So here's a fun question: What happens when you let the world's biggest streaming platform buy one of Hollywood's most iconic film studios with one of the industry's deepest content vaults? According to Matt Stoller of the American Economic Liberties Project, you get what he's calling "a disaster for America."
The proposed $82.7 billion merger between Netflix Inc. (NFLX) and Warner Bros Discovery Inc. (WBD) isn't just raising eyebrows among antitrust advocates. It's setting off alarm bells across the political spectrum, from Elizabeth Warren on the left to Josh Hawley on the right, with both sides seemingly united in their skepticism of yet another mega-consolidation in entertainment.
A Recipe for Monopolization
In his newsletter published Sunday, Stoller didn't mince words. He's spent recent years championing anti-monopolistic positions across ideological lines, supporting both Sen. Elizabeth Warren (D-Mass.) and Sen. Josh Hawley (R-Mo.), and he sees this transaction as "a recipe for monopolization." More importantly, he thinks it's vulnerable: "This would be a pretty straightforward challenge for an antitrust lawyer under the Clayton Act."
His argument boils down to this: Netflix already dominates streaming, and handing it control over Warner's film production capabilities and content library creates the kind of vertical integration that makes competition nearly impossible. Stoller drew comparisons to Penguin's failed attempt to acquire Simon & Schuster, where the government successfully argued that consolidating from five major publishers to four would mean "fewer opportunities to publish interesting books and less money for writers."
The same logic applies here, according to Stoller. The Netflix-Warner combination would "crush the bargaining power of writers, directors, and actors" and essentially "hold a noose around the theatrical marketplace." He pointed out that Warner Bros has changed hands multiple times in recent years, and "every single time, the merger has been a failure. Nevertheless, they are still at it."
Bipartisan Political Backlash
Beyond the regulatory challenges under antitrust law, the deal is facing unexpected political headwinds from both parties. Republican Senator Mike Lee (R-Utah) called it the most concerning deal in over a decade. Jonathan Kanter, former President Joe Biden's antitrust chief, warned that regulatory review could "freeze" Warner Bros' operations for over a year.
That's a long time to have your business in limbo while lawyers argue over whether you're allowed to exist as a combined entity.
Neither Netflix nor Warner Bros Discovery has commented on the mounting criticism yet.
Paramount Cries Foul
If regulatory scrutiny wasn't enough, the merger is also drawing fire from competitors. Paramount Skydance (PSKY) is alleging that the entire auction process was biased and predetermined in Netflix's favor. That's a serious accusation, suggesting the whole bidding process was theater rather than genuine competition.
President Donald Trump, who reportedly has close ties to Paramount CEO David Ellison and his family, has signaled he won't be staying on the sidelines. "I'll be involved in that decision," Trump said, acknowledging that the combined companies would command a "very big market share" that "could be a problem."
When a sitting president says he'll personally involve himself in reviewing your merger, that's generally not a sign things are going smoothly.
Market Reaction
Netflix (NFLX) shares dropped 2.89% on Friday, closing at $100.24, though they recovered slightly with a 1.06% gain in overnight trading. The stock scores high on Growth and Quality metrics, though its price trend has been unfavorable across short, medium, and long-term timeframes.
The real question now is whether this deal can survive the gauntlet of regulatory review, political opposition, and competitor challenges ahead. Based on the volume of criticism it's already attracting before formal review has even begun, Netflix and Warner Bros Discovery may have a long, difficult road ahead.