Netflix-Warner Bros. Discovery Deal: A Risky Bet, Says Former DOJ Antitrust Official

Regulatory Risks of the Netflix-WBD Deal

• ⚠️ Jonathan Kanter, former Assistant Attorney General for the Antitrust Division at the DOJ, likens the Netflix-Warner Bros. Discovery deal to the failed Spirit-JetBlue merger, highlighting significant regulatory risk.
• 🎯 The primary concern for sellers is certainty of closing, which is jeopardized by extensive federal, state, domestic, and international regulatory scrutiny.
• ⏳ Even if a deal fails and a breakup fee is paid, the business harm incurred during the prolonged regulatory review period could be substantial.

Potential Shareholder Lawsuits and Opposition

• ⚖️ Kanter suggests that if the deal fails due to regulatory challenges, Paramount could argue that the Warner Bros. Discovery board did not fulfill its obligations to shareholders.
• 🗣️ He anticipates significant opposition emerging from various factions, including theaters, states, creators, and competitors, all concerned about the transaction's implications.

The Case Against Consolidation in Media

• 📉 The argument that consolidation leads to efficiency and increased content investment, often heard in antitrust cases, has historically not panned out, citing examples like AOL-Time Warner and AT&T-Time Warner.
• 🧩 Warner Bros. Discovery's assets, particularly its streaming capabilities (HBO) and extensive content library, are described as singular and unique, suggesting they might be best kept separate.
• 🚫 The speaker notes that the industry has heard the