Hollywood
US DOJ investigates Netflix-Warner deal over control of creators
Authorities check if merger could hurt actors, filmmakers, and studios
NEW YORK: The US Department of Justice has intensified its investigation into Netflix’s proposed acquisition of Warner Bros. Discovery. While the deal is valued at approximately $72 billion, federal regulators are looking beyond the price tag. They are specifically examining whether the merger would give Netflix an unfair level of control over filmmakers, actors, and independent production studios.
Government officials have issued subpoenas to various industry players to determine if Netflix uses its market position to dictate one-sided contract terms. The core concern is that a combined Netflix and Warner entity would create a monopsony, a market with only one major buyer. This could leave creators with little choice but to accept lower pay or surrender the rights to their work because there are fewer rival studios to bid for their projects.
This legal pressure has created an opening for competitors. Paramount and Skydance previously offered a higher bid for Warner Bros. but were rejected by the board in favour of Netflix. If the Department of Justice investigation causes significant delays or imposes strict conditions, the Warner board may be forced to reconsider other offers. The probe is currently focusing on how talent contracts differ between streaming platforms and traditional film studios.
Netflix has defended the acquisition by pointing out that it still accounts for less than 10 per cent of total television viewing in the United Kingdom and the United States. To address concerns about the future of cinema, the company has promised to give Warner’s major films a 45-day exclusive release in theatres. Despite these concessions, the government remains focused on whether the deal would ultimately reduce competition in the entertainment industry.
The outcome of this review will likely set a precedent for how big tech and media mergers are handled in the future. If regulators decide that Netflix’s influence over the creative process is too great, they could move to block the deal entirely. For now, the merger remains on hold as investigators interview rival executives and filmmakers to assess the true impact on the Hollywood ecosystem.
