By Jody Godoy
Feb 3 (Reuters) – Netflix Co-Chief Executive Officer Ted Sarandos faces a grilling in the U.S. Senate on Tuesday at a hearing over how his company’s proposed $82.7 billion acquisition of Warner Bros Discovery will affect competition in the streaming entertainment industry.
U.S. Senator Mike Lee will lead the hearing where Sarandos and Bruce Campbell, Warner Bros’ chief strategy officer, are expected to testify. While the Senate cannot itself prohibit the deal, the hearing allows lawmakers to demand details from Netflix on how the transaction would affect consumers, workers and competitors.
The U.S. Department of Justice is reviewing the transaction, along with a competing, hostile bid from Paramount Skydance.
Both Netflix and Paramount Skydance covet Warner Bros for its leading film and television studios, extensive content library and major 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 U.S. President Donald Trump.
Lee, a Republican from Utah who leads the antitrust subcommittee, has been critical of Netflix’s proposed acquisition of Warner Bros since the deal was announced in December. Lawmakers from both major U.S. political parties have voiced concerns that the deal will reduce competition in the streaming market.
Netflix has pointed to statistics by media analysis firm Nielsen that say Google’s YouTube accounts for more viewing time on U.S. 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 has also questioned whether Netflix truly intends to acquire Warner Bros, or whether it is attempting to slow competition from Warner Bros during an antitrust review by the Department of Justice that could take more than a year.
The Republican senator called on Netflix to disclose whether its personnel have had access to Warner Bros’ sensitive information, which he said could allow the streaming service to gain an advantage before the deal closes.
“Access to such information could enable anticompetitive behavior, including replication of projects in development, strategic planning, or algorithmic targeting,” Lee said in a letter to Netflix in January.
(Reporting by Jody Godoy in Los Angeles; Editing by Matthew Lewis)
Comments