Netflix announced last week that it would purchase Warner Bros. Discovery in a deal worth $72 billion, raising concerns from consumers, lawmakers, Hollywood unions and movie theater owners. 

Critics of the deal say that Netflix could end up giving movies a smaller theatrical release window, while consumers will have fewer options of what to watch and where. 

But Ted Sarandos, the CEO of Netflix, says that long theatrical windows are not “that consumer friendly.” And if Netflix and HBO Max end up getting combined, consumers might only have to pay for one subscription.

Both companies have a long road ahead of them: Netflix and Warner Bros. are dealing with a hostile takeover bid from Paramount and will face scrutiny from antitrust regulators. For perspective on timing, The Walt Disney Company’s acquisition of 21st Century Fox took 15 months. 

“There are a number of conditions and covenants in the merger agreement that are going to have to be satisfied or waived for closing to occur,” said Caley Petrucci, an associate professor at the University of San Diego School of Law.

Here’s a look at some scenarios that could stop the deal and the likelihood that each will happen. 

Scenario 1: Paramount succeeds in its hostile takeover bid for Warner Bros. 

Warner Bros. Discovery’s board rejected Paramount’s offer to purchase the company, so Paramount has launched a takeover bid by going directly to Warner’s shareholders and offering to buy the company for about $78 billion in all cash — several billion more than Netflix. Unlike Netflix, Paramount also wants to acquire all of Warner’s assets, including cable networks like CNN.

Warner Bros.’ has 10 business days to offer a recommendation on the deal. However, board approval is not required, Petrucci said. 

The odds of shareholders agreeing to sell their shares is hard to say because comparing these deals is like comparing apples and oranges, Petrucci said. While Netflix is offering a lower share price, they’re only seeking Warner Bros.’ streaming and studio operations.

But hostile bids typically don’t succeed, said David King, a management professor at Florida State University. 

“Netflix is a larger company and they can likely outbid Paramount,” King said. 

Paramount is also making a tender offer that asks Warner Bros. shareholders to sell its shares directly to them, King said. A majority of Warner Bros.’ shareholders are institutional investors and they generally vote with their firm’s managers, King explained. 

National security concerns could also play a role in Paramount’s attempted acquisition of Warner Bros, Petrucci said, since its offer is being backed by funding from Abu Dhabi, Qatar and Saudi Arabia. 

The Committee on Foreign Investment in the United States, or CFIUS, reviews transactions involving other countries’ investments in the United States and determines whether they pose security risks. 

“It’s a pretty opaque process. It's a black box, so it's really hard to gauge the risk of CFIUS review, and if that will disrupt or prevent a deal from happening,” Petrucci said. 

Democratic U.S. reps. Sam Liccardo and Ayanna Pressley wrote a letter to Warner Bros. Discovery about the security implications of the deal. 

“It could transfer substantial influence over one of the largest American media companies to foreign-backed financiers,” they wrote, pointing out the wide reach of properties like HBO, Warner Bros. Pictures and CNN. 

CFIUS could recommend to the president that the deal should be blocked. However, Paramount has close ties to the White House. The CEO, David Ellison, is reportedly a friend of President Donald Trump and his father, Larry Ellison, is a major Trump donor. Jared Kushner, Trump’s son-in-law, is also helping to finance the Paramount bid through his investment firm Affinity Partners.

Like the Netflix-Warner Bros. deal, this acquisition would also have to be subject to an antitrust review to determine if it harms competition. 

Scenario 2: Antitrust regulators block the Netflix-Warner Bros. deal 

If the Federal Trade Commission and the Department of Justice think the deal will “substantially lessen competition,” then they can prevent it from going through, Petrucci said. 

“It's not commonly the outcome, but that is certainly a risk with any large transactions,” Petrucci said. 

Regulators from other countries can also review the deal. While it’s unlikely that they’ll be able to stop it, they could influence the terms of the acquisition, King said. 

Antitrust regulators are most concerned with horizontal integration, said Michael Carrier, a professor at Rutgers Law School. That’s when a company acquires or merges with another business at the same level of the supply chain.

When looking at these companies’ streaming platforms, you can view Netflix and HBO Max as horizontal competitors, Carrier said. Some figures say Netflix owns 18% of the market and HBO Max owns 13%.  

“So if you combine them, that's more than 30%, and according to the most recent merger guidelines, if you have 30% of the market and it's going up a fair amount, then that could be viewed as anti-competitive,” Carrier said. 

With increased market power, Netflix could then increase the price of its subscription, Carrier said. 

But it depends how antitrust regulators define the market these companies are operating in, Carrier said. 

“If the market is defined narrowly as subscription streaming, then it could be more likely to be blocked,” Carrier said.

But if antitrust regulators view the market more broadly and include competitors like YouTube and TikTok, then Netflix’s share of the market goes down and the merger has “a very good shot of going through,” Carrier noted. 

Netflix and Warner Bros. could argue that consumers still have more than one option and can choose from Netflix and HBO Max, Carrier said. Netflix has indeed suggested that it will keep its services separate in the near term 

And Netflix could point out that there are strong competitors on the market, including Amazon Prime and Disney, Carrier said. 

If Netflix offers a tiered add-on for HBO Max, it’ll probably be higher than Netflix’s current subscription price, but it will likely be cheaper than owning both, King said. The streaming giant could argue to regulators that it’ll be better for consumers, King said.

And Netflix could say that they don’t have the library that Warner Bros. does, King said. 

Popular Netflix originals like “House of Cards” and “Orange is the New Black” have already ended, while “Stranger Things” is set to end later this year, King pointed out.

Regulators could also raise concern about vertical integration, which is when a company acquires or merges with a company that’s at a different level in the supply chain. Netflix, as a streaming platform, would get control over Warner Bros.’ content and could then keep all of these shows and movies for itself without offering it to other streamers, Carrier said.

Antitrust agencies have typically focused on horizontal antitrust issues, so stopping a deal on grounds of vertical integration would be “an uphill climb,” Carrier said.

Trump, whom the Department of Justice reports to, has also entered the fray and said that the deal “could be a problem” because Netflix has a “big market share.” Presidents usually don’t get involved in deals like these, but they have occasionally in the past, Carrier said. 

Scenario 3: The middle ground: Netflix and Warner Bros. have to agree to concessions

Regulators may not be able to completely halt the deal from going through, but Netflix may have to accept certain conditions. 

When Microsoft tried to close a $69 billion deal with Activision Blizzard, the company had to sell the streaming rights for Activision’s games in order to get approval from regulators in the United Kingdom.

The FTC and Justice Department could make Netflix promise that theatrical releases will not decline further than they otherwise would have, they could require the company to share the Warner Bros. library with other streamers and traditional theaters, or they could make Warner Bros. divest some of its assets, Carrier said. 

“Those sorts of conditions are a middle ground between an outright blocking and allowance of the merger,” Carrier said. 

Scenario 4: A class-action lawsuit halts the deal 

An HBO Max subscriber earlier this week filed a proposed class-action lawsuit attempting to block the deal, arguing that it would reduce competition in the on-demand video subscription market. 

While class-action lawsuits have become increasingly common following an acquisition, they don’t stop deals from happening, King said.