The $72 billion streaming megadeal that would reshape Hollywood just hit its first major roadblock. Trump administration officials are expressing 'heavy skepticism' toward Netflix's acquisition of Warner Bros. Discovery's film and streaming assets, with the President himself promising personal involvement in the regulatory review. The market's already jittery about the transaction's size, sending Netflix shares down nearly 3% while Warner Bros. Discovery surged over 6%.
Netflix just dropped the biggest bombshell in streaming history, and the Trump administration is already reaching for the remote control. The streaming giant's $72 billion acquisition of Warner Bros. Discovery's film studio and HBO Max assets - announced Friday - immediately triggered what sources describe as 'heavy skepticism' from senior Trump officials. The President himself told Reuters Monday he'll personally weigh in on the decision, turning what's already Hollywood's largest-ever merger into a high-stakes political drama. Market reaction split exactly as you'd expect - Netflix shares tumbled 2.89% as investors questioned whether the company can digest such a massive acquisition, while Warner Bros. Discovery soared 6.3% on the windfall prospects. 'Look, the math is going to hurt Netflix for a while. There's no doubt,' Rich Greenfield, co-founder of LightShed Partners, told CNBC. 'This is expensive.' But expensive deals often create the biggest market disruptions, and this one would fundamentally reshape how Americans consume entertainment. The combined entity would control Netflix's 247 million global subscribers alongside Warner's HBO Max platform, plus the entire Warner Bros. film catalog including DC Comics properties, Harry Potter, and prestige HBO series. That's enough content firepower to challenge Disney and Apple simultaneously. The Trump administration's immediate pushback signals they're viewing this through an antitrust lens rather than celebrating American media dominance. A senior official told CNBC's Eamon Javers Friday that they're approaching the deal with 'heavy scepticism' - Washington speak for 'prepare for a fight.' This puts Netflix in an unusual position, having to lobby an administration that's historically been skeptical of Big Tech consolidation. The streaming wars have intensified dramatically since 2020, with Apple TV+, Amazon Prime Video, and Disney+ all pouring billions into content. Netflix's subscriber growth has plateaued in key markets, making Warner's content library and HBO's premium programming increasingly attractive. But the regulatory landscape has shifted. The Biden administration already challenged several major media mergers, and Trump's team appears ready to continue that scrutiny. The deal's structure - an all-equity transaction valued at $72 billion - means Netflix would absorb Warner Bros. Discovery entirely, creating a content behemoth that would dwarf traditional studios. Industry insiders suggest the companies knew regulatory approval would be challenging, which explains why they announced the deal on a Friday - classic Washington timing for controversial news. The combination would give Netflix unprecedented leverage in content licensing negotiations and could fundamentally alter how streaming services compete for exclusive programming. What makes this particularly complex is Trump's unpredictable approach to deal approvals. His administration has both blocked major mergers and surprised markets by approving transactions others expected to fail. 'Stranger things have happened in this administration,' as CNBC's analysis noted, referencing Netflix's own hit series while acknowledging the political uncertainty. The streaming giant's next move will likely involve intensive lobbying efforts, emphasizing job creation and American media competitiveness against international rivals. They'll argue this merger strengthens U.S. entertainment exports globally, particularly against Chinese streaming platforms and European content producers. For Warner Bros. Discovery, the deal represents a lifeline after years of struggling with massive debt loads and declining traditional TV revenues. The company's been shopping various assets, and Netflix's offer provides the cleanest exit strategy for shareholders who've watched the stock underperform since the 2022 merger of WarnerMedia and Discovery. But the Trump administration's resistance could derail everything, leaving both companies to navigate an increasingly fragmented streaming landscape without the scale advantages this merger would provide.
