Netflix is gearing up for a pro-Trump initiative in light of recent harsh anti-Trump remarks from one of its board members. The company is also under increased scrutiny from antitrust regulators in Washington regarding its proposed acquisition of Warner Bros. Discovery’s streaming and studio divisions, according to sources.
This development comes as Paramount Skydance submitted its final offer for WBD on Sunday, previously hinting it could bid up to $32 per share.
Internally, Netflix is contemplating arranging a meeting between CEO Ted Sarandos and President Trump, although this has not been confirmed. Over the weekend, Trump criticized Netflix on social media after board member Susan Rice, a prominent Democrat, indicated that companies that accommodate the Trump administration might face consequences when Democrats regain power.
In response to Rice’s comments, Trump threatened to disrupt the Netflix-WBD deal unless she was dismissed from her position.
A spokesperson for Netflix refrained from commenting on Rice but didn’t deny that a meeting was in the works.
This strategy comes amid a critical phase for Netflix, especially as it works on its growth plans, including the $73 billion acquisition of WBD. The merger faces skepticism from the Justice Department’s antitrust division, which may challenge it in court, questioning whether layering Netflix’s services over HBO Max, WBD’s streaming platform, would be appropriate.
Compounding their troubles, Netflix has pushed back against an earlier Justice Department investigation that suggested it could be classified as a monopoly under antitrust law. A senior regulatory official commented that Sarandos and Netflix may have downplayed the gravity of the Justice Department’s concerns.
Meanwhile, Paramount is trying to disrupt the Netflix-WBD deal with a hostile bid before a key deadline of 11:59 pm on Monday.
The specifics of Paramount’s final bid were not disclosed at the time of publication. The company, often referred to as PSKY, seems focused on ensuring that Warner Bros. is genuinely considering their offer rather than merely negotiating with Netflix, given CEO David Zaslav’s close ties with Sarandos.
Officials expect that WBD could make an announcement regarding PSKY’s status before the market opens on Tuesday.
Paramount, led by producer David Ellison and his father Larry Ellison, a Trump supporter, is conducting late-night meetings with the WBD board. Reports suggest they might increase a bid of $30 a share, approximating $78 billion, by an additional $3, depending on internal dynamics at WBD.
Under the current deal terms, Netflix may raise its offer to $73 billion, or $27.75 per share, with shareholders set to vote in March.
Both proposals are under regulatory scrutiny, but Netflix’s has drawn the most attention. Recently, the company has engaged several lobbyists aligned with Trump to argue against antitrust violations amid fierce competition in streaming entertainment.
Interestingly, concerns from the administration about antitrust issues have grown, shifting the investigation to examine Netflix’s pricing strategies within the streaming landscape.
Sarandos and Trump have interacted previously, seemingly finding common ground regarding WBD last November. However, Sarandos now faces the fallout from Rice’s recent remarks during a podcast hosted by Preet Bharara, a well-known Democrat and critic of Trump.
Rice had mentioned last week that companies could not expect to bypass rules once Democrats reclaim power, which made her comments particularly ill-timed given the ongoing deal negotiations.
Trump reacted furiously to her threat, posting on his Truth social account that Netflix ought to fire Rice, labeling her a “racist and deranged” figure, or face repercussions.
In his post, he expressed disbelief at Rice’s role and questioned her qualifications.
On Sunday, Sarandos attempted to clarify the situation, stating, “This is a business deal. It’s not a political deal.” He emphasized that the transaction is under the U.S. Department of Justice’s purview.
Perhaps he should mention that to Trump during their next encounter, given the president’s insistence on being involved in the Warner Bros. Discovery sale.
