FCC Chair Says CNBC WBD-Paramount Merger Deal ‘Cleaner’ Than Netflix

FCC Chairman Brendan Carr told CNBC of Paramount Bid to buy Warner Bros. Discovery is “cleaner” than of NetflixThe addition is expected to be approved “very soon”.

“There was a lot of concern when Netflix was out there as a potential buyer,” Carr said Tuesday at Mobile World Congress in Barcelona. “That particular combination raised competition concerns.”

Revised by Paramount Skydance Offer to purchase the entire WBD $31 per share, up from $30 per share last week, which the WBD board deemed superior to the existing Netflix proposal.

Netflix had decided to buy the media giant’s studio and streaming business for $27.75 a share, but said it was “not financially attractive” in light of Paramount’s offer.

Carr spoke to CNBC Arjun Kharpal In an extensive discussion about WBD-Paramount mergerwhich requires sign-off from regulators.

Carr told CNBC that while Netflix will have a “very difficult road” to get regulatory approval, Paramount is “very clean, not raising all the same kinds of concerns.”

“I think there are some real consumer benefits that can arise from that,” he added.

Both deals raised questions of antitrust US theater industry, Expressing concern about possible job loss or A short film slate in Hollywood. The proposed merger with Netflix also raised questions all around flow dominanceBecause it would have brought together two of the most popular streaming services in Netflix and WBD’s HBO Max.

On Monday, Paramount said it plans to release at least 30 films a year, or 15 per studio. Officials also said that it will happen Combine its streaming service Paramount+ with HBO Max In a service after the transaction is completed.

It’s unclear what the regulatory process will involve for Paramount and WBD. The FCC typically reviews deals involving Paramount’s CBS with one of the nation’s broadcasters, and last year supported Paramount’s merger with Skydance.

“If there’s any FCC role, it’s going to be a very minimal role. And I think it’s a good deal and I think it should be done very quickly,” Carr added.

Unlike Netflix’s proposed deal, Paramount’s bid includes WBD’s pay-TV networks, such as CNN, TBS and TNT.

Paramount has offered a $7 billion breakup fee if the deal does not receive regulatory approval. WBD has also already paid the $2.8 billion breakup fee it paid Netflix because that deal was called off.

some Concerns about Netflix-WBD The deal included higher consumer prices and less competition.

US President Donald Trump said in December that a potential deal “could be problematic” because of the increased market share it would give Netflix. A month later, he retracted those comments and said the deal would be fully reviewed by the Justice Department.

In a statement, Democratic Sen. Elizabeth Warren called the Paramount and WBD merger “an antitrust disaster that threatens American families with higher prices and fewer choices.”

Analysts at investment bank Raymond James said last week that the Paramount-WBD deal was “meaningfully simpler” than the Netflix deal.

“The deal has new challenges around news, cable networks, international linear networks, etc., but we still think the WBD/PSKY deal is comprehensive,” the analysts wrote.

“And, especially after the reaction to the WBD/NFLX deal, we believe PSKY’s political position with the current US administration is much stronger than that of Netflix.”

However, Paren Knadjian, a partner at consulting firm EisnerAmper, said last week that the Paramount-WBD deal is not a done deal, adding that the path forward looks more nuanced.

The Netflix-WBD deal focuses primarily on library content, but Paramount’s deal is a “horizontal integration” between cable TV, sports, streaming and news, he said.

“I think the biggest thing we’re going to do is focus on the concentration of intellectual property under one roof,” Nadjian told CNBC. “What powers this new element in terms of the ability to charge more?”

“Regulatory pressure, political pressure, these are things that will certainly delay and complicate the deal, and I think significant concessions will have to be made to get it done,” Nadjian added.

Also a pending question is whether the Committee on Foreign Investment in the United States will find a problem with the treaty’s structure. Paramount’s offer includes approximately $24 billion from Gulf state sovereign wealth funds.

— CNBC’s Lillian Rizzo and Alex Sherman contributed to this report