Federal Communications Commission Chairman Brendan Carr signaled that Paramount’s revised bid to acquire Warner Bros. Discovery is likely to encounter fewer regulatory obstacles than a previous offer from Netflix, according to CNBC.
Speaking with CNBC’s Arjun Kharpal on the sidelines of Mobile World Congress in Barcelona, Spain, Carr described Paramount’s proposal as more straightforward from a competition standpoint. “There’s a lot of concerns when Netflix was the potential buyer there,” Carr said. “That particular combination raised a lot of competition concerns.”
Paramount Skydance last week increased its offer to purchase all of Warner Bros. Discovery to $31 per share, up from $30 per share. The WBD board determined that the revised bid was superior to Netflix’s earlier proposal. Netflix had sought to acquire WBD’s studio and streaming operations for $27.75 per share but later withdrew, stating the deal was “no longer financially attractive” after Paramount’s higher bid emerged, per a report to CNBC.
Carr indicated that Netflix would have faced significant regulatory challenges. “Netflix would have a very difficult path” toward approval, he told CNBC, adding that Paramount’s proposal “does not raise at all the same types of concerns.” He also pointed to potential upside for consumers, saying, “I think there’s some real consumer benefits that can emerge from it.”
Both transactions have drawn scrutiny over their potential impact on competition in the U.S. film industry. Observers have raised concerns about possible job reductions and fewer theatrical releases. The Netflix proposal also triggered debate about streaming market concentration, as it would have combined Netflix with WBD’s HBO Max, two of the most widely used streaming platforms.
Paramount executives said Monday that the combined company would aim to release at least 30 films per year, split evenly between its studios. They also confirmed plans to merge Paramount+ with HBO Max into a single streaming platform once the transaction is finalized, according to CNBC.
Read more: California Emerges as Key Obstacle in Paramount–Warner Bros. Merger
Regulatory review remains a key factor. The FCC typically evaluates transactions involving broadcast assets, including Paramount’s CBS network. The agency previously approved Paramount’s merger with Skydance last year. Carr suggested the commission’s involvement in the current deal could be limited. “If there’s any FCC role at all, it’ll be a pretty minimal role. And I think this is a good deal, and I think it should get through pretty quickly,” he said in his remarks to CNBC.
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Unlike Netflix’s earlier proposal, which focused primarily on WBD’s studio and streaming businesses, Paramount’s bid includes the company’s cable television properties such as CNN, TBS and TNT. Paramount has also offered a $7 billion breakup fee should regulators block the agreement. Additionally, it has already covered the $2.8 billion termination fee owed to Netflix after that deal was scrapped.
Concerns over antitrust implications persist. Critics of the abandoned Netflix deal cited risks of higher prices and reduced competition. In December, President Donald Trump suggested the Netflix-WBD combination “could be a problem” because of the increased market share it would create, though he later clarified that the Department of Justice would handle the review process, according to CNBC.
Democratic Sen. Elizabeth Warren of Massachusetts described the proposed Paramount-WBD merger as “an antitrust disaster threatening higher prices and fewer choices for American families,” per CNBC.
Analysts at Raymond James recently characterized the Paramount-WBD transaction as “meaningfully easier” to complete compared with the Netflix deal. In a note cited by CNBC, the analysts acknowledged potential regulatory questions surrounding news and international cable assets but concluded that the Paramount structure appears “more palatable all-in.” They also noted that Paramount Skydance’s political relationships may be stronger under the current U.S. administration than Netflix’s.
Still, not all observers see a clear path forward. Paren Knadjian, a partner at advisory firm EisnerAmper, told CNBC that the deal is far from assured. He described the Paramount proposal as a “horizontal consolidation” spanning cable television, sports, streaming and news. “I think the biggest thing we’re going to focus on is the concentration of intellectual property under one roof,” Knadjian said. “What power does that give this new entity in terms of the ability to charge more?”
Knadjian added that “the regulatory pressure, the political pressure, those are the things that will certainly delay the deal and will make it more complicated, and I think there’s going to have to be significant concessions for it to go through,” according to CNBC.
Another open question is whether the Committee on Foreign Investment in the United States will examine the transaction’s financing structure. Paramount’s offer reportedly includes roughly $24 billion from Gulf state sovereign wealth funds, an element that could invite additional review, per CNBC.
Source: CNBC
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