The merger of HBO Max and Netflix will create a monopoly. Final talks with Warner Bros. getting closer

Warner Bros. Discovery has decided to enter into exclusive negotiations with Netflix regarding the sale of key assets including the Warner Bros. film studios. and the HBO Max streaming service. Entering the exclusivity phase means Netflix has been recognized as the preferred bidder, ahead of competitors such as Paramount Skydance and Comcast.

In recent days, a new situation has become clear for Warner Bros. Discovery. As we reported earlier, there were several candidates for the media giant. Paramount Skydance was interested in taking over the entire company (including traditional television), but Netflix, for example, wanted to buy only the pearls in the crown – the studio and streaming.

According to American media, Netflix's offer was to be the most attractive for WBD. Netflix was to offer the highest valuation per share for the acquired segment (estimated at approximately USD 28while the closing price on Thursday was $24.54). Previously, it was speculated that the target price for WBD was USD 30 per share.

Netflix also allegedly offered favorable terms to secure the transaction. The key element is Netflix's commitment to pay up to $5 billion in compensation to WBD if the merger is blocked by federal regulators. This security mechanism minimizes the legal risk for the seller and significantly contributed to further talks by the WBD management board. Bloomberg News reported that the companies could announce an agreement within a few days.

Paramount: Netflix favored in negotiations

The decision to grant Netflix exclusive talks sparked an immediate reaction from rival Paramount Skydance, which filed a formal protest. Paramount accused WBD's management of unfair and non-transparent conduct of the sales process, suggesting favoritism to Netflix and violation of the principles of due diligence and market competition.

The potential merger is the subject of widespread debate in Hollywood and Washington. Influential members of the film industry have expressed deep concern about market concentration, arguing that the combination of these streaming powerhouses (HBO Max and Netflix) will create a de facto monopolywhich may negatively impact independent production and theatrical distribution. Warner Bros. Library it is one of the most valuable in Hollywood and includes such series as “Harry Potter”, “Game of Thrones” and DC Comics. Appeals have been sent to the US Congress calling for a detailed antitrust review of this transaction, highlighting the risk to content diversity.

Netflix, in turn, argues that platform integration can benefit consumers by optimizing subscription costs. The final completion of the transaction now depends on the outcome of the talks and subsequent regulatory decisions.

Prepared by JM

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