Netflix Under Investigation by DOJ Over Warner Bros Merger and Industry Leverage
The high-stakes multibillion-dollar tug-of-war for Warner Bros. Discovery has escalated into a full-scale legal war as Netflix and Paramount battle for dominance. With only 24 hours remaining for the WBD board to weigh a rival “best and final” offer from David Ellison’s Paramount-backed bid, the Department of Justice has officially stepped into the fray.
Federal regulators have issued a civil investigative demand to determine if a Netflix-WBD merger would violate the Clayton or Sherman Acts by creating a media monopoly. This move follows weeks of tension and a sudden leadership change at the DOJ’s Antitrust Division, where Omeed Assefi recently took over the investigation.
The demand for documents and sworn testimony from industry leaders marks a significant hurdle for the Ted Sarandos-led streamer, which is seeking to acquire WBD for approximately $83 billion. One veteran producer described the situation as going nuclear, while noting that such a massive consolidation was bound to attract federal scrutiny.
The timing of the investigation is particularly sensitive, as WBD shareholders are scheduled to vote on the merger recommendation on March 20. Recipients of the DOJ’s demands have until March 23 to comply, a date that falls just days after the pivotal shareholder meeting.
Paramount has already signaled its intent to pursue legal action to block the deal, arguing that the merger would essentially stifle competition across the global streaming landscape. During a recent appearance on the BAFTA red carpet in London, Netflix co-CEO Ted Sarandos appeared unfazed by the pressure, dismissing Paramount’s efforts.
He challenged his rivals to just put a better deal on the table and see if you can win, maintaining that Netflix is far from a monopoly. Netflix’s legal team has echoed this sentiment, asserting that its success is built on innovation and investment that benefit consumers rather than exclusionary conduct.
Despite the firm denials from Netflix’s outside counsel, who claimed they had seen no notice of a monopolization probe, the DOJ’s salvo has been sent to filmmakers across Hollywood.
The investigation appears to have gained momentum following a combative Senate subcommittee hearing earlier this month. There, Sarandos faced intense questioning from lawmakers regarding the cultural and economic implications of such a massive merger in the entertainment sector.
Adding another layer of complexity to the corporate battle is the shifting stance of the White House. While President Trump has publicly stated he shouldn’t be involved in deciding the fate of WBD and its assets like CNN, he has held multiple meetings with both the Ellison family and Sarandos.
This political backdrop has turned a corporate acquisition into a broader debate over media influence and regulatory power in a rapidly changing digital economy. Amidst this corporate chaos, Ted Sarandos remains a central figure in the entertainment world, recently making several high-profile appearances at international awards ceremonies.
Under his leadership, Netflix has continued to expand its original content slate, recently celebrating the massive success of the thriller Society of the Snow and the latest season of Bridgerton. Sarandos has also been instrumental in securing long-term partnerships with creators like Greta Gerwig for the upcoming Chronicles of Narnia adaptations.
Warner Bros. Discovery, led by David Zaslav, also has a packed slate of upcoming releases that have made it such a prize for potential buyers. The studio is currently preparing for the release of Supergirl: Woman of Tomorrow, starring Milly Alcock, as part of James Gunn’s new DC Universe.
Additionally, fans are eagerly awaiting the second season of The Last of Us and the Game of Thrones prequel A Knight of the Seven Kingdoms, both of which are expected to be major anchors for whichever streaming platform ultimately controls the library. As the March 20 shareholder vote approaches, the industry is bracing for a decision that could fundamentally reshape how movies and television are produced and distributed.
If the Netflix deal moves forward, it would create a streaming behemoth with over 450 million combined subscribers. However, with the DOJ now actively investigating the potential for a monopoly, the path to a final signature remains more uncertain than ever.
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