On Sunday night, as Donald Trump prepared to host the Kennedy Center Honors, a reporter asked whether Netflix should be allowed to buy Warner Bros., as part of a deal that was announced last week. The president hedged on answering directly, though he said, “I’ll be involved in that decision.”
It didn’t take long for Democratic Sen. Elizabeth Warren of Massachusetts to hit on a key problem. Highlighting the president’s comments, the senator asked, “Is that an open [invitation] for CEOs to curry favor with Trump in exchange for merger approvals? It should be an independent decision by the Department of Justice based on the law and facts.”
Indeed, if recent history is any guide, the president might very well ask for a governmental stake in the merged company as part of the process.
Warren’s point, however, is an important one: There’s no reason for the president to be directly “involved” in the process, especially given the broader context: As MS NOW reported, Paramount is launching a hostile bid to purchase Warner Bros. Discovery, and Paramount’s filing with the Securities and Exchange Commission shows that Trump’s son-in-law Jared Kushner and the nations of Qatar, Saudi Arabia and the United Arab Emirates are helping to finance the deal.
What’s more, CNBC reported that Larry Ellison, the billionaire father of Paramount CEO David Ellison, is close to Trump. Indeed, David Ellison appeared on CNBC and “argued Paramount’s deal will have a shorter regulatory approval process given the company’s smaller size and friendly relationship with the Trump administration.”
On the other hand, The New York Times reported that Netflix CEO Ted Sarandos has been “personally wooing Trump, including at a recent visit to the White House in which he made the case for Netflix’s bid, according to Bloomberg. Sarandos apparently left that meeting convinced that the White House was on board with his bid.”
Trump soon after confirmed meeting with Sarandos, whom he called “fantastic.”
In case this isn’t obvious, at least in the United States, questions surrounding corporate mergers and acquisitions are not supposed to be answered by executives’ proximity to and relationship with the sitting president. And yet, here we are.
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