Emily Flippen

Of course, I'm not trying to say that all mega mergers are ending a disaster.

I think Disney's acquisition of 21st Century Fox back in 2019 comes to mind.

The stake they acquired in Hulu has been a great investment.

But in general, M&A is pretty challenging.

Research has suggested that anywhere between 70% to 90% of all mergers fail to achieve their stated goals or generate value for the acquirer's shareholders, which has naturally made Netflix shareholders concerned here.

Dan, when you look across some of these past mega-mergers, are there any patterns that jump out to you or things that make you think that Netflix is or is not repeating history here?

And to your point about the pricing here for Netflix consumers and HBO Max consumers, there's still this big question mark about regulatory scrutiny and whether or not regulators would even allow a deal, regardless of whether or not it's Paramount or Netflix, to move forward.

And this will be interesting.

We haven't had a big litmus test like this for the Trump administration.

So it'll be really interesting to see where regulators fall on this.

But if I'm Netflix, what I'm doing is arguing that a combined Netflix and HBO Max subscription

all under the Netflix umbrella here, would be cheaper to the consumer than paying for two separate streaming services.

Maybe prices go up in general, but I would make the argument that one subscription combining both of these entertainment assets would be cheaper than two.

Of course, we haven't seen Netflix actually signaling this, but I can imagine if

regulators start to dig into the deal, this is the argument Netflix is likely to make.

But Jason, I mean, given the history we've discussed here, when you think about these industry-changing deals, is there any specific warning signs that make you think that Netflix could be the next AOL Time Warner versus the green flags that say this might be closer to a Disney-Fox situation?

It's nice to hear a more positive take, although I will say history does show that mega mergers generally don't live up to the hype, but there are always exceptions to the rules.

Up next, we'll be stepping away from Netflix and Warner Brothers specifically to talk about how you can judge big acquisitions anywhere in your portfolio using this deal as a live case study.

Welcome back to Motley Fool Money.

To wrap up today's show, I want to zoom out and look at mega mergers in general and how investors can think about them within their own portfolios.