Netflix’s attempt to acquire Warner Bros Discovery in a landmark $72 billion transaction is increasingly facing political and regulatory turbulence, triggering a wave of price target cuts on Wall Street. As President Donald Trump publicly questioned the deal’s implications for market concentration, the probability of a lengthy antitrust review—and potentially a blocked merger—has risen sharply. This shift in sentiment underscores the fragility of megadeals in a climate where media consolidation, consumer pricing power and political influence are under heightened scrutiny.

Regulatory Headwinds Intensify as Trump Signals Direct Involvement

Speaking at the Kennedy Center, President Trump warned that the combined streaming giant’s enlarged market share “could be a problem”—a comment that instantly rattled investor confidence. His public indication that he will be “involved” in the decision adds a political dimension that complicates what was already expected to be an exhaustive Department of Justice review.

Markets reacted swiftly. Analysts at multiple brokerages cut their price targets, pulling Netflix’s median target down to $139, according to LSEG data. The rare public intervention by a sitting president highlights how deeply intertwined media power and political narratives have become, particularly when the transaction would create a global streaming footprint exceeding 450 million users.

Netflix, signalling confidence, agreed to pay a hefty $5.8 billion termination fee if the deal is blocked. But that very figure reflects management’s awareness of the extraordinary regulatory risk.

Antitrust Case Likely to Test Boundaries of Market Definition

Netflix’s central argument will be that the competitive landscape is far broader than traditional streaming services. By pointing to YouTube and TikTok—platforms with massive user engagement and growing ad revenue—the company will seek to redefine what constitutes the “online video market.” If regulators accept this framing, Netflix’s market share appears far less dominant. If they do not, the deal could emerge as the first major test of streaming-era antitrust enforcement.

Rosenblatt’s Barton Crockett warned that the process is likely to “stall consummation of the deal for a couple of years,” introducing material uncertainty around completion. The political context is further complicated by rival bidder Paramount Skydance, whose leadership has ties to Trump. After Warner Bros Discovery rejected their offer in favor of Netflix, some analysts believe the administration may apply stricter scrutiny as a result.

Unions and Industry Critics Highlight Broader Structural Risks

Hollywood labor unions—already bruised by consolidation and automation pressures—argue that combining Netflix with Warner Bros could suppress film output and raise costs for consumers. Their concerns mirror broader anxieties about how streaming dominance influences wages, production budgets and cultural diversity.

While Netflix remains adamant that the merger will broaden consumer access and reduce backend costs, lawmakers on both sides of the aisle have questioned whether such scale ultimately benefits the public.

Looking Ahead

As the review process unfolds, investors must prepare for a lengthy period of uncertainty. The merger could reshape global entertainment if approved, but the political and regulatory obstacles are now significant enough to alter expected timelines, synergies and financial assumptions.