What role will Trump play in the battle over Warner Bros. Discovery?
The fight over the future of Warner Bros. Discovery is really a battle to decide who will control much of the news and entertainment Americans consume. So perhaps it is no surprise that President Donald Trump is wading straight into the middle of the fray between Netflix and Paramount Skydance.
Trump’s assertion this week that he will play a role in deciding the winner of that battle tests the “boundaries of his power,” said The New York Times. “I’ll be involved in that decision,” he said to reporters. Congress gave merger oversight authority to the Federal Trade Commission and the Justice Department’s antitrust division, said the Times, but the law does not “specify a personal role for presidents” to influence that process “on a whim or for their own benefit.” Trump is thrusting himself into that process, however, forcing executives and shareholders in business sectors far beyond the media industry to “consider the risk” that the president will get involved.
Netflix won the initial bid for Warner Bros., but Paramount this week announced its attempt to bypass Netflix with $30-a-share hostile takeover effort. A Paramount-Warner merger “could give Trump even more influence over U.S. media,” said The Conversation. The new conglomerate under the control of mogul (and Trump ally) Larry Ellison and his son, David Ellison, would “control a vast share of U.S. viewership.” Paramount already owns, and has upended, CBS News. Adding Warner-owned CNN to the mix would “concentrate oversight of two of the country’s most prominent newsrooms” under an owner with “strong ties to Trump.”
What did the commentators say?
It is “normal” for the federal government to scrutinize and even attempt to block a “mega-merger deal,” said Brian Stelter at CNN. But it is not normal for a president to “openly opine about it, or to say that he’ll be involved.” It is not just Paramount that understands the changed landscape. So does Netflix CEO Ted Sarandos, who reportedly met with Trump ahead of his company’s bid for Warner Bros. Trump’s involvement raises concerns about “favor-trading and corruption” and “could make the most earth-shattering Hollywood merger in years significantly more difficult to move forward.”
“Let Warner’s shareholders decide,” said The Wall Street Journal editorial board. Neither the Paramount nor the Netflix offer “presents major competition concerns” for federal antitrust enforcers, but each bid should be “analyzed without political interference.” Trump’s involvement is not the “way capitalism is supposed to work,” but now businesses and shareholders are “at the mercy of Trump’s mood.”
What next?
The political battlefield over the company’s sale extends beyond the president. Trump’s son-in-law, Jared Kushner, is part of Paramount’s bid, said Axios. Democrats are also weighing in. Reps. Sam Liccardo (D-Calif.) and Ayanna Pressley (D-Mass.) said in a letter that they may “try to block or unravel any acquisition by Paramount,” said Semafor. The company’s offer is backed by sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi. That creates “foreign influence risks,” said the lawmakers.