DOJ Probes Netflix Merger; Paramount Bid Clears Hurdle
The U.S. Department of Justice has reportedly begun an antitrust investigation into Netflix’s proposed merger with Warner Bros. Discovery. Meanwhile, a rival $108 billion bid for Warner Bros. Discovery from Paramount-Skydance has cleared a key U.S. antitrust hurdle, signaling a potential major shakeup in the entertainment industry.
- The Paramount-Skydance bid for the entirety of Warner Bros. Discovery is valued at $108.4 billion, while the competing offer from Netflix is for $82.7 billion and only includes WBD's studio and streaming assets. If WBD accepts the Paramount offer, it would be required to pay Netflix a $2.8 billion termination fee. - The DOJ's probe into the Netflix deal is examining potential violations of the Clayton Act, which addresses mergers that could substantially lessen competition, and the more rarely used Sherman Act, which targets illegal monopolization. The investigation is scrutinizing if Netflix's market power could create anticompetitive leverage over creators and harm movie theaters. - As of February 2026, Netflix's market capitalization stands at approximately $332 billion. Warner Bros. Discovery has a market cap of about $71 billion, and Paramount Global's is around $11.8 billion. - The clearance for the Paramount-Skydance bid involved the expiration of a waiting period under the Hart-Scott-Rodino Act on February 19, which removes a statutory hurdle but does not represent formal DOJ approval of the deal. Netflix's Chief Legal Officer, David Hyman, has stated that these routine milestones do not signal a final decision from the DOJ. - Warner Bros. Discovery has been aggressively paying down debt under CEO David Zaslav, reducing its gross debt from a peak of over $50 billion to around $34.5 billion by late 2025. This strategy is a key factor in Zaslav's compensation, though shareholders recently voted against his $52 million pay package in a non-binding decision. - In the U.S. streaming market, Amazon Prime Video holds a 22% share, closely followed by Netflix with 21%. Other major players include Disney+ and Max, demonstrating a competitive landscape that regulators will consider. - The rival bids come as Shari Redstone, whose family controls Paramount Global through the holding company National Amusements, has been exploring a sale. David Ellison's Skydance Media has been a leading suitor for National Amusements.
