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Logo text A coalition of state attorneys general led by Republicans are urging the government to comprehensively dissect Netflixs bid for Warner Bros. Discovery. They say that greenlighting the deal could create a monopoly in violation of antitrust laws.
The proposed merger between Netflix and Warner Brothers will likely result in undue market concentration that stifles competition and therefore creates higher prices, lower reliability, and less innovation for one of America’s major industries — all to the detriment of American consumers, the letter reads. blogherads.adq.push(function () { blogherads .defineSlot( 'medrec', 'gpt-article-mid-article-uid0' ) .setTargeting( 'pos', ["mid-article1","mid-articleX","mid","mid-article"] ) .setTargeting( 'viewable', 'yes' ) .setSubAdUnitPath("ros\/mid-article") .addSize([[300,250],[2,2],[300,251],[620,350],[2,4],[4,2],[320,480],[620,366]]) .setClsOptimization("minsize") ; }); Related Stories Business How High Will Netflix Go in the Hunt for Warner Bros? TV Taylor Tomlinson Is Back Where She Started
The missive, sent on Tuesday, marks the latest blow for Netflix as it navigates regulatory hurdles and a bidding war with Paramount. Among Paramounts main arguments in courting Warner Bros. is that it offers a shorter and more certain path to completing the deal. The David Ellison-led company is confident it can get the transaction passed the government. In its latest revised bid, it said it would pay a $7 billion breakup fee in the event the merger doesnt secure approval from the government, in addition to raising its offer to $31 per share.
The letter raises concerns that Netflix will face less competition and may start declining to license content to rivals if its allowed to acquire Warner Bros, which could lead to higher subscription prices for less content.
The states also echo concerns from James Cameron that the merger will have a disastrous impact on movie theaters. They cite Cinema United, a trade group that includes the largest theater chains, calling the proposed merger culturally catastrophic. blogherads.adq.push(function () { blogherads .defineSlot( 'medrec', 'gpt-dsk-tab-mid-article2-uid1' ) .setTargeting( 'pos', ["mid","mid-article2","mid-articleX"] ) .setTargeting( 'viewable', 'yes' ) .setSubAdUnitPath("ros\/mid-article2") .addSize([[300,250],[300,251],[620,350],[2,4],[4,2],[320,480],[620,366]]) .setClsOptimization("minsize") ; });
Camerons endorsement of Paramount in the battle for Warner Bros. was an unexpected setback for Netflix. In a letter to Sen. Mike Lee (R-Utah), he stressed that Netflix will likely change course on its pledge to keep movies in theaters for 45 days since theatrical releases fundamentally clash with its business model. Those remarks were challenged by CEO Ted Sarandos, who said hes surprised and disappointed the director chose to be part of the Paramount disinformation campaign.
The state prosecutors said the Justice Department should review the merger under the Clayton Act, an antitrust law that bars mergers that may substantially lessen competition or create a monopoly. The government could opt to take another path if it files a lawsuit by alleging a violation of the Sherman Act, which bars deals intended to maintain monopoly power.
State attorneys general from Montana and Nebraska led the effort, which was joined by Alabama, Alaska, Iowa, Kansas, North Dakota, South Carolina, Tennessee, Utah, West Virginia. Theyre among the first take a position on the merger after Californias top prosecutor said the state is investigating.
