Netflix-Warner Bros deal: CEO faces questioning by US Senate panel

US senators questioned Netflix co-CEO Ted Sarandos at a hearing on Tuesday about how his company’s proposed $82.7 billion acquisition of Warner Bros. Discovery would affect competition in the entertainment industry. US Senator Mike Lee led the hearing at which Sarandos and Warner Bros. Chief Strategy Officer Bruce Campbell testified. While the Senate cannot block the deal itself, lawmakers have sought information on how the transaction will affect consumers, workers and competitors.

Lee, a Republican from Utah who leads the antitrust subcommittee, said the deal could reduce competition among streaming platforms and lead to fewer jobs for writers, actors and other entertainment workers. It could also put Netflix in a position to lure movies away from theaters and reduce rivals’ access to Warner Bros.’ blockbuster content, he said.

“Netflix wants to be the one platform to rule them all,” Lee said.

The U.S. Justice Department is reviewing the transaction along with a competing, hostile bid from Paramount Skydance.

Netflix and Paramount Skydance prefer Warner Bros. for its leading film and television studios, extensive content library and franchises such as “Game of Thrones,” “Harry Potter” and DC Comics superheroes Batman and Superman. Paramount has argued that it will have an easier regulatory path to approval. But Warner Bros. has repeatedly rejected Paramount’s offers, which would have left it deeply in debt to finance the transaction. Paramount’s CEO is David Ellison, whose father, billionaire Oracle co-founder Larry Ellison, has enjoyed close ties to US President Donald Trump.

Lawmakers from both major US political parties have expressed concerns that the deal will reduce competition in the streaming market.

Cory Booker, the ranking Democrat on the panel, pressed Sarandos about Trump’s role in reviewing the deal. Shortly after the deal was announced, Trump said he would join it.

“I don’t know if he’s involved or not,” Sarandos said. Netflix has pointed to data from media analysis firm Nielsen that says Google’s YouTube accounts for more viewing time on American television than other streaming services, but experts say the DOJ is likely to analyze how the deal affects competition in a more niche market, such as streaming platforms that charge monthly subscriptions.

Lee questioned Sarandos on the difference between professionally produced movies and shows on Netflix and ad-supported content featured on YouTube.

Read this also What Netflix’s Warner Bros. Discovery deal means for viewers

Sarandos said at the hearing that there are no public details available of what people watch on YouTube, but that capturing American television viewing is a “zero-sum game.”

“If you’re watching YouTube, HBO Max, you’re not watching Netflix, you’re not watching CBS,” he said.