Netflix Acquisition Bid and Content Scrutiny at Senate Hearing

Netflix Co-CEO Ted Sarandos Addresses Senate on Proposed Warner Bros. Discovery Acquisition

Netflix Co-CEO Ted Sarandos recently appeared before a Senate Judiciary subcommittee to address the company's proposed acquisition of Warner Bros. Discovery's studio, film, and streaming divisions. The deal is reportedly valued at over $83 billion. During the hearing, senators raised concerns regarding Netflix's content, alleged political biases, and the potential impact of the merger on competition and consumers. Sarandos also previously engaged with former President Donald Trump regarding the entertainment industry and the acquisition.

Proposed Acquisition Details

Netflix is actively pursuing the acquisition of the studio, film, and streaming divisions of Warner Bros. Discovery, with reports indicating a bid exceeding $83 billion. This significant bid was identified by Warner Bros. Discovery in early December. Other companies, including Paramount, are also reportedly pursuing a takeover of Warner Bros. Discovery, with Paramount's bid cited at $108 billion. The Department of Justice holds primary regulatory authority over such mergers.

Ted Sarandos, Netflix Co-CEO, addressed industry sentiment that a single buyer should not acquire Warner Bros., stating:

"What people would like to see is no deal. But that's not possible. There are two outcomes of this deal, and we have a signed deal done."

He further maintained that the merger "would stand on its merits."

Senate Judiciary Subcommittee Hearing

Netflix executives, including Co-CEO Ted Sarandos, participated in a Senate Judiciary subcommittee hearing focused on antitrust, competition policy, and consumer rights. Warner Bros. Discovery Chief Revenue Officer Bruce Campbell also attended. The hearing primarily centered on the potential impact of the merger on competition, markets, and consumers, alongside discussions about content and labor within the industry.

Several Republican senators questioned Netflix's content and its perceived political leanings:

• Senator Ted Cruz (R-Texas) characterized Netflix as a "left-wing company" and questioned how a merged entity could avoid becoming a "propaganda outlet pushing one particular political view." He cited Netflix co-founder Reed Hastings' history of donations to Democratic causes and the company's agreement with former President Barack Obama. Cruz also referenced Billie Eilish's Grammy speech, asking if the executives believed they were on "stolen land," suggesting it reflected a left-wing bias.
• Senator Eric Schmitt (R-Missouri) asserted that a majority of Netflix's content is "overwhelmingly woke" and promotes "DEI and wokeness," referencing "race swapping" in character portrayals. He also questioned Sarandos regarding Netflix's social media posts from 2020 concerning racial justice events.
• Senator Josh Hawley (R-Missouri) questioned Netflix's children's content, asking why "so much of Netflix content for children promotes a transgender ideology."

Senators Cruz and Schmitt cited concerns aligning with a report from the Heritage Foundation's Oversight Project, which described Netflix as influencing Americans towards "leftwing ideological dogma."

Ted Sarandos responded to the senators' criticisms:

• He stated that Netflix has "no political agenda of any kind" and offers "a great deal of programming... for all left, right and center," emphasizing that pushing a political agenda would be a "bad business decision."
• He confirmed that Netflix provides "state of the art tools for parents" for content management.
• Regarding the 2020 social media posts, Sarandos acknowledged they could be perceived as political and expressed a hope that such posts "wouldn’t happen again," though the posts remain on Netflix's X feed. He noted other companies also made similar statements at the time.
• Regarding Senator Cruz's question on "stolen land," Sarandos stated he had "no idea of the history of this land where we’re sitting today."

Senator Cory Booker (D-New Jersey) raised concerns about a "constitutional crisis" and a "corrupt" system. He specifically questioned former President Donald Trump's purchase of Netflix stock prior to Warner Bros. Discovery accepting a bid for its assets, and also expressed concern about the independence of actors evaluating the merger. Sarandos declined to comment on former President Trump’s personal finances in response to Booker's question.

Interactions with Former President Trump

Netflix Co-CEO Ted Sarandos made an unannounced visit to the White House on November 24, preceding the public revelation of Netflix's winning bid for Warner Bros. Discovery. Sarandos affirmed that he believes it is "wholly proper for the President of the United States to talk to leaders of industry," clarifying that the meeting with former President Donald Trump was not specifically about the merger deal. He stated that the President's interest is in "protecting and creating American jobs."

On December 7, Donald Trump commented on Sarandos, stating:

"Ted is a fantastic man. I have a lot of respect for him."

Trump also noted concerns regarding market share, adding, "But it's a lot of market share, so we'll have to see what happens."

On January 11, Trump posted an article from One America News Network on Truth Social titled "Stop the Netflix Cultural Takeover." The article, written by attorney John Pierce, characterized Netflix as "the woker, ideologically preferred buyer" compared to other potential bidders, such as David Ellison and Larry Ellison.

Sarandos responded to the post in an interview, stating, "I don't know why he would have done that." He added, "No conversation we ever had was about any of the things that were in that article that he posted. I don't want to overread it, either."

Theatrical Release Strategy

Sarandos also addressed concerns from major movie theater chains regarding Netflix's commitment to theatrical releases. He reiterated a plan to maintain a 45-day theatrical window for films, stating:

"I want to win opening weekend. I want to win box office."