Senators grilled Netflix Co-CEO Ted Sarandos on Tuesday at a hearing over how his company’s proposed $82.7 billion acquisition of Warner Bros. Discovery will affect competition across the entertainment industry.
US Senator Mike Lee led the hearing in which Sarandos and Bruce Campbell, Warner Bros’ chief strategy officer, testified. While the Senate cannot itself prohibit the deal, the lawmakers demanded details on how the transaction would affect consumers, workers and competitors.
Lee, a Republican from Utah who leads the antitrust subcommittee, said the deal could decrease competition among streaming platforms and provide writers, actors and other entertainment workers fewer jobs. It could also put Netflix in a position to divert movies away from theaters and lessen rivals’ access to Warner Bros’ blockbuster content, he said.
“Netflix seeks to become the one platform to rule them all,” Lee said.
Warner Bros. coveted for studios, franchises
The Department of Justice is reviewing the transaction, along with a competing, hostile bid from Paramount Skydance.
Netflix and Paramount Skydance covet Warner Bros for its leading film and television studios, extensive content library and franchises such as “Game of Thrones,” “Harry Potter” and DC Comics’ superheroes Batman and Superman.
Paramount has argued it will have an easier regulatory path to approval. But Warner Bros has repeatedly rejected offers from Paramount, which would wind up deep in debt to finance the transaction.
Paramount’s CEO is David Ellison, whose father, billionaire Oracle co-founder Larry Ellison, has cultivated a close relationship with President Trump.
Lawmakers from both major political parties have voiced concerns that the deal will reduce competition in the streaming market.
Cory Booker, the ranking Democrat on the panel, pressed Sarandos about the role Trump would play in reviewing the deal.
Trump said shortly after the deal was announced that he would be involved.
“I don’t know if he’s involved or not,” Sarandos said.
Netflix has pointed to statistics by media analysis firm Nielsen that say Google’s YouTube accounts for more viewing time on US televisions than other streaming services, but experts say the DOJ is likely to analyze how the deal affects competition in a more specific market, such as streaming platforms that charge a monthly subscription.
Lee questioned Sarandos over the difference between the professionally produced movies and shows on Netflix and the ad-supported content featured on YouTube.
Sarandos said at the hearing that there is no publicly available breakdown of what people watch on YouTube, but that capturing US television viewing is a “zero-sum game.”
“If you’re watching YouTube, HBO Max, you’re not watching Netflix, you’re not watching CBS,” he said.
