When Merger Reviews Get Political
Senator Elizabeth Warren (D-Mass.) sounded the alarm Wednesday about what she sees as a potential disaster in the making: the Justice Department's review of competing bids for Warner Bros. Discovery (WBD) could become less about antitrust law and more about political connections.
At the center of this drama are two massive bids. Netflix Inc. (NFLX) has a signed $82.7 billion merger agreement with Warner Bros. Discovery. Meanwhile, Paramount Skydance (PSKY) launched a hostile $108 billion takeover attempt, backed by some interesting financial players including Middle Eastern sovereign wealth funds.
Warren's concern? That Attorney General Pam Bondi's Justice Department might let politics override the law when deciding which deal, if any, should proceed.
The Case Against Both Deals
Warren didn't mince words in a video posted on X: "We have laws on the books that should block either one of these bids." She argued that mergers involving Warner Bros. are "pretty much the reason that antitrust laws exist."
Her point is straightforward. The U.S. has opposed monopolies since the 1800s, and those principles shouldn't change based on who's in the White House or which companies are involved. "If you're talking about the aluminum business in the 1950s or you're talking about the movie business in the year 2025, the same laws still apply," Warren said, warning that consolidation would ultimately hurt consumers and workers.
Trump's Unusual Involvement
What really set Warren off was Donald Trump saying he would be "involved" in the merger review. "That's not normal," she said bluntly. "This is a law enforcement matter that should be evaluated based on the facts and the law and nothing more."
She's concerned that what should be a straightforward legal analysis could devolve into what she called an "influence-peddling" exercise, where political connections matter more than antitrust principles.
Foreign Money and Political Ties
Warren also zeroed in on the political connections surrounding Paramount Skydance's hostile bid. The deal has drawn backing from Trump allies and Middle Eastern sovereign wealth funds, raising questions about foreign influence over major U.S. media outlets like CNN and Hollywood studios.
Initially, Affinity Partners was supporting the Paramount-backed bid. However, Kushner's private equity firm has reportedly exited the deal, removing one layer of political complication from an already messy situation.
Warner Bros. Takes a Side
While Warren worries about both deals, Warner Bros. Discovery has made its preference clear. Earlier this month, Paramount Skydance made its $108 billion hostile takeover offer, trying to block the Netflix merger.
On Wednesday, Warner Bros. Discovery urged shareholders to reject Paramount's offer, calling it inferior and saying it doesn't qualify as a "Superior Proposal" under the company's signed merger agreement with Netflix. The company is betting that shareholders will stick with the original Netflix deal rather than embrace Paramount's unsolicited approach.
The question now is whether the Justice Department will review these competing bids based purely on antitrust law, or whether political considerations will creep into the analysis. Warren is clearly betting on the latter, and she's not happy about it.