Netflix’s proposed $72 billion Warner Bros. Discovery acquisition faces deep skepticism

12 December 2025

Photo Credit: REUTERS

Netflix’s ambitious bid to acquire Warner Bros. Discovery for approximately $72 billion is drawing intense scrutiny from antitrust experts and regulators in the United States and around the world as the streaming giant pushes forward with one of the largest media mergers in history. The deal, which would bring HBO, HBO Max, Warner Bros. film and television studios, and a vast library of iconic content under Netflix’s control, is being touted by the company as a necessary step to compete more effectively with YouTube, the Alphabet-owned platform that dominates online video viewership. But many legal specialists say that argument may fall flat with authorities who will review the transaction’s competitive implications.

Netflix’s acquisition plan, which followed a winning bid for Warner Bros. Discovery’s TV, film and streaming assets, envisions combining the subscriber bases of Netflix and HBO Max to create a combined audience of roughly 428 million globally. In a letter to employees, co-chief executives Greg Peters and Ted Sarandos argued that even after the merger Netflix would still trail YouTube in U.S. view share, illustrating why they believe the move is essential to strengthening the company’s market position. They pointed to Nielsen data showing YouTube’s viewership dominance and insisted that the combined entity would still not command an outsized share of the market, underscoring their belief that regulatory approval should be attainable.

Nevertheless, several antitrust lawyers and economists are unconvinced by Netflix’s rationale. Critics note that the fundamental nature of the two platforms differs significantly, with Netflix rooted in paid, scripted content and YouTube driven by free, user-generated video that spans countless genres and lengths. Under antitrust law, authorities rarely equate distinct business models when they define competitive markets, and skeptics argue that Netflix’s claim that it competes with YouTube only because consumers have a finite amount of time to watch content each day is unlikely to resonate with regulators. Such arguments may be perceived as overly broad and unpersuasive, especially given historical antitrust cases that emphasize tightly defined markets rather than sweeping assertions of rivalry.

The skepticism comes against the backdrop of a highly competitive and rapidly evolving media landscape. Paramount Skydance, led by CEO David Ellison, launched a hostile counterbid for Warner Bros. Discovery valued at $108.4 billion, creating a dramatic twist in the takeover saga and underscoring that other industry players see strategic value in controlling the storied studio’s assets and franchises. Paramount’s bid has complicated Netflix’s path, adding pressure not only in terms of winning shareholder support but also in anticipating how regulators might view concentration of media power under different ownership structures.

Regulatory concerns are not confined to the YouTube argument alone. Consumer advocacy groups and even competitors have raised broader antitrust concerns, suggesting the merger could reduce competition in streaming and entertainment markets by combining two major content producers and distributors. A consumer class action was filed in U.S. federal court in California seeking to block the deal on grounds that it would reduce choice for subscribers by absorbing HBO Max into Netflix, eliminating a standalone competitor. The lawsuit highlights worries that, beyond competing with YouTube, the deal could shrink the vibrant field of subscription video-on-demand services that consumers have come to rely on.

Disney CEO Bob Iger has also publicly cautioned about the potential consumer impacts of the merger, warning that consolidation could lead to higher prices or a shift away from competitive offerings. Drawing on lessons from Disney’s own high-profile media acquisitions in recent years, Iger emphasized the importance of careful regulatory examination to ensure that such large transactions do not disadvantage the very audiences they purport to serve. His comments reflect broader industry anxiety about the concentration of content ownership and the interplay between streaming, theatrical releases, and conventional media distribution models.

Netflix’s argument that the deal will not lead to studio closures or significant job losses is part of its attempt to position the merger as not only acceptable but beneficial for both creators and consumers. In messaging to employees and the public, Netflix has emphasised that it will maintain theatrical releases and legacy studio operations, countering assumptions that digital platforms might sideline traditional cinematic distribution. The company has sought to reassure internal and external stakeholders that this is not a consolidation that will erode Hollywood infrastructure but rather one that can strengthen and preserve it.

Despite Netflix’s confidence, regulators in the United States and in other key jurisdictions are poised to closely examine whether the merger would distort competitive dynamics or harm consumer choice. Under new merger review rules, companies must provide detailed internal analyses early in the process, and if those documents fail to substantiate Netflix’s claims about competition with YouTube and other rivals, the company could face serious challenges in securing necessary approvals. Antitrust experts note that the Department of Justice is particularly likely to focus on specific content markets and subscription services rather than broad digital entertainment categories that encompass platforms with divergent business models.

As the deliberations unfold, Netflix and Warner Bros. Discovery shareholders, employees and the wider entertainment ecosystem will be watching closely. The outcome will have implications far beyond a single transaction, shaping how major media and technology companies approach mergers and acquisitions in an era when streaming, user-generated content and franchise-driven studios intersect in complex ways. For now, the core of the skepticism lies in a fundamental question of whether Netflix’s bid truly addresses the competitive challenges it faces, or if it is leaning on a narrative that regulators and courts may ultimately find unconvincing.