Netflix moves to ease WBD acquisition fears in Hollywood

Netflix is moving fast to quell the uproar over its planned $82.7 billion acquisition of Warner Bros. Discovery, and says it has been telling its employees and industry counterparts that the acquisition is meant to expand, not shrink, Hollywood’s creative ecosystem. In a note to employees that was later made public, co-CEOs Greg Peters and Ted Sarandos promised to keep delivering Warner Bros. movies theatrically, saying there would be no studio closures or “overlap” cuts, allaying fears about consolidation and job losses.

Netflix moves to soothe industry jitters about WBD deal

The company presented the combination as an investment in one of the industry’s most storied libraries and production pipelines, from Warner Bros. Pictures to HBO and DC. “This is about building a classic Hollywood studio and supporting jobs,” the executives informed staff, placing the plan as an antidote to recent belt-tightening throughout the entertainment industry.

That message is aimed directly at a skeptical town. Advertisers have remained on edge as media mergers, including Disney’s acquisition of 21st Century Fox and the union of WarnerMedia and Discovery, were followed by widespread layoffs, write-downs, and cancellations. Influential labor groups and artists are bracing for similar turbulence, particularly with high-profile cuts to content and development reductions throughout the sector in recent years.

Antitrust heat and labor backlash over the proposed merger

The Writers Guild of America is calling on regulators to block the deal, saying it will give a single company too much power over production and distribution. The guild’s concerns reflect the emphasis of the Justice Department’s new merger guidance, which stresses competitive harm when a combined company might harm rivals or squeeze suppliers across creative and licensing markets.

Several lawmakers, including Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal, have raised the specter of higher consumer prices and reduced choice. They note that prices for streaming services have risen recently across the industry, including at Netflix, as evidence consolidation can alleviate competitive pressure. Their letter calls for a DOJ Antitrust Division inquiry, referring to the increasing concentration of industries and its effect on household budgets already sensitive to growing bills.

Market share debate centers on Nielsen’s The Gauge data

Netflix argues that even if combined, the audience would fall short of the one reached by digital behemoth YouTube, according to Nielsen’s The Gauge, which measures total TV usage. In recent months, YouTube has led all platforms in share of TV time—followed by Netflix and then Max (WBD’s service) a distance behind. It says even if you combined the viewing of Netflix and WBD (Warner Bros. Discovery), that would still lag behind YouTube’s lead, undermining the one-company-wins-everything argument.

Antitrust experts also point out that regulators will not analyze streaming in a vacuum. They will consider how the deal might impact negotiating leverage on different layers of the market: content licensing, production financing, theatrical windowing, and advertising. Under the agencies’ existing merger policy, structural considerations may be relevant when a firm approaches certain concentration thresholds in highly concentrated industries or when a transaction consolidates market power in an already concentrated market—even absent a #1 position.

Paramount bid adds wild card to shifting competitive dynamics

Further confusing things, Paramount filed a separate $108.4 billion offer for WBD, an offer CNBC reported that WBD’s board had rejected.

In this version of the Netflix argument, that competitive landscape was even narrower and more consolidated than in its own pleading: a Paramount–WBD merger could deliver a bigger combined share than Netflix’s with WBD. Whether that calculus of scale is correct, the bidding is a flashing sign of how feverishly legacy players and streamers are scrambling to arm themselves with libraries, sports rights, and global distribution to weather cord-cutting and ad-market vacillations.

Jobs, theatrical windows, and what’s next if the deal proceeds

And to allay fears of a creative stranglehold, the leaders of Netflix promised to maintain their theatrical commitments for Warner Bros. titles, a major worry for filmmakers and cinema owners following recent experiments around day-and-date and abbreviated windows. That commitment aims to reassure talent and guilds that feature films will not be a mere sidecar in streaming-only pipelines that potentially depress downstream revenues and awards visibility.

The thornier question is headcount. Even when they promise “no overlap,” most megamergers gamble on cost synergies, which have traditionally included redundancies in marketing, distribution, and back-office operations. Netflix argues that this deal is different, casting it as about growth in production and global reach rather than consolidation. Unions and policy advocates will push for legally binding protections in any consent decree if the deal goes through.

Regulatory outlook: how DOJ could assess the proposed deal

The Justice Department would probably analyze the impact of the deal in streaming, theatrical, and licensing. Field tests would feature how the combined company might bargain for talent, theaters, and device platforms; whether it would block rivals from must-have content; and whether consumers would encounter higher prices or fewer bundles. Previous cases—the conditions placed on Comcast–NBCUniversal over program access, and the pitched battle over AT&T–Time Warner—indicate if it were to approve such a merger, it would do so only with stringent behavioral, possibly structural remedies.

For now, Netflix’s message is clear: the company aims to shape its WBD bid as a scale play that will ensure creative diversity for years to come, help keep theaters propped up, and maintain streaming itself as competitive—all while looking out for worker guidelines. Whether that storyline persuades regulators, labor, and lawmakers will decide whether the super-consolidation of the industry gets a green light—or hits a brick wall.