The Netflix and Warner Bros. Discovery deal came together quickly — but its path to regulatory approval may not be so speedy.

Netflix stunned the media industry on Friday when it announced its proposed $72 billion deal to acquire the iconic Warner Bros. film studio and streaming service HBO Max. The combination brings together two of the most popular streaming platforms in the business. Netflix reported 300 million global subscribers as of late 2024, the last time it reported the metric. HBO Max had 128 million customers as of Sept. 30.

Netflix currently claims 46% of mobile app monthly active users in global streaming, according to data from market intelligence firm Sensor Tower. Combined with HBO Max, that share would rise to 56%, it found.

“This deal cements Netflix’s position as the premier streaming service for original content,” according to a research note from analysts at William Blair on Friday.

The size of the deal makes it ripe for scrutiny, from both industry insiders and U.S. lawmakers.

The Trump administration is viewing the merger with “heavy skepticism,” CNBC reported Friday, and Sen. Elizabeth Warren has already called for an antitrust review.

“This deal looks like an anti-monopoly nightmare. A Netflix-Warner Bros. would create one massive media giant with control of close to half of the streaming market — threatening to force Americans into higher subscription prices and fewer choices over what and how they watch, while putting American workers at risk,” Warren, a Democrat from Massachusetts, said in a statement.

The merger would also give Netflix control over the famed Warner Bros. film studio, further consolidating the cinematic space and raising concerns that the number or typical windowing of popular releases could shrink.

It’s typical in the days and weeks following a deal announcement of this scale for interest groups, politicians and corporate competitors to call foul on antitrust grounds.

The Department of Justice is most likely to review the deal, as it has other media mergers in the past, and it could take some time. DOJ reviews can take anywhere from months to more than a year.

Netflix said Friday it expects the transaction to close in 12 to 18 months, after Warner Bros. Discovery spins out its portfolio of cable networks into Discovery Global.

Netflix’s bid won out over competing offers from Paramount Skydance and Comcast.

Analysts at Deutsche Bank and William Blair were at least minimally convinced Friday of the potential for the deal to go through.

“A merger of Warner Bros. Discovery and any of the three bidders would probably succeed, even if the DOJ were to sue to block a proposed combination,” Deutsche Bank analysts wrote in a note on Friday, citing insights from a Department of Justice veteran who the analysts said “does not see any significant antitrust problems with any of the three scenarios.”

“However … we don’t know all of the detailed facts that will be collected and analyzed by the DOJ, nor do we know who the judge hearing the case will be, and both of these factors can have an impact on the outcome,” the Deutsche Bank analysts noted.

Paramount, for its part, has been fanning the flames.

Paramount’s lawyers sent a letter to Warner Bros. Discovery this week, first reported by CNBC, in which it argued the sale process had been rigged in Netflix’s direction. The Wall Street Journal reported that in a separate letter, Paramount said a Netflix transaction would likely “never close” because of regulatory headwinds.

Paramount was the only bidder looking to buy WBD’s massive portfolio of pay-TV networks — and it’s unlikely to walk away from the process quietly.

Paramount’s merger with Skydance was left in limbo for more than a year before it finally won federal approval in July.

The Federal Communications Commission (which is unlikely to review the Netflix-WBD tie-up since it doesn’t involve a broadcaster) signed off on the $8 billion merger shortly after Paramount agreed to pay $16 million to Trump to settle a lawsuit over the editing of a “60 Minutes” interview with former Vice President Kamala Harris. Paramount had also ended its diversity, equity and inclusion policies earlier in the year after the FCC said it would investigate the company over its DEI programs.

In September, the newly combined Paramount Skydance, run by David Ellison, set its sights on Warner Bros. Discovery. The company is now considering whether to take a hostile bid straight to WBD shareholders and try to unseat Netflix as the would-be buyer, CNBC reported Friday.

Ellison’s billionaire father, Oracle co-founder Larry Ellison, is known to be close with Trump.

The argument for whether to clear Netflix’s proposed takeover of Warner Bros. would likely come down to questions around streaming — first, on pricing for consumers, and second, on how to define Netflix’s audience.

The pricing of streaming subscriptions has risen across the board in recent years. In 2022 Netflix instituted a cheaper, ad-supported model after years of resistance in an effort to beckon more customers. The following year, Disney followed with its own more-affordable plan.

Netflix is used to upending the legacy media industry. The company ended its DVD rentals business in 2023 and went all in on streaming. It’s since found massive scale and has taken over the zeitgeist with original series like “Squid Game,” “Wednesday,” “Stranger Things,” and “Bridgerton.”

Its maverick approach to media and its broadening foothold in the industry may be its saving grace in the eyes of regulators.

“My expectation on the regulatory side is Netflix is going to advocate and argue with their advisors for a very expansive definition of what their market is … so that would include broadcast, cable, subscription and ad-supported streaming,” said said Jeff Goldstein, a partner and managing director at AlixPartners, and co-lead of the U.S. Media group.

