Trump says market share from Netflix-Warner Bros. deal ‘could be a problem’
President Donald Trump confirmed Sunday that he recently met with Netflix co-CEO Ted Sarandos at the White House to discuss the Warner Bros. Discovery deal – and said the market share of a combined Netflix with WB and HBO Max “could be an issue.”
Speaking to reporters on the red carpet of the Kennedy Center Honors event in Washington DC, Trump said Netflix’s deal to acquire Warner Bros. studios and streaming operations will require a review, saying: “I will be involved in that decision.”
Trump said the government’s review of Netflix’s proposed $83 billion deal for Warner Bros., which was announced Friday, “has to go through a process, and we’ll see what happens.”
According to Trump, Sarandos visited the Oval Office last week. The Netflix executive is “a fantastic man,” the president said. “I have a lot of respect for him, but it’s a big market share.”
Trump also said of Sarandos: “He’s a great person… There’s a lot of interesting things going on besides what you’re talking about, but it’s a big market share. There’s no question about that. It could be a problem.”
The blockbuster pact would add HBO Max to Netflix’s already massive customer base of more than 300 million. At the end of the third quarter, Warner Bros. reported Discovery 128.0 million streaming subscribers, including both HBO Max and Discovery+ and its sports streaming services.
The Netflix deal for Warner Bros. is both a horizontal merger between rival streaming services and a vertical merger, creating a massive distribution pipeline for Warner Bros. content. It could also shrink the market for content producers.
The Justice Department and Federal Trade Commission are expected to review the Netflix-WB deal. The FCC is not expected to have a role in reviewing the transaction due to the nature of the assets involved; WBD does not own any TV channels or cable systems.
Sarandos expressed optimism on a call with Wall Street analysts on Friday that the deal will win regulatory approval. Netflix and WBD predict the deal will close within 12 to 18 months.
“[We are] I am really confident that we will get all the necessary approvals that we need,” Sarandos told analysts. “This deal is pro-consumer, pro-innovation, pro-worker, pro-creator, pro-growth.”
Executives routinely point out on Netflix’s earnings calls that even in the most mature markets, including the US, Netflix represents less than 10% of total TV viewing. Sarandos told the president during his meeting with Trump that Netflix, even in combination with Warner Bros. and HBO Max, would be about the same size as Google’s YouTube in the US – and still have less TV market share than other media conglomerates, according to a Bloomberg report report.
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