Sarandos Heads to Washington

Netflix CEO Ted Sarandos is set to visit Washington, D.C., on Thursday as part of a final effort to secure Warner Bros. Discovery’s acquisition of the streaming service and studio, according to On the Money.

As reported initially by the Post, Sarandos, alongside a growing number of lobbyists, has initiated a government outreach campaign that might include a meeting with President Trump. The aim is to tackle rising antitrust worries and some poorly-timed comments made by a board member, who has been critical of Trump.

Sarandos’ visit to the White House is confirmed, although it remains uncertain if he will have the opportunity to meet with the president. Notably, he had a meeting with Trump back in November.

His main challenge will be to address the increasing concerns about antitrust issues related to Netflix’s plans to integrate WBD’s streaming service with its own, effectively combining the No. 1 and No. 3 streaming platforms.

On another front, Republican lawmakers are skeptical of Netflix, viewing its content as leaning left, and are hesitant to let the company expand its market influence. The situation is complicated further by board member Susan Rice, a Democratic figure who has openly criticized Trump on a podcast. In her remarks, she warned that any corporations accommodating Trump could expect repercussions from Democrats if they come to power again.

In reaction to Rice’s comments, Trump reportedly urged Sarandos to either dismiss her or “face the consequences.”

A Netflix representative did not provide comments concerning Rice’s remarks or Sarandos’ trip to D.C. A White House spokesperson also didn’t respond immediately. However, following news of Sarandos’ visit, a senior official with the Trump administration remarked humorously that perhaps Sarandos would bring Rice along.

Meanwhile, Netflix shareholders have pressured Sarandos to reconsider his acquisition plans, citing the substantial costs and debt necessary to take on the $73 billion price tag associated with HBO Max and Warner Studios. On Wednesday, shares climbed nearly 6%, fueled by speculation that Sarandos might withdraw from the deal.

In a related note, Warner Bros. Discovery indicated on Tuesday that they are contemplating canceling their proposed $27.75 per share deal with Netflix. They’re even considering an attractive offer from competitor Paramount Skydance.

This rival company is now proposing to acquire WBD and its cable assets, including CNN, at an increased price of $31 per share, amounting to over $80 billion. Should the WBD board find Netflix’s offer less appealing, it could still have a chance in the bidding process.

Led by David Ellison, with significant involvement from billionaire Larry Ellison and Redbird Capital partners, PSKY’s proposal is deemed more favorable due to less overlap with existing services, potentially easing regulatory approval. Recently, they have attracted several prominent WBD shareholders, including notable investor Mario Gabelli.

WBD investors will make the final decision during a shareholder vote set for March 20th.

The competitive landscape for WBD’s future has captured the attention of Wall Street, as well as the media sector, given the valuable assets involved—ranging from legendary Warner Studios to HBO Max and CNN, all coupled with influential figures like Sarandos, David Zaslav of WBD, and Larry Ellison himself.

PSKY’s bid, a direct appeal to shareholders, follows WBD’s board approval of Netflix’s proposition last December, a decision driven by financing concerns regarding PSKY. Initially, WBD and Netflix aligned in assuring investors that potential antitrust obstacles posed by Trump’s authorities would be manageable.

However, as reported previously, that narrative is now facing skepticism within the Trump Justice Department’s antitrust division, which is reportedly examining Netflix’s business model for potential monopoly violations.

If the deal encounters opposition from the White House, which seems likely, Netflix could find itself in a protracted legal battle to obtain control over the streamer and studio—a process anticipated to stretch over two years, during which investors would see no returns. Additionally, scrutiny from state attorneys general and EU regulators would complicate matters further.

Even supporters of WBD appear to be growing doubtful about Netflix’s prospects as scrutiny of the deal intensifies. A senior WBD official remarked, “They have some work to do in Washington, D.C.”