Netflix Inc. and Warner Bros. Discovery Inc. faced a skeptical Senate panel Tuesday as their executives defended their $82.7 billion media merger against lawmakers’ concerns about the proposed tie-up and its impact on streaming consumers and Hollywood workers.

“We will give consumers more content for less,” Netflix co-Chief Executive Officer Ted Sarandos told the Senate’s antitrust subcommittee, adding that the combination would help improve distribution of Warner Bros.’ iconic films.

About 80% of subscribers to Warner Bros.’s HBOMax also subscribe to Netflix, he said, making the point that consumers often subscribe to multiple streaming services. Combining Netflix and Warner Bros. would account for only about 10% of viewing time, Sarandos said, a market led by Alphabet Inc.’s YouTube. The deal will give Netflix a larger library to compete with Big Tech rivals like Amazon.com Inc.’s Prime and Apple Inc.’s Apple+, he said.

Sarandos was responding to questions from Senator Mike Lee, the Utah Republican chairing the hearing, who said the deal raises “numerous antitrust concerns,” pointing to how Netflix and Warner Bros. compete to offer streaming content and for labor. Netflix would also have an incentive to release content directly to streaming, harming movie theaters, he said.

Netflix seeks to become “one platform to rule them all,” Lee said.

Both the US Justice Department and Europe’s antitrust watchdog, the European Commission, are reviewing the Netflix-Warner Bros. transaction for antitrust concerns. Various state attorneys general, including California, are also expected to review the deal.

Sarandos said he does not believe the companies need to sell any assets in order to pass muster with antitrust regulators, but said that decision would ultimately be up to the Justice Department, with whom the company has been engaged in discussions.

The Netflix executive also faced questions from New Jersey’s Cory Booker, the panel’s top Democrat, about the company’s discussions with President Donald Trump.

Sarandos acknowledged meeting multiple times with the president but said they only discussed the deal at a high level.

Trump is “very concerned about protecting American jobs and American industry,” he said, but demurred on whether Trump will personally be involved in the antitrust review.

Trump meetings

Trump has raised concerns about the deal, while also praising Netflix and Sarandos. When asked about the meeting with Sarandos, Trump said the transaction would have to “go through a process” and that the combination creates a company with “a big market share. It could be a problem.” He added that he would be personally involved in the decision-making process.

Bruce Campbell, Warner Bros. chief strategy officer, said the company determined it would be best to separate the movie studio from the television business. Campbell said Netflix’s offer allows Warner Bros. to expand its distribution while spinning out the company’s sports and news assets.

“The abundance of streaming options has made it harder for Americans to find the content they want,” he said.

Rival bidder Paramount Skydance Corp. opted not to appear at the hearing after the company’s chairman and chief executive officer, David Ellison, turned down an invitation to testify last week.

Booker said he was frustrated that Paramount’s Ellison declined to testify at the hearing, though he acknowledged the CEO had met privately with him to discuss the deal.

The acquisition of Warner Bros. “by anyone would increase control over what we hear, what we see and what we consume,” Booker said.

Entertainment industry

The battle for Warner Bros., known for films from Casablanca to Batman, is one of the biggest media deals in years and stands to reshape the entertainment industry.

In a Jan. 22 letter, Lee suggested Netflix was using what is expected to be a lengthy antitrust review as a way to weaken a competitor.

Lee pressed Sarandos on whether Netflix truly does compete with YouTube, saying the two services offer different types of content and while the former is a paid service, YouTube is free.

“It’s a zero-sum game,” Sarandos said, referring to Netflix competing for viewers with various content providers. Netflix is “competing for the moment of choice, it’s competing for viewers’ attention.”

In response to a question from Senator Adam Schiff, a Democrat from California, Campbell said that consumer prices won’t go up and people won’t lose jobs.

Ellison, who is the son of tech billionaire and Trump supporter Larry Ellison, told the committee in a letter he didn’t think his testimony would be useful because Warner Bros. had rejected their multiple offers, Bloomberg reported. He offered to submit written testimony and to appear before the panel if the Netflix deal isn’t completed and Paramount’s offer advances.

(With assistance from Kelcee Griffis and Hannah Miller.)

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