Senate Antitrust Panel Chair Mike Lee sent a formal letter to the Federal Trade Commission questioning whether Netflix’s proposed $72 billion acquisition of Warner Bros. Discovery could stifle competition in the streaming market. In his letter, the senator cited Warner’s position as the fourth-largest streaming service globally and warned that combining Netflix’s 325 million-plus subscribers with Warner’s premium content library might create barriers for smaller rivals. Lee has requested detailed market-share analyses, subscriber overlap data and projections of potential impacts on licensing fees by February 15, placing additional scrutiny on the deal’s timeline.

Netflix reported fourth-quarter results with global memberships surpassing 325 million, marking a year-over-year increase of 7 percent. Advertising revenues more than doubled to $1.5 billion in 2025, following a similar doubling in 2024, driven by the company’s low-cost, ad-supported tier. Management guidance for 2026 anticipates ad revenues to grow by another 100 percent and overall revenue to expand by double-digit percentages, underpinned by continuing margin improvement driven by content cost leverage and operational efficiencies.

Despite executive confidence that the deal will enhance Netflix’s content library and subscriber appeal, regulators in the U.S. and Europe are conducting in-depth reviews. Competition authorities have expressed concern that the combined entity would control rights to major franchises such as Harry Potter, DC Comics and Game of Thrones, potentially limiting rival platforms’ access to high-value titles. Legal experts estimate the review process could extend into late 2026, delaying expected synergies and leaving investors exposed to announcement risk throughout the year.

Netflix shares have slid more than 8 percent year-to-date following a six-session downturn linked to acquisition uncertainty, despite the company’s robust fundamentals. At a forward price-to-earnings multiple near 26.6 based on consensus analyst earnings per share of $3.12 for 2026, Netflix trades below the broader technology sector average. Wall Street strategists note that even if the Warner deal stalls, the core streaming business—with its record subscriber base, accelerating ad revenues and content spending discipline—could drive a potential 20 percent upside if growth forecasts materialize.