Sen. Elizabeth Warren (D-Mass.) is sounding the alarm over a potential merger between Paramount Skydance Corp. (NASDAQ:PSKY) and Warner Bros Discovery Inc. (NASDAQ:WBD), while urging regulators to ignore political pressure as they evaluate the deal.
Mega Merger A ‘Five-Alarm’ Antitrust Fire
On Monday, in a post on X, Warren flagged Paramount’s decision to launch a hostile all-cash bid to acquire Warner Bros Discovery, in a deal valued at $108.4 billion.
According to Warren, this deal “would be a five-alarm antitrust fire,” given the implications of further consolidation in the entertainment industry on consumers, creators, and workers.
See Also: Netflix Stock Tumbles: What’s Going On?
Warren also highlighted that the deal was backed by allies of President Donald Trump, with Paramount Skydance’s CEO, David Ellison, being the son of Oracle Corp. (NYSE:ORCL) co-founder and CEO, Larry Ellison, who has been a prominent Trump supporter for years.
She further warned that the acquisition was being funded by “foreign money,” without mentioning any names or clarifying which foreign backers she was referring to.
As a result, she’s urged for a transparent review of the deal “based on the law and facts” by regulators, without being swayed by favoritism or connections to Trump.
Paramount Skydance did not immediately respond to Benzinga’s requests for a comment on this matter. This story will be updated as soon as we receive a response.
Trump Will Be Involved In The Decision
The hostile bid comes just days after streaming giant Netflix Inc. (NASDAQ:NFLX) entered into a definitive agreement to acquire Warner Bros Discovery in a deal valued at $82.7 billion last week.
Paramount objected to the deal, accusing Warner Bros Discovery of tilting the auction process to favor Netflix, raising concerns of potential management conflicts tied to incentives, which it said could harm shareholder value.
Netflix’s proposal, too, has come under scrutiny from prominent antitrust activists, such as Matt Stoller of the American Economic Liberties Project, who called the mega-merger a “disaster for America,” saying that it stands to “crush the bargaining power of writers, directors, and actors.”
Trump echoed similar concerns regarding the deal on Sunday, saying that the merged company would command a “very big market share,” which he thinks “could be a problem.”
He said, “I'll be involved in that decision,” signaling a more hands-on role in the regulatory review of the merger, while also applauding Netflix co-CEO Ted Sarandos as a “fantastic” leader who has “done a legendary job” at the helm.
Shares of Paramount Skydance were up 9.02% on Monday, closing at $14.57, and are up 0.55% overnight. The stock scores high on Value in Benzinga’s Edge Stock Rankings, but has an unfavorable price trend in the short, medium and long terms. Click here for deeper insights into the stock, its peers and competitors.
Read More:
Photo courtesy: Sheila Fitzgerald / Shutterstock.com
