\n\tOne veteran of the Washington regulatory trenches sees no major roadblocks ahead for Netflix\u2019s acquisition of Warner Bros.<\/p>\n
\n\t\u201cI think the deal gets done,\u201d said Andrew Lipman,\u00a0a regulatory policy expert and partner at Washington, D.C. law firm Morgan, Lewis & Bockius. Contrary to Paramount<\/a>\u2018s assertions in its hostile bid for WBD<\/a>, he added, \u201cI don\u2019t think it\u2019s that much more complicated or time-consuming than the Paramount deal.\u201d<\/p>\n \n\tLipman made the comments Monday at the UBS Global Media and Communications Conference in New York, on the same stage where Netflix Co-CEOs Greg Peters and Ted Sarandos appeared earlier in the day<\/a> to make their case for their acquisition. <\/p>\n \n\tParamount and Netflix have been jockeying over the past few days over the bejeweled portfolio of WBD. Netflix last Friday announced that its $82.7 billion proposal (including debt) to acquire WBD\u2019s studios-and-streaming division had been accepted by the WBD board<\/a>. Paramount, which has raised objections to what it calls unfair aspects of the process, responded Monday by launching a hostile takeover bid<\/a>, asking shareholders to consider its $108 billion offer for the entire company.<\/p>\n \n\tRegulatory review has been at the heart of each company\u2019s pursuit. Paramount insists Netflix\u2019s deal would never gain favor with regulators because it would allow the No. 1 global streamer to add another streaming service and unfairly extend its lead over rivals and add to its leverage over consumers. Lipman gave little credence to that argument.<\/p>\n \n\t\u201cThe market is more than just, in my mind, streaming,\u201d he said. \u201cIt\u2019s eyeballs. It\u2019s YouTube. I mean, Netflix has been losing eyeballs regularly to YouTube. It\u2019s TikTok. It\u2019s Facebook. And God knows who else is on the way. Moreover, the streaming market is dynamic. I mean, the average American these days, believe me or not, has between four and a half or five different streaming services. So, it\u2019s not like a typical market where, you know, you have one gender. And not only that, the ability to switch between streamers is fairly easy, and almost, by definition, cord cutters are the epitome of cost-conscious consumers.\u201d<\/p>\n \n\tPresident Trump\u2019s role in the fate of WBD is unclear. He has said he intends to be involved, which would be a sharp break from the precedent of presidents keeping distance from the regulatory process, but has also insisted that he is not particularly friendly with either company. Lipman said he is often capable of being flexible and transactional in order to get deals done.<\/p>\n \n\tGail Slater, who runs the antitrust<\/a> division in Trump\u2019s Department of Justice<\/a>, is a \u201cserious, tough antitrust enforcer,\u201d Lipman said. \u201cThis is not the Reagan years, you know, where everything goes. I mean, this is a very rigorous antitrust review.<\/p>\n \n\tSlater has assessed 10 to 12 deals this year, approving them after settlement agreements were reached, Lipman noted, and that indicates how the Netflix-WBD proposal could be approved. \u201cShe\u2019s open to settlements. And the president, who wrote the famous book, The Art of the Deal, is open to settlement.\u201d<\/p>\n \n\tLipman said he did not expect Trump to move to block the Netflix deal. He cited the president\u2019s decision last June to approve Nippon Steel\u2019s controversial takeover of U.S. Steel, a transaction opposed by the Biden Administration due to national security concerns. The reversal of the government\u2019s stance after an 18-month saga followed promises extracted from Nippon to spend $11 billion on U.S.-based projects.<\/p>\n \n\tIn the steel review, as in many other matters, \u201cTrump is looking for some equivalent of a \u2018golden share\u2019 as a consideration for how to make this deal happen,\u201d Lipman said. Given the $5.8 billion breakup fee included by Netflix in its proposed acquisition, the company and Trump officials \u201ccan be pretty creative in structuring that kind of consideration.\u201d<\/p>\n \n\tThe term \u201cgolden share\u201d has been used to describe the steel transaction, a prominent recent instance of the U.S. government gaining authority to oversee certain U.S. assets involved in global transactions. Lipman didn\u2019t elaborate on what such an arrangement might look like in the case of a massive media deal.<\/p>\n \n\tEven without knowing the shape of the ultimate deal, though, Lipman expects there to be \u201cbehavioral conditions\u201d imposed on the acquiring company. \u201cNetflix has already offered this up, even though it\u2019s not an antitrust issue,\u201d Lipman said. \u201cThere\u2019ll be concessions to movie theaters on scheduling and windowing and so forth. You know, there\u2019ll be agreements on, you know, non-discrimination, licensing, and sub-licensing programming. I\u2019m sure there\u2019ll be, as the Europeans would say, \u2018cultural issues,\u2019 which means non-American programming.\u201d<\/p>\n \n\tParamount could also end up getting a deal through, should WBD shareholders embrace it or a court order it to happen. In that instance, Comcast\u2019s 2011 deal for NBCUniversal is a relevant comparison, Lipman said, with the focus being on the stable of networks and fair dealings with advertisers, especially around sports, news and children\u2019s programming.<\/p>\n \n\tOn one intriguing note, Lipman said AI would be \u201cparamount\u201d in the regulatory process. \u201cThe pun\u2019s intended,\u201d he said. \u201cIt\u2019s gonna be huge. Because if you look at the Google and Meta antitrust cases, AI was huge there. You know, particularly if you\u2019re looking at a product market in mid-2029, I mean, who knows how dynamic AI is going to be?\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"One veteran of the Washington regulatory trenches sees no major roadblocks ahead for Netflix\u2019s acquisition of Warner Bros.…\n","protected":false},"author":3,"featured_media":434600,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[3227,9611,171,8396,198868,15329,67,132,68,66550],"class_list":{"0":"post-434599","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entertainment","8":"tag-antitrust","9":"tag-department-of-justice","10":"tag-entertainment","11":"tag-mergers-and-acquisitions","12":"tag-netflix-wb","13":"tag-paramount","14":"tag-united-states","15":"tag-unitedstates","16":"tag-us","17":"tag-wbd"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115687269744023755","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/434599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=434599"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/434599\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/434600"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=434599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=434599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=434599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}