TLDR
- Trump says Netflix-Warner Bros. merger “could be a problem” due to combined market share concerns
- WBD stock dropped 1.7% to $25.64 in premarket trading after Trump’s antitrust warning
- President confirms he will personally decide whether the $82.7 billion deal gets approved
- Deal faces opposition from both political parties and Hollywood unions over competition concerns
- Netflix must pay $5.8 billion termination fee if regulators block the acquisition
Warner Bros. Discovery shares tumbled Monday morning after President Trump questioned whether Netflix should be allowed to complete its $82.7 billion acquisition.
Warner Bros. Discovery, Inc., WBD
Trump told reporters at the Kennedy Center Honors that the combined streaming market share “could be a problem.” The president confirmed he met with Netflix co-CEO Ted Sarandos at the Oval Office last week.
“They have a very big market share, and when they have Warner Bros, that share goes up a lot,” Trump said. He made clear he would be personally involved in the regulatory approval process.
WBD stock fell 1.7% to $25.64 in premarket trading following the comments. Netflix shares moved higher, gaining 1.07% to $101.33.
Trump praised Netflix as “a great company” but stressed the deal must “go through a process.” When asked if Sarandos made any guarantees, Trump said “No, not at all.”
Deal Structure and Terms
Netflix announced the Warner Bros. acquisition Friday after beating out Paramount Skydance and Comcast in a bidding war. The deal values the studio and HBO Max streaming business at $27.75 per share.
WBD shareholders would receive $23.25 in cash and $4.50 worth of Netflix stock per share. Warner Bros. Discovery plans to spin off its TV network business into a separate company called Discovery Global.
The streaming giant agreed to a $5.8 billion termination fee if the deal collapses or regulators step in. That’s the biggest breakup fee in the entertainment industry.
Political and Industry Pushback
The merger drew immediate fire from Washington. Republican Senator Roger Marshall called it “the largest media takeover in history” and warned about one company controlling both content and distribution.
“Prices, choice, and creative freedom are at stake,” Marshall said in a statement. He urged regulators to take a hard look at consumer harm.
The Writers Guild of America opposed the deal even more forcefully. “The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” the union said.
The WGA warned the merger would eliminate jobs, lower wages, and reduce content variety for viewers. Hollywood unions are united against the consolidation.
Netflix Remains Confident
Sarandos told analysts the company feels “highly confident in the regulatory process.” He described the deal as “pro-consumer, pro-innovation, pro-worker, it’s pro-creator, it’s pro-growth.”
Netflix plans to work closely with government officials and regulators. Sarandos said the company expects to secure all necessary approvals.
Sources told Reuters that Paramount’s bid had funding issues while Comcast’s offer provided fewer immediate benefits to WBD shareholders. That cleared the path for Netflix’s winning proposal.
Trump’s involvement adds uncertainty to the timeline. The deal aims to close late next year after the Discovery networks spin-off is complete.
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Source: https://blockonomi.com/warner-bros-discovery-wbd-stock-trump-throws-cold-water-on-netflix-merger/