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On Tuesday, Netflix and Warner Bros. Discovery executives were under the spotlight on Capitol Hill as Senators expressed concerns over the proposed merger of the two entertainment powerhouses. The planned union, poised to form one of the world’s largest media conglomerates, drew scrutiny from lawmakers who questioned its implications for the streaming industry.
The Senate Judiciary Committee focused on the merger’s potential $70 billion valuation and its effect on streaming service affordability for consumers. Additionally, the lawmakers voiced apprehensions about Netflix’s expanding dominance within the media sector.
During the hearing, Netflix CEO Ted Sarandos and Warner Bros. Discovery’s Chief Revenue and Strategy Officer, Bruce Campbell, defended the merger. They dismissed accusations of political bias and emphasized the economic benefits the merger would bring to the film industry, pledging to safeguard the interests of both consumers and content creators.
“This isn’t your usual media consolidation. We’re acquiring unique assets that complement our portfolio. We aim to bolster theaters and enhance the American entertainment landscape,” Sarandos assured the committee. “Consumers today have a plethora of options, from broadcast and cable to streaming services and tech giants vying for television dominance.”
Sarandos pointed out that Netflix’s primary competitor is YouTube, which operates a subscription-based TV platform and dominates global streamed viewing on televisions.
The deal with Warner Bros. Discovery would be a major achievement for Netflix, giving it control of a new sprawling movie and television studio as well as the company’s extensive catalog of shows and films, including the popular Harry Potter and DC Comics brands.
Critics of the deal say it would harm competition in the entertainment production and film industry, giving Netflix too much control of the way millions of people in the U.S. and abroad see the world.
“Netflix is the dominant streaming platform in my household and around our nation,” said Sen. Cory Booker (D-NJ). “This transaction would consolidate one of the largest content producers with one of the largest distributors. I have major concerns about this for both our artists and art.”
Republicans on the committee, meanwhile, sought to cast Netflix as an overtly “woke” company, creating and promoting content catering to children that features controversial themes on gender and sex.
“Why does Netflix content for children promote a transgender ideology,” Sen. Josh Hawley (R-Mo) asked Sarandos. “An enormous amount of your children’s programming has this in it. Is this an advocacy position for Netflix?”
Sarandos shot back that Netflix “has no political agenda of any kind.”
“We feature a wide variety to meet a wide variety of tastes,” he said.
Lawmakers also raised concerns about President Trump’s potential involvement in the Department of Justice review of the deal.
Sarandos met with Trump at the White House two weeks before Netflix announced it had struck a deal to acquire Warner Brothers Discovery’s studios last November.
That meeting came amid a bidding war between Netflix and Paramount Global, the media company owned by Trump ally Larry Ellison, who has sought to torpedo the deal via a hostile bid, which, unlike the Netflix offer, would also include Warner Bros. Discovery’s cable television channels.
“I have met with the president a few times … we have talked about the state of the industry in general,” Sarandos said, mentioning the president’s primary concern is protecting American jobs in the entertainment business.
Trump, after the agreement was announced, said of Netflix “they have a very big market share and when they have Warner Bros., you know, that share goes up a lot so, I don’t know … I’ll be involved in that decision, too.”
Sarandos said Trump did indicate opposition to the deal in their meeting.
Some inside Hollywood are worried the Netflix-Warner Bros. Discovery merger could mean job cuts and less stability in an industry increasingly offshoring production overseas.
“Such an acquisition will further consolidate control over production and distribution of motion pictures in the hands of a single, dominant, global streaming platform in a market that is already highly concentrated,” Cinema United, one of the industry’s largest exhibition trade associations, said in a statement. “The impact will not only be felt by theatre owners, but by movie fans and surrounding businesses in communities of all sizes.”
Netflix has faced intensifying questions about its global ambition and explosive growth for years.
The company has more than 10,000 employees across North America and has invested heavily in streamed sports, stand-up comedy, prize fights and other live events in recent years.
It has doubled its subscription prices in the last 10 years, and currently holds more than 300 million paid customers around the world, a figure Sarandos downplayed as accounting for less than 10 percent of the global streaming market.
“We do not believe our merger presents any consolidation risk,” Sarandos said. “We’re in active conversations with DOJ and it’s still pretty early in that process.”
Sen. Amy Klobuchar (D-Minn.) asked Campbell how the sale would impact the editorial independence of CNN, a linear cable asset owned by Warner Bros. Discovery that is not part of the deal with Netflix.
Trump, who has been critical of the channel for years, has said as part of Warner Bros. Discovery’s spin-off he would like to see CNN operate under new ownership.
“CNN is one of our most popular cable channels,” Campbell insisted. “It will have its own leadership team and will continue to have its own independent editorial policy.”
But Republicans on the committee expressed concern that approval of the Netflix deal would lead to a more powerful megaphone for what they described as a profitable left-wing agenda.
“Netflix has long been a leftwing company. Your founder Reed Hastings is one of the biggest Democrat donors in the country,” Sen. Ted Cruz (R-Texas) said during Tuesday’s hearing.
“How should people feel confident the combined outlet would not be a propaganda outfit pushing one agenda with more power than you have now?”