The proposed $82.7 billion acquisition of Warner Bros. Discovery by Netflix is encountering mounting regulatory and political headwinds, casting significant doubt on the mega-deal’s completion timeline.
Antitrust Authorities Launch Probe
According to a Friday report in the Wall Street Journal, the U.S. Department of Justice (DOJ) has initiated a formal investigation into Netflix’s business practices. The probe is centered on determining whether the planned merger involves anti-competitive tactics, with a specific focus on potential “exclusionary conduct.”
As part of the inquiry, investigators have issued a civil subpoena to at least one other major entertainment company to gather detailed information. The core question for regulators is whether absorbing Warner Bros. Discovery—including its assets like HBO, DC Studios, and the Harry Potter franchise—would unfairly stifle competition across the streaming and studio sectors. Netflix has previously countered such concerns by pointing to robust competition from platforms like YouTube and noting a high degree of subscriber overlap with HBO Max.
Political Pressure Mounts for Job Guarantees
Simultaneously, political opposition is coalescing in Washington. In a formal letter addressed to Netflix Co-CEOs Ted Sarandos and Greg Peters, Representative Laura Friedman and Senator Adam Schiff have demanded concrete guarantees regarding job security. This political intervention is driven by a steep 13 percent decline in local film production within Los Angeles during the third quarter of 2025.
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Given that Netflix is targeting cost synergies of $2 to $3 billion from the merger, lawmakers fear a further wave of job losses in an industry that has already shed 42,000 positions in the region. The company has been directed to respond to these concerns by February 15, 2026.
Stock Performance and Strategic Context
Despite the gathering regulatory storm, Netflix shares showed relative resilience at the week’s close. The stock finished Friday’s trading session at $81.43, marking a modest gain of 0.7 percent. However, the current price remains substantially below its 52-week high of $134.09, recorded in July 2025.
On the operational front, Netflix’s management continues to push its internationalization strategy to counter saturation in its domestic market. Co-CEO Greg Peters recently inaugurated a new Latin American headquarters in São Paulo. In terms of content, while the new thriller The Rip generated solid viewership, it failed to match the record-breaking numbers achieved by the summer blockbuster Happy Gilmore 2.
For investors, the key date on the horizon is February 15. The company’s formal response to Congress, coupled with the ongoing trajectory of the DOJ investigation, will be critical in determining whether the integration schedule for Warner Bros. Discovery can proceed or if Netflix will be forced to make significant concessions.
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