Netflix Faces Tough Questions in Senate as Warner Bros Merger Draws Scrutiny
Netflix has struggled to convince US lawmakers that its proposed takeover of Warner Bros Discovery would serve the interests of consumers, workers and the wider entertainment industry, as bipartisan concerns mount over the scale of the deal.
During a hearing on Tuesday, members of the US Senate antitrust subcommittee raised alarms about the potential impact of the $82bn (£61bn) transaction, which is currently being reviewed by the Department of Justice. Lawmakers questioned whether the merger would reduce competition, push up subscription prices and further undermine the future of cinemas.
If approved, the deal would place Warner Bros’ film and television studios, along with the HBO Max streaming platform, under Netflix’s control. At the same time, Netflix faces competition from a rival bid led by Paramount Skydance, which continues to pursue its own takeover of Warner Bros Discovery.
The Senate hearing underscored unease across party lines, though the final decision on whether the merger proceeds rests with federal regulators.
Appearing before the subcommittee, Netflix co-chief executive Ted Sarandos was pressed on a range of issues, including the fate of theatrical releases, the impact on entertainment workers and whether consumers would ultimately pay more.
Sarandos said Netflix would maintain a 45-day theatrical release window for Warner Bros films, in line with current industry practice, and said the studio would continue to operate largely as it does today. He argued that the merger would expand consumer choice while lowering costs, noting that a large majority of HBO Max subscribers already pay for Netflix as well.
He also claimed the deal would lead to job creation in the United States.
Some lawmakers remained unconvinced. Republican Senator Mike Lee warned that combining two major employers in the same sector could weaken competition for labour and reduce opportunities for workers.
While several Republicans focused on market concentration, others raised cultural concerns. Senator Eric Schmitt criticised Netflix’s programming, accusing the company of promoting what he described as “overwhelmingly woke” content.
Notably absent from the hearing was David Ellison, chief executive of Paramount, whose company has been attempting to acquire Warner Bros Discovery with backing from the Ellison family. Paramount has argued that its rival proposal, valued at $108bn, offers a better outcome.
Both bids have drawn criticism from those who fear either deal would concentrate too much power in the hands of a single media giant. Democratic Senator Cory Booker said Paramount’s absence from the hearing was “frustrating” and revealed that Ellison had declined an invitation to testify.
“With either merger, another corporation will gain greater control over what we watch, what we hear and the news we consume,” Booker said.
Netflix has recently revised its offer in an effort to strengthen its position, announcing last month that it would fund the acquisition entirely with cash rather than a combination of cash and shares.
Lawmakers also examined whether Alphabet’s YouTube should be considered a major competitor to Netflix. Sarandos argued that the platforms compete directly for content, audiences and advertising revenue.
“YouTube is not just cat videos anymore,” he said. “YouTube is TV.”
Some senators, including Lee, questioned that characterisation, expressing doubt that YouTube should be viewed as a true rival. Paramount has also challenged Netflix’s claims on that front.
As regulatory scrutiny intensifies, the fate of one of the largest proposed mergers in entertainment history remains uncertain.
