Netflix responds to concerns about WBD deal

Netflix’s recent announcement that it plans to acquire Warner Bros. Discovery (WBD) for $82.7 billion has sent shockwaves through Hollywood, prompting widespread concerns over job security, the future of theatrical releases, and the representation of diverse voices in film and television.

In response to industry backlash, Netflix co-CEOs Greg Peters and Ted Sarandos addressed employees in a letter made public by Bloomberg on Monday.

The executives reassured staff that the company remains committed to maintaining theatrical releases for WBD films. They also emphasised that the merger would involve “no overlap or studio closures.”

According to Peters and Sarandos, the acquisition is designed to drive growth rather than consolidation. They stated that the deal focuses on “strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”

Despite these assurances, the Writers Guild of America (WGA) has emerged as a strong critic of the transaction, arguing that it violates antitrust laws designed to prevent monopolistic behaviour.

The proposed acquisition has also drawn scrutiny from lawmakers. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal submitted a letter to the Justice Department’s Antitrust Division outlining their concerns about the impact of such a large-scale merger on the entertainment industry.

The senators warned that the merged entity would wield “more market power than the current companies to raise consumers’ television costs,” at a time when families are already facing inflationary pressure. Their concerns were underscored by Netflix's price increases last January.

To counter concerns about monopolies, Peters and Sarandos cited Nielsen data showing that even a combined Netflix-WBD audience share would be smaller than YouTube’s current reach and smaller than what a potential Paramount-WBD merger would deliver.

Their comments come shortly after Paramount made its own bid — a $108.4 billion offer — to acquire WBD. However, CNBC reported that WBD’s board rejected the proposal's terms. The competing bids indicate that the race for dominance in the media landscape is far from settled.