Sarandos pushes back on antitrust fears as Senate grills Netflix over WBD deal
Ted Sarandos has told a US Senate committee that Netflix’s proposed acquisition of Warner Bros Discovery (WBD)’s studio and streaming assets would “strengthen” the US entertainment business and that the combined entity would not constitute a monopoly.
Appearing before the Senate Judiciary Subcommittee on Antitrust in Washington DC on Tuesday, Netflix’s co-CEO claimed the US$82.7bn deal will not harm consumers by driving up the cost of streaming subscriptions or reduce opportunities for content suppliers to sell shows.
“We plan to operate those businesses largely as they are today,” said Sarandos, who believes Netflix and WBD’s SVoD HBO Max are “very complimentary,” as 80% of HBO Max members also subscribe to Netflix in the US. This would enable both services to be bundled and offered at a discount, he said.
“We will give consumers more content for less,” he said. “So this is not a typical media merge, where you end up with what’s called the Noah’s Ark problem, two of everything. We are buying a company that has assets that we do not, and we will keep investing in Warner Bros.”
In the US and Canada, Netflix has around 86 million subscribers, while HBO Max has about 50 million. In terms of paid subscriptions, a combination of the companies would create a runaway leader in the US video streaming market.
However, Netflix has argued that its share of TV viewing time is just 9% in the US, far behind YouTube’s. A combination with HBO and HBO Max would increase that total to around 10%, claimed Sarandos.
While Netflix competes for viewership with the likes of CBS, Disney+, Peacock and Tubi, it is also battling “deep-pocketed tech companies who are trying to run away with the television business,” he said, citing YouTube’s deal for NFL Sunday Ticket, as well as its rights agreement for the Oscars starting in 2029 and its recent pact with UK public broadcaster the BBC.
“Some of their creators have bigger budgets than typical Hollywood television shows. YouTube is not just cat videos anymore. YouTube is TV,” Sarandos added.
During a session lasting over two hours, Sarandos was quizzed by both Democratic and Republican senators about various ways in which the deal could be anticompetitive.
Senators also had questions related to American production, and whether or not the combination could accelerate the decline of filming in the US. To that, Sarandos claimed that more than half Netflix’s production spend already occurs in the US and that a combined Netflix/WBD would look to increase that volume yet further.
“It’s part of our business plan,” said Sarandos when asked if Netflix would commit to increasing the amount of US production.
The streaming giant recently completed a deal to acquire Fort Monmouth, a former army base in New Jersey, as part of a planned US$1bn investment in the state.
Sarandos used the deal as evidence that Netflix is investing in homegrown production, while mentioning that Disney had recently decided to move its Avengers movies to the UK. Netflix, meanwhile, was set to send seven of its series to the UK but opted to move them to New Jersey after the state improved its tax credit programme.
“We are leading production in the US and intend to keep growing it,” said Sarandos, reiterating that Netflix plans to increase its content spend by around 10% to US$20bn in 2026.
Within the industry, the proposed deal has been met with concern about job losses and further consolidation in Hollywood. Among those speaking out was the Writers Guild of America, which said: “The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent.”
While Netflix now appears to be the clear frontrunner to win WBD, provided the deal is approved, Paramount Skydance has not given up its pursuit. The company is continuing to push ahead with its hostile takeover bid.
During Tuesday’s hearing, Senator Cory Booker said Paramount chairman and CEO David Ellison had been invited to participate but had declined. Ellison did, however, meet with senators privately, said Booker.
