House Democrats Say They Could Undo a Paramount-Warner Bros. Discovery Deal

Democratic Reps. Sam Liccardo and Ayanna Pressley sent a letter to the board of Warner Bros. Discovery on Wednesday, threatening to unravel any potential takeover of the media giant by Paramount Skydance when the party retakes Congress or the White House.

The lawmakers cited national security concerns as the main reason for their skepticism of any potential deal. They noted the bid is backed by Affinity Partners, the firm founded by President Donald Trump’s son-in-law Jared Kushner with a $2 billion investment from Saudi Arabia’s public investment fund, and state-owned funds from the United Arab Emirates and Qatar.

“As one of the most influential media companies in the world, Warner Brothers Discovery shapes America’s news, entertainment, and cultural content like few companies on the planet,” Liccardo said in a press release. “We cannot allow powerful–and brutal–foreign-backed investors access to this trove of personal data, and to obtain influence over our nation’s news ecosystem, without full scrutiny mandated by the law.”

“Shareholders deserve a full accounting of the regulatory and reputational risks tied to this sale,” he continued.

The lawmakers also pointed out that a future Democratic-controlled Congress or White House “will review many of the decisions of the current Administration, and may recommend that regulators push for divestitures, which would undermine the strategic logic of this merger.”

Warner Bros. Discovery announced on Friday that it had agreed to sell its movie, television and streaming assets to Netflix. In a press release, the two companies said the acquisition would comprise a combination of cash and stock valued at $82.7 million, more than Warner Bros. Discovery’s entire market value of $60 billion.

On Monday, the acquisition drama ramped up when Paramount Skydance launched a hostile takeover attempt for Warner Bros. Discovery, to the tune of an $108.4 billion all-cash bid. The offer, led by Paramount CEO David Ellison, bypassed Warner Bros. Discovery’s board of directors and appealed directly to stakeholders.

Trump weighed in on the Netflix deal on Sunday during an appearance at the Kennedy Center Honors red carpet, saying he intends to “be involved in that decision.”

“That’s got to go through a process, and we’ll see what happens,” Trump told reporters about any proposed merger or acquisition.

“They have a very big market share,” Trump said of Netflix. “When they have Warner Bros., that share goes up a lot.”

Ellison confirmed to CNBC on Monday that he’s “had great conversations with the president about this,” but declined to comment on the nature of their conversation.

The Wall Street Journal reported Tuesday that Ellison’s father, a close Trump ally, had spoken with the White House about making sweeping changes at CNN, a Warner Bros. Discovery property that has long been a source of Trump’s ire.

Though the Paramount takeover attempt has attracted an outsized share of the attention on Capitol Hill, several prominent Democrats have also spoken out about Warner Bros. Discovery’s potential merger with Netflix as well.

Sen. Elizabeth Warren, ranking member of the Senate Banking Committee, said in a statement on Friday that the plans amount to an “anti-monopoly nightmare.”

“A Netflix-Warner Bros. would create one massive media giant with control of close to half of the streaming market — threatening to force Americans into higher subscription prices and fewer choices over what and how they watch, while putting American workers at risk,” Warren said in the statement.

“Under Donald Trump, the antitrust review process has also become a cesspool of political favoritism and corruption,” she continued. “The Justice Department must enforce our nation’s anti-monopoly laws fairly and transparently — not use the Warner Bros. deal review to invite influence-peddling and bribery.”

Neither Warner Bros. Discovery nor Paramount Skydance responded to requests for comment.

The House members’ letter on Wednesday demands a halt to “negotiations with Paramount Skydance or any other buyer financed by foreign sovereign investors” and asks that a voluntary notice be filed with the Committee on Foreign Investment prior to a binding agreement. The lawmakers requested a response no later than Dec. 22.

“A failure to file with CFIUS when foreign investors may obtain control or meaningful contractual rights would represent a serious lapse in fiduciary judgment and could expose the company to significant regulatory and reputational harm,” the lawmakers wrote.