In an era where streaming giants dictate the pulse of entertainment, few voices cut through the corporate spin quite like Matt Stoller's. The antitrust crusader and director of American Economic Liberties Project has unleashed a blistering takedown of the rumored $72 billion merger between Netflix and Warner Bros. Discovery (WBD), branding it not just a bad deal, but a "disaster for America."
With Netflix poised to swallow the third-largest streamer — via HBO Max - and lock away a treasure trove of IP including the DC Universe, Harry Potter franchise, and Game of Thrones lore, Stoller warns of an impending chokehold on competition that could strangle theaters, creators, and consumers alike.
This isn't hyperbole; it's a calculated assault on the open markets that once fueled Hollywood's golden age.
At its core, Stoller's critique hinges on the raw economics of consolidation. Netflix, already commanding over 260 million global subscribers as the undisputed streaming kingpin, would fuse with WBD's vast library, creating a behemoth that sidelines rivals like Disney+ and Amazon Prime Video. The result? A content fortress where licensing deals dry up, forcing other platforms to scramble for scraps or hike prices to stay afloat.
We've seen this playbook before: Post-2019 Disney-Fox merger, the number of major studios shrank from six to five, and theatrical wide releases plummeted by 44% — from an average of 24 films per year to just 14, according to TD Cowen analysts.
The ripple effect gutted independent exhibitors like AMC and Regal, many of which teetered on bankruptcy amid reduced output and delayed premieres. Stoller argues this Netflix-WBD union would accelerate that decay, with Netflix's theater-averse ethos — exemplified by its direct-to-stream strategy for originals — poised to "kill the entire movie theater business" once and for all.
Whispers from anonymous filmmakers underscore the dread. Industry insiders, speaking off the record, fear the combined entity would "hold a noose around the theatrical marketplace," prioritizing bingeable exclusives over big-screen spectacles. This isn't mere paranoia; it's rooted in precedent. The Biden administration's top antitrust enforcer, Jonathan Kanter, has already flagged Netflix as the bidder facing the steepest legal hurdles under the Clayton Act, which prohibits mergers that substantially lessen competition.
Even Republican Senator Mike Lee, no fan of overregulation, has decried the deal as raising "serious competition questions — perhaps more so than any transaction I’ve seen in about a decade." With regulatory scrutiny intensifying — mirroring the DOJ's successful block of the 2022 Penguin Random House-Simon & Schuster merger — Stoller predicts a courtroom showdown that could expose years of anticompetitive maneuvering.
Drawing parallels to publishing, Stoller highlights how the blocked book deal preserved creator leverage. Had Penguin swallowed Simon & Schuster, it would have crushed bargaining power for authors, much like this merger threatens writers, directors, and actors in Hollywood.
Post-block, private equity firm KKR scooped up Simon & Schuster and ramped up investments in new titles, restoring profitability without the monopolistic squeeze — proof that independent operations can thrive. In film, the stakes are higher: A unified Netflix-WBD could dictate terms in negotiations, echoing the 2023 strikes where streamers like Netflix lowballed residuals amid ballooning subscriber fees.
Behind the boardroom glamour lies a crasser motive, per Stoller: WBD CEO David Zaslav stands to pocket a staggering $500 million windfall from the sale, while Wall Street financiers dismiss traditional Hollywood as unprofitable compared to tech behemoths like Apple or Google. Yet Stoller counters with evidence that quality content endures.
Simon & Schuster's post-merger rebound shows viable paths exist without tech-style scale; the real culprit is decades of deregulation that eroded safeguards like the financial syndication rules (which barred TV networks from owning their programming) and, crucially, the Paramount Decrees.
Those decrees, born from the 1948 Supreme Court ruling in United States v. Paramount Pictures, Inc., dismantled the studios' iron grip on distribution. Forcing the Big Six — Paramount, MGM, Warner Bros., RKO, 20th Century Fox, and Columbia — to divest their theater chains ended the "block booking" era, where majors flooded screens with mediocre filler to prop up hits. The fallout? An explosion of independent filmmakers, diverse voices, and a surge in cinematic quality that defined the New Hollywood of the 1970s.
One ironic side effect: Studios offloaded TV rights en masse, viewing syndication as a sideshow. Disney, ever the outlier among majors, held firm on its catalog, laying the groundwork for its theme-park empire and later streaming dominance.
Fast-forward to today, and the irony thickens. Deregulation since the late 1980s — capped by the FCC's 2019 rollback of syndication limits — has revived vertical integration, letting conglomerates like Disney gobble ABC and ESPN while hoarding Marvel's multiverse.
Netflix-WBD would turbocharge this reversal, blending production, distribution, and exhibition into a streaming monolith. Enter Paramount Global, the very studio scarred by those 1948 decrees, now crying foul over the bidding process's "bias" as a spurned suitor. Zaslav's WBD has flirted with sales before — failing spectacularly each time—suggesting desperation over strategy.
Stoller's verdict is unsparing: This merger isn't innovation; it's "arson" by executives like Netflix's Ted Sarandos and Zaslav, who favor price gouging and content silos over sustainable storytelling. With streamers already jacking up fees — Netflix's ad-tier jumped 43% in 2024 alone — the deal promises more pain for viewers and a hollowed-out industry reliant on foreign imports. The silver lining? A judicial smackdown, as with ARM-Nvidia or Adobe-Figma, could reinvigorate competition, forcing a return to the Paramount-era ethos: Open markets breed bold cinema.
In Stoller's eyes, blocking this catastrophe isn't just antitrust housekeeping — it's a lifeline for American creativity. As Hollywood teeters between blockbuster nostalgia and algorithm-driven slop, his call to arms reminds us: True disruption comes from diversity, not dominance.
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Author: Slava Vasipenok
Founder and CEO of QUASA (quasa.io) - Daily insights on Web3, AI, Crypto, and Freelance. Stay updated on finance, technology trends, and creator tools - with sources and real value.
Innovative entrepreneur with over 20 years of experience in IT, fintech, and blockchain. Specializes in decentralized solutions for freelancing, helping to overcome the barriers of traditional finance, especially in developing regions.
