The US Department of Justice has launched an investigation into the potential sale of Warner Bros. Discovery Inc. and its impact on theater businesses, amid concerns over the dominance of Netflix in the streaming segment.
The Department of Justice (DOJ) has reportedly summoned several major theater chain owners to assess the impact of the potential sale of Warner Bros. Discovery Inc. (WBD) on the movie-going public and the number of movies released in theaters, Bloomberg reported on Wednesday.
Federal lawyers are trying to gather information on whether the sale would affect the movie-going public or the number of movies released in theaters. The DOJ is primarily concerned with the dominance of Netflix Inc. (NFLX) in the streaming segment, which has made Hollywood jittery due to its policy of showcasing only a handful of movies in theaters for shorter durations.
Netflix: Winner of the Bidding War?
The development comes after Warner Bros. rejected the latest takeover bid of Paramount Skydance (PSKY) and gave it until February 23 to submit its “best and final offer.” Warner Bros. also said that Netflix can match the offer in the meantime.
Analyst Gary Black predicted that Netflix would emerge as the final winner in the bidding war, and that its shares could regain the $100 level even if Paramount wins the bid, Benzinga reported.
As the bidding war gains center stage, the DOJ’s investigation into the potential sale of Warner Bros. Discovery Inc. and its impact on theater businesses is likely to have significant implications for the entertainment industry.
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