Netflix co-CEO Ted Sarandos went to the White House in mid-November to meet with US President Trump. The two discussed a range of topics during the meeting, which lasted more than an hour, including the acquisition of Warner Bros. Discovery, people familiar with the matter said.
Trump said Warner Bros. should be sold to the highest bidder, people familiar with the matter said. Sarandos agreed and explained the advantages of Netflix's bid. Sarandos said Netflix is not a monopoly and had suffered subscriber losses a few years ago.
Sarandos said Netflix does not have a broadcast network or cable channels, while its competitors offer more than just streaming services. He also said Netflix is only the fifth or sixth largest content distributor in television. After acquiring Warner Bros., Netflix will be as large as YouTube in the US market.
Sarandos came away believing that, contrary to claims from rival Paramount Skydance, Netflix would not face immediate opposition from the White House. He judged that the Ellison family, which controlled Paramount, had overestimated its political advantages and was likely to bid low. This creates opportunities.
Last Friday, Netflix agreed to acquire Warner Bros. for $82.7 billion, including assuming the latter's debt, setting one of the largest media mergers in history. If the deal goes through, the Silicon Valley streaming giant will acquire one of Hollywood's oldest and most legendary film companies, including its former inspiration, HBO.
"Well, it's going to be a process and we'll see. Netflix is a great company and they're doing a great job," Trump said Sunday ahead of an event at the Kennedy Center. He praised Sarandos as "fantastic" and confirmed that he recently met with him in the Oval Office.
"But it's a substantial market share. That could be a problem," Trump added, noting that he would be "involved" in the decision.