An expert in Washington’s regulatory landscape believes there are no significant obstacles for Netflix in acquiring Warner Bros.
Andrew Lipman, a regulatory policy specialist and partner at the Morgan, Lewis & Bockius law firm in D.C., expressed confidence saying, “I believe the deal will proceed.” He pointed out that contrary to Paramount’s claims during its hostile takeover bid for WBD, he doesn’t believe the Netflix acquisition will be more complex or take longer than the Paramount deal.
Lipman made these remarks during the UBS Global Media and Communications Conference in New York, where Netflix Co-CEOs Greg Peters and Ted Sarandos also presented their case for the acquisition.
Recently, Netflix put forth an $82.7 billion proposal (debt included) to acquire WBD’s studios and streaming division, which was accepted by WBD’s board. In response, Paramount initiated a hostile takeover bid on Monday, proposing $108 billion for the entire company and criticizing the acquisition process as unfair.
The regulatory review is crucial for both companies. Paramount argues that Netflix’s acquisition would unfairly strengthen its market dominance over other streaming services and disadvantage consumers. Lipman dismissed these concerns, noting that the streaming landscape encompasses various competitors like YouTube and TikTok, with consumers easily switching between services.
The role of President Trump in the regulatory review remains uncertain. While he plans to be involved, he claims not to be particularly favorable towards either company. Lipman noted Trump’s adaptability when it comes to deal negotiations, stating that Gail Slater, head of the antitrust division in the Justice Department, has been a rigorous enforcer but is open to settlements which could favor the Netflix-WBD proposal.
While the specifics of any resulting deal remain unclear, Lipman anticipates “behavioral conditions” will be placed on the acquirer. Netflix has already hinted at possible concessions related to theaters, licensing, and programming. Moreover, if Paramount’s bid gains traction with WBD’s shareholders or through a court ruling, it could also pave the way for a deal reminiscent of Comcast’s acquisition of NBCUniversal, focusing on fair dealings in advertising and programming.
Lastly, Lipman emphasized the significant role of artificial intelligence in the regulatory landscape, hinting that it could play a pivotal role in upcoming antitrust cases, especially as the market continues to evolve rapidly through technological advancements.
