Bidders for Warner Bros Discovery face barrage of political and regulatory risks
By Dawn Chmielewski and Chris Sanders
Nov 21 (Reuters) – Paramount Skydance, Comcast and Netflix are bidding to buy Warner Bros. Discovery, but each company’s bid faces its own political and regulatory risks, Reuters reported on Thursday. Factors to watch include market share imbalances each bidder could bring, investors and public comments made by U.S. President Donald Trump or his administration about each company.
The White House could not immediately be reached for comment.
Paramount Skydance: Paramount may have insider permission due to its White House connections and the significant amount of money Larry Ellison, the world’s second-richest person, could provide to Warner Bros. Discovery to complete the deal. His son, Paramount CEO David Ellison, benefits from Trump’s support, which could help ease regulatory hurdles. Democratic Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal worry that approval of the deal could be tainted by political favoritism, citing Paramount Global’s $16 million donation to Trump’s Presidential Library. The payment, made before the merger with Skydance that put Ellison at the helm of the media company, settled a lawsuit filed by Trump over editing of his “60 Minutes” interview.
However, if the offering includes foreign investors, the size of their potential stakes could trigger review by the Committee on Foreign Investment in the United States. The merger of Paramount’s and Warner Bros’ cable television networks could raise concerns about market concentration for the Justice Department.
Outside the US, regulators will also weigh in on foreign direct investment regimes, while European officials will examine media pluralism rules, with the combination of CNN and CBS being considered.
Comcast: The Philadelphia-based cable giant faces a different political climate. Trump has repeatedly denigrated the company for NBC’s coverage of his second term in office, calling it a “Concast” and criticizing Chairman Brian Roberts.
This hostility could complicate the Justice Department’s stance, but any opposition would have to be based on legal and antitrust concerns rather than the White House’s preference.
The Justice Department tried to block AT&T’s $85.4 billion acquisition of Time Warner, whose CNN network drew Trump’s ire during his first term in the White House. A federal judge ultimately cleared the way for the settlement in 2018.
The broadcast leader has his own potential political struggles. According to the Hollywood Reporter, the Pentagon criticized the October 2025 TV series “Boots,” about a gay sailor. A Department of Defense representative said, “Unlike Netflix, whose leadership continually produces and feeds nonsense that arouses viewers and children, we will not compromise our standards to satisfy an ideological agenda.” Even before bids were awarded, Republican Sen. Roger Marshall and Rep. Darrell Issa said allowing Netflix to take over the company would cede content rights to HBO Max and Warner Bros., which could raise prices and reduce options for consumers.
But market dominance is in the eye of the beholder. According to Nielsen, YouTube has more television watched in the US than its closest rival, Netflix.
Competition and Antitrust Risk Given past practice, the Department of Justice is likely to conduct antitrust oversight on any deal. Warner Bros. Discovery does not retain streaming TV assets, and as a result, Federal Communications Commission Chairman Brendan Carr likely will not have jurisdiction.
Paramount Skydance: The merger with Warner Bros Discovery will combine two major Hollywood studios, two streaming platforms (HBO Max and Paramount) and two news operations (CNN and CBS). Respondents are likely to be concerned about the number of films reaching theaters; Comscore estimates the combined entity will control 32% of the U.S. and Canadian box office based on 2025 revenue.
The creative community may face fewer employment options if there are fewer movies or, for example, the merger of CBS News and CNN. Sports rights concentration (having CBS and TNT under one umbrella) could potentially increase prices for consumers.
Combining Universal Pictures with Warner Bros. Studios would create an even larger theatrical powerhouse that accounts for more than 43% of the North American box office, according to Comscore. This level of market share could alarm regulators and exhibitors and raise questions about diminishing opportunities for filmmakers and talent.
The Justice Department will need to evaluate whether such consolidation harms competition in theatrical distribution. During Trump’s first term, the Justice Department approved a deal of similar size: Walt Disney’s acquisition of 21st Century Fox. This deal brought together two movie studios that combined represented 38% of the domestic box office at the time, according to Comscore.
The streaming leader’s proposal won’t impact theatrical releases but will reshape the subscription video market. (A source familiar with the matter confirmed Bloomberg’s report and said Netflix will continue to distribute movies in movie theaters). Adding HBO Max’s 128 million subscribers to Netflix’s more than 300 million subscribers will create a formidable player.
Regulators may ask whether this scale limits consumer choice, but the definition of market is controversial: YouTube, TikTok and other platforms command significant amounts of viewing time. The Justice Department must decide whether Netflix’s dominance poses a threat to competition or simply reflects changing consumer habits.
(Reporting by Dawn Chmielewski in Los Angeles and Chris Sanders in Washington; Editing by Richard Chang)
