Netflix-Warner Bros Deal Reportedly Seen As ‘Competition Concern’ By FCC

• The FCC, which regulates broadcast TV licenses, doesn’t have jurisdiction over the Netflix deal.
• The U.S. Justice Department is already reviewing any competition concerns raised by the proposed acquisition of Warner Bros. by Netflix and the hostile bid by Paramount. 
• Netflix has paused its share buyback program to accumulate cash to help fund the pending acquisition of Warner Bros. 
   

Federal Communications Commission Chairman Brendan Carr reportedly sees “legitimate competition concerns” in Netflix Inc.’s proposed acquisition of Warner Bros. Discovery Inc.’s studios and streaming businesses.

As per a report from Bloomberg News, Carr said in an interview that he doesn’t see the competition concerns if Paramount Skydance Corp. were to acquire those assets.

Competition Concerns

“What you’ve seen Netflix do as a general matter, in terms of their organic growth, is fantastic,” Carr, who is an appointee of President Donald Trump, said. “There are legitimate competition concerns that I’ve seen raised about their acquisition here and just the sheer amount of scale and consolidation you can see in the streaming market,” he added. 

The FCC, which regulates broadcast TV licenses, doesn’t have jurisdiction over the Netflix deal. There is a scenario in which the commission might have to review a Paramount-Warner Bros. combination because Paramount, owner of the CBS TV network, plans to raise money from foreign sources, Carr said, as per the report.

The U.S. Justice Department is already reviewing any competition concerns raised by the proposed acquisition of Warner Bros. by Netflix and the hostile bid by Paramount. 

The department’s antitrust division is seeking additional information from both companies under what is known as a “second request,” the report said. 

Netflix-WBD Efforts To Get Deal Done

Netflix Inc. and Warner Bros. on Tuesday announced that they have amended their agreement to acquire WBD into an all-cash deal in an attempt to fend off Paramount Skydance’s hostile bid.

The new agreement offers WBD shareholders $27.75 per share in cash.

Recent Earnings

The streaming giant posted an adjusted profit of $0.56 per share, slightly above analyst estimates of $0.55 per share, according to data from Fiscal.ai.

Netflix has paused its share buyback program to accumulate cash to help fund the pending acquisition of Warner Bros. 

How Did Stocktwits Users React?

Retail sentiment around NFLX trended in ‘extremely bullish’ territory amid ‘extremely high’ message volume.  Meanwhile retail sentiment around WBD and PSKY trended in ‘bearish’ territory amid ‘normal’ message volume.

Shares of Netflix have fallen 10% over the past 12 months, Paramount Skydance shares have jumped 10% over the same period. 

Meanwhile, WBD shares have surged 181% over the past year.  

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on