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Comment by afavour | Hacker News Reader

I wasn’t bowled over by the idea of Netflix ownership but a merge of Paramount and Warner seems way, way worse. In a sane political situation this would raise huge antitrust concerns but… well, here we are I guess.

If it does go through I wonder if there’s a scenario where it still works out for Netflix: they could pick up assets at bargain prices when the merged studios inevitably sell and lay off everything they can.

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The thing is it is less of an antitrust concern for two also-rans in an industry to merge than it is for the industry leader to buy a struggling competitor. People don’t like the politics of Paramount’s ownership but from a competition perspective this is the better outcome.

We’re talking about multiple industries here. In streaming Netflix is dominant. In terms of movie production studio Netflix is the also-ran compared to Warner and Paramount.

A purchase by Netflix would give them something they currently do not have. A purchase by Paramount is a much more direct merge of two competitors.

If the industry is defined as one that makes entertainment, then no one is dominant. Oracle and bytedance (tiktok), Meta (instagram), Alphabet (youtube), Reddit, Video Games, and even the sports leagues are huge competitors for screen time.

Even restricting the industry to professionally made videos, there is Apple, Amazon, Comcast, Disney, Netflix, Sony, and Paramount. Ignoring the small ones like A24 and Lionsgate. Having or not having Warner Bros be a separate entity seems inconsequential, considering the weight of the others.

Maybe this is too much of a side topic or tangent, but I think that mergers shouldn’t be legal by default once a company is a certain size, regardless of the level of competition.

I understand that there is a lot of competition and that a merger at this stage probably won’t harm competition significantly.

But that shaky justification can be used until suddenly there isn’t sufficient competition.

This reminds me of a recent Wendover Productions video talking about antitrust waivers for airline alliances flying transatlantic flights. In recent waiver applications, the ability to compete with other airline alliance conglomerates that have received antitrust exceptions is the justifying reason for requesting an antitrust exception, and that keeps happening until the industry becomes wildly consolidated.

I think our antitrust system should say, while you have a lot of competitors, and under that criteria you would be allowed to merge, but your company revenue/market cap/employee count/majority owner wealth is too high to be eligible to merge. You’re sufficiently large and prosperous, there is no need to grow your company larger through M&A. If you don’t like the business environment you are in, change your operations. You have the money to pursue your goals.

>but your company revenue/market cap/employee count/majority owner wealth is too high to be eligible to merge

Can you posit numbers for these 4 figures (although I don't know how you could calculate "majority owner wealth" when the majority owner is usually 401Ks and pension funds)? Also, if the goal is to stop a business from getting "bigger", then shouldn't there be a strict cap on the measures, rather than just preventing mergers?

If 1M employees is too many, then the business simply should not be allowed to hire more. If $x market cap is too high, then the business should be forced to issue dividends. If the revenue is too high, then it should be forced to stop selling whatever it is selling once it reaches that revenue.

I didn’t intend to flesh out these details thoroughly, but present the idea in spirit, so I wouldn’t be surprised if it needs tweaking as you mention.

> People don’t like the politics of Paramount’s ownership but from a competition perspective this is the better outcome.

This was a much more compelling argument 14-odd months ago. People don’t like the politics of Paramount’s ownership because they’re aligned with the authoritarians currently trying to take control of the country - this isn’t a dispute over tax policy.

Yes, it’s a dispute about antitrust policy not tax policy. The criteria for that analysis is consumer surplus, not the political beliefs of the owners.

It’s not a dispute about antitrust policy either, or at least not directly. Paramount has been aggressively reshaping its content to please the current administration for purposes of buying political favor. There’s an antitrust component to that, in that the more properties they acquire, the fewer voices aren’t effectively controlled by the regime, but the opposition to Paramount’s purchasing spree is political and should be properly seen as such.

Well political differences is not a valid reason to block a merger in the US (see TWC and AT&T’s merger in his first term for an example of that strategy failing).

That was part of Paramount’s offer/threat to WBD, though - “the administration likes us.” I agree with you that it’s unlikely to block the merger, but I think saying this is a win for the consumer is ignoring a whole lot of context.

Paramount is the struggling competitor in this equation.

State AGs play a role in anti trust enforcement. So it’s not over yet.

When has a state AG successfully cancelled a merger? Did any state try to prevent Microsoft and Activision's merger?

Kroger/Albertsons Merger (2024-2025), JetBlue/Spirit Merger (2024), Visa/Plaid Merger (2021), "Capture-and-Kill" Ski Resort Acquisition (2021-2022), Hospital Mergers (Various 2024) are a few.

IIRC these also involved the Feds.

When Feds are not involved, its harder for State AGs to win. Not impossible. And they can slow things down / get concessions.

I guess this would qualify as a protrust operation

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