Copyright Newsweek
A potential acquisition of Warner Bros. Discovery by Paramount could spark antitrust scrutiny, although President Donald Trump’s connection to Larry Ellison might “help smooth the path for a deal,” a media analyst told Newsweek, as another agreed with the sentiment. Warner Bros. Discovery, which owns CNN, HBO and DC Studios, announced a “review of strategic alternatives” Tuesday that could drastically transform Hollywood and likely set off a bidding war among media behemoths like Netflix and Comcast. Paramount, which completed an $8 billion merger with Skydance Media in August, recently made a second offer for Warner Bros. Discovery, but the proposal was rejected this week, The Wall Street Journal reported Tuesday, citing sources close to the matter. David Ellison, son of billionaire Larry Ellison and CEO of Paramount, made the second offer after the bid for the entire company last month was rebuffed, the newspaper reported. The connection between Larry Ellison and Trump could “help smooth the path” for a deal, media analyst and publicity manager Jordan Lee told Newsweek, especially if the administration takes a friendlier stance on consolidation. “That relationship might give Ellison some added political cover, but it’s unlikely to shift the fundamental outlook,” Lee said. Even with Trump’s influence looming, the potential acquisition wouldn’t qualify as a monopoly given the continued dominance of Disney, Netflix, Amazon and other companies in the streaming content industry, Lee added. “If Paramount does acquire Warner Bros. Discovery, it’s going to raise antitrust eyebrows, but not necessarily trigger a full shutdown from regulators. If the merger does happen, it would tighten an already shrinking field of major content producers, but it wouldn’t create a true monopoly when you consider competition from Disney, Netflix, and Amazon.” The potential acquisition could face scrutiny from antitrust regulators at the Department of Justice and Federal Trade Commission, but Tuesday’s announcement by Warner Bros. Discovery signals something else, Lee said. “In reality, the bigger story is what the deal signals,” Lee continued. “It’s a continued race for scale as legacy media companies fight to stay relevant against digital streaming giants.” Crystal Gorges, media analyst and public relations expert, said Paramount acquiring Warner Bros. Discovery would “definitely raise eyebrows” among regulators. “These are two massive storytelling giants, and putting them together could shrink the number of creative voices that reach the public,” Gorges told Newsweek. “When so much entertainment funnels through one company, it limits diversity, not just in content, but in ideas.” U.S. regulators would “almost certainly take a hard look” at any deal involving the two companies, Gorges said. “This kind of merger isn’t just a business move; it affects how people consume information and culture,” she continued. “The real question isn’t only about monopoly laws — it’s about how much control over what we watch and believe ends up in the hands of a few corporations.” Media consultant Brad Adgate said the potential combination of CNN and CBS News would be concerning, especially with new management at Paramount and Bari Weiss overseeing CBS News. “I think the current administration has been very active in the media landscape and how and what kind of information is distributed,” Adgate told Newsweek Tuesday. Trump’s ties to Larry Ellison would be an asset for Paramount’s potential acquisition of Warner, Adgate said. “I think media and tech moguls have been striving to accommodate the president in hopes of favorable decisions.” U.S. merger guidelines are also a “moving target,” he added. “There's been some agreements in the past with Disney & Fox studio assets as well as Comcast & NBCU,” he said. “The emergence of wealthy digital/tech companies over the past ten years — such as Amazon, Apple, Alphabet, Netflix — has helped to trigger the proposed mergers of traditional media companies such as WBD & Paramount Global. Also, the changing landscape has helped to ease government regulators into accepting these types of big media mergers.” With other suitors reportedly in play, specifically Netflix and Comcast, the possible sale may take some time, Adgate said, adding that he believes the “rapid diminished value of the cable industry” reflects the primary takeaway from Tuesday’s announcement by Warner Bros. Discovery.
