Netflix–WBD deal risky for Netflix, riskier for Warner: Former Assistant Attorney General Kanter

Core Viewpoint - The regulatory risks associated with the potential merger between Netflix and Warner are significant, raising concerns about the certainty of closing the deal and the potential for regulatory challenges across various jurisdictions [2][3][5][6]. Regulatory Risks - The deal faces substantial regulatory scrutiny at federal, state, and international levels, which could delay the approval process and create uncertainty for Warner [3][5]. - Historical precedents, such as the failed mergers involving AOL and Time Warner, suggest that claims of increased efficiency and output from mergers may not materialize [6]. Stakeholder Concerns - Various stakeholders, including theaters, states, creators, and competitors, are likely to express concerns about the merger, potentially leading to regulatory actions against it [5]. - The unique nature of Warner's assets, particularly its streaming content and extensive library, may argue against the merger's benefits, as these assets are difficult to control and have a significant impact on the industry [7]. Legal Considerations - There is a possibility that Paramount could consider legal action against its board if the merger fails to pass regulatory scrutiny, arguing that the board did not fulfill its obligations to shareholders [4].