“And really, really, really importantly, that would include YouTube,” he said.

YouTube has come to dominate the industry when it comes to viewership. Nielsen once again reported in October than YouTube had the largest share of TV usage, with Netflix in sixth place and Warner Bros. Discovery in seventh place. Traditional media companies with linear networks — Disney, NBCUniversal, Fox and Paramount — filled the spots in between.

Critics of the deal will define Netflix’s reach more narrowly to try to demonstrate outsized dominance, said Goldstein.

“I believe that streaming is not a category. Television viewership is a category … you know, eyeballs might be a category,” media industry titan John Malone told CNBC in November when asked about antitrust questions surrounding the WBD sale process.

“But if you’re going to broaden the category to that, you got to take in YouTube and Facebook and the social networks, TikTok,” he said. “I mean, that’s really the question, is streaming a category? … Are studios a category … and is that going to get looked at hard? These regulatory things are a little bit difficult to predict.”

— CNBC’s Julia Boorstin contributed to this report.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.

This isn’t exactly what David Ellison had planned in September.

Just a few months ago, the Paramount Skydance CEO sent a letter to the Warner Bros. Discovery board of directors arguing a combination of the two media and entertainment companies made sense. That letter was the first of several that offered increasingly higher prices to acquire the company along with arguments of why the assets were better together.

Paramount’s interest spurred a formal sale process — bringing Comcast and Netflix into the mix — which ultimately doubled the value of Warner Bros. Discovery shares and culminated, at least for the moment, in Paramount losing out in the bidding war it started.

On Friday, Netflix announced a deal to acquire HBO Max and the famed Warner Bros. film studio for $27.75 per share, or an equity value of $72 billion. WBD will move forward with a plan to separate out its pay-TV networks, such as CNN and TNT Sports, before the deal closes.

Instead of supercharging Paramount, just months after gaining control of the company through a merger with Skydance, Ellison effectively handed a prized jewel of the media and entertainment industry to its most dominant player, strengthening Netflix’s reach and stripping Paramount and Comcast’s NBCUniversal of an obvious merger target.

“It wasn’t for sale before, and they certainly hadn’t cleaned up the assets or separated the assets in the way they have right now,” said Netflix co-CEO Ted Sarandos in a conference call Friday morning after announcing the deal. “I think that kind of goes to the ‘why now.'”

Ellison jump-started a process that has made a lot of money for Warner Bros. Discovery CEO David Zaslav, WBD’s executive team and its shareholders.

Ellison has wasted no time at the helm of Paramount Skydance, transforming the company through deals and acquisitions.

Since the merger closed in August, Paramount has brought on C-suite executives and high-profile Hollywood talent such as the Duffer Brothers. It secured the rights to develop a live-action feature film based on Activision’s Call of Duty video game franchise and struck a $7.7 billion deal for UFC rights.

Ellison’s hunt for Warner Bros. Discovery was his biggest endeavor since taking control of the company.

Paramount’s lawyers sent a letter to Warner Bros. Discovery this week, first reported by CNBC, claiming the sale process had been rigged in Netflix’s direction. Paramount has accused Warner Bros. Discovery of failing to properly consider its offer of $30, all-cash, and instead selling to Netflix as a predetermined outcome.

Netflix made an initial bid for WBD’s studio and streaming assets of $27 a share, according to a person familiar with the matter. That trumped Paramount’s offer at the time and turned the trajectory of the sales talks in Netflix’s direction, said the person, who asked not to be named because the discussions were private.

Paramount was the only bidder interested in acquiring all of WBD’s assets — the film studio, streaming service and TV networks. It has maintained that its offer is superior.

Paramount’s executives and advisors valued the Discovery Global networks portfolio at close to $2 a share, based on its predicted trading multiple and estimated leverage ratio, according to people familiar with the matter, who asked not to be named because the discussions were private. Discovery Global would include the CNN, TNT Sports and Discovery channels.

Warner Bros. Discovery believes Discovery Global could have a value of $3 per share or more if it trades well in the public markets, according to other people with direct knowledge of the matter.

Paramount has also argued there are tax efficiencies for shareholders in acquiring the whole company rather than buying only a portion of it, and that Netflix’s bid comes with steeper regulatory risk. The Trump administration’s view of the proposed combination is one of “heavy skepticism,” CNBC reported Friday.

Paramount offered a break-up fee of $5 billion if the proposed deal didn’t get regulatory approval, according to the people familiar.

Netflix’s bid included a $5.8 billion break-up fee in case the deal doesn’t get regulatory approval, according to a Securities and Exchange Commission filing Friday.

Paramount is now weighing its options about whether to go straight to shareholders with one more improved bid — perhaps even higher than the $30-per-share, all-cash offer it submitted to WBD this week.

If it does, Netflix would have a chance to match that bid. The end result would mean even more money for WBD shareholders — and more money for Zaslav.

— CNBC’s Nick Wells contributed to this report.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC. Versant would become the new parent company of CNBC upon Comcast’s planned spinoff of Versant.