Five Lessons for Warner Brothers from a Failed Visa–Plaid Deal: The Warner Bros Board Is Finally Recognizing That the Netflix Merger Is Doomed

After months of tunnel vision on a potential merger with Netflix, Warner Brothers Discovery finally announced last week that it will consider an updated offer from Paramount. Paramount provided that offer yesterday – the highest so far – and Netflix now has a chance to match it.

The announcement signals a major change of heart at Warner Brothers, which previously rejected several Paramount bids, each sweeter than the last, despite mounting concerns that its path forward with Netflix was fraught with regulatory uncertainty. What a difference a federal antitrust inquiry makes.

This month the U.S. Department of Justice launched an investigation into Netflix’s plan to acquire Warner Brothers. Unlike most antitrust reviews that focus narrowly on Section 7 of the Clayton Act, which weighs whether a merger would reduce competition, the DOJ cast a wider net to include Section 2 of the Sherman Act, which prohibits efforts to monopolize an industry.

Read more on National Law Review.