, aligning with Biden-era guidelines retained under Trump.
State attorneys general (e.g., New York AG Letitia James) can also investigate and join federal suits, adding layers.
Who Can Stop It?
Several entities could block or delay the deal, primarily through antitrust challenges. No single actor has veto power, but combined opposition could force abandonment (as in Nvidia-Arm, blocked in 2022). Key blockers include:
- DOJ Antitrust Division: Most likely to sue if it views the merger as creating a “streaming monopoly” (e.g., combining Netflix’s 280M+ global subs with HBO Max’s 128M). Past blocks: Penguin Random House-Simon & Schuster (2022).
- FTC: Could intervene on consumer protection grounds, like higher streaming prices or reduced creator options. Critics argue it would “entrench Netflix’s dominance.”
- International Regulators: EU Commission (concerns over IP foreclosure), UK CMA, or others could prohibit if global effects harm competition. Paramount’s lawyers warned of “grave uncertainty” here.
- Courts: If sued, a federal judge rules; appeals could drag to 2028+.
- Political Influence: President Trump (via appointees) could pressure DOJ/FTC, given his past (e.g., opposing AT&T-Time Warner over CNN). Reports suggest White House “heavy skepticism,” favoring Paramount; Trump favors bidder David Ellison. Bipartisan congressional pushback (e.g., Sen. Mike Lee calling it an “antitrust nightmare”) amplifies this.
- Private Challengers: Competitors (e.g., Paramount, lobbying aggressively) or theaters/unions could petition agencies or sue, citing harms like fewer theatrical releases.
Despite hurdles, Netflix argues the deal is “complementary” (e.g., boosting U.S. jobs, content investment) and pro-competitive amid YouTube’s rise. If blocked, Netflix pays the $5.8B fee but avoids integration risks. The outcome hinges on proving no substantial lessening of competition—watch for filings in early 2026.