Feb. 4 (UPI) — Netflix co-CEO Ted Sarandos faced the Senate Judiciary Committee’s antitrust subcommittee to answer questions about the company’s proposed merger with Warner Bros. Discovery.
Lawmakers on Tuesday asked Sarandos about Netflix’s plans for the merged conglomerate, including content, pay and consumer value.
The $83 million merger, which includes the Warner Bros. studio, HBO and HBO Max, isn’t final. WBD shareholders must vote to choose between Netflix and Paramount, and the merger must pass federal scrutiny.
In October, Warner Bros. said it was open to offers after getting unsolicited ones. On Dec. 5, after a bidding war between Netflix and Paramount Skydance, Warner Bros. said it would accept Netflix’s offer.
Then Paramount launched a hostile bid to buy WBD. The WBD board told shareholders not to accept the Paramount bid because Oracle creator Larry Ellison, father of Paramount CEO David Ellison, wasn’t backing the deal. On Dec. 22, Paramount said that it has Larry Ellison’s backing of $40 billion in equity. On Jan. 20, Netflix changed its offer to all cash to be more attractive to shareholders.
Warner Bros Discovery Chief Revenue and Strategy Officer Bruce Campbell also testified, but Paramount CEO David Ellison declined to participate.
Sen. Mike Lee, R-Utah, said of the merger, “All told, one might say that Netflix seeks to become the one platform to rule them all, or at least to exercise a significant amount of market dominance. The merger raises numerous antitrust concerns, in a nutshell, consolidating both production and distribution power.”
President Donald Trump has said he will be “involved” in the federal review of the deal, which will go through the Department of Justice. Trump didn’t elaborate on how involved he will be in the decision.
Sen. Cory Booker, D-N.J., questioned Sarandos about a meeting he had with Trump before the merger was announced.
Sarandos said the conversation was during a meeting that discussed issues in the entertainment industry.
“It was not a meeting specifically to talk about the deal,” Sarandos said. “I have confidence in this case on the merits and that it will be run by the Department of Justice.”
He said he has met with the president a few times.
“We have talked about the state of the entertainment industry, in general, production, the economy, runaway production [filming outside of the United States], value of incentives, the cost of tariffs, all the different ways that we can protect American jobs,” Sarandos said. “I think it’s wholly proper for the president of the United States to talk to leaders of industry about the industries that they’re running.”
He said he did update Trump on the merger, but that it was a very small part of the meeting.
Hollywood organizations have also raised concerns about the deal.
The Writers Guild of America said the merger would “eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers and reduce the volume and diversity of content for all viewers.”
Sarandos said the merger would not impede opportunities for writers and producers.
“They need to know that people are looking out for them,” he said. “And we are looking out for them.”
He said that Netflix’s prices had risen more slowly than other streaming services and only when the company added more content.
“Our history, and my own professional history, has been about adding more and more value to consumers,” Sarandos said. “And you do that by adding more choice.”
Sen. Josh Hawley, R-Mo., pressed Sarandos on Netflix’s content.
“Why is it that so much of Netflix content for children promotes a transgender ideology?” he asked.
Sarandos replied that Netflix has “no political agenda of any kind.”
Hawley then claimed that Netflix’s children’s shows were “so full of a highly sexualized, highly controversial, agenda.”
Sarandos responded that the accusation was “inaccurate.”
“We have millions of hours of children’s programming … we feature a wide variety of stories and programs to meet a wide variety of people’s taste.”