Inside the Capitol Building on Tuesday during Ted Sarandos’ appearance before the U.S. Senate’s antitrust subcommittee sat the Monopoly man, complete with a white mustache, top hat and red bowtie. The message, shared by some consumers and large swaths of Hollywood, to lawmakers was unmistakable: Netflix is poised to become an entertainment behemoth if it’s allowed to complete a $82.7 billion deal for Warner Bros. and HBO.

Just ahead of him was a cadre of Warner Bros. Discovery executives and lawyers in attendance to observe Sarandos’ testimony on the impact of the merger. The battle for the company will almost surely be fought in court, but the hearing turned into something of a legal session, with both Democratic and Republican senators pressing the executive on finer points of the acquisition as they relate to antitrust laws. Of specific interest was the market Netflix operates in, who it competes against and concerns that another media megamerger could undercut labor — key issues that may decide the fate of the deal if the Justice Department sues.

Sarandos appeared confident but friendly and answered questions directly, though he hedged when asked whether he would commit to restoring “full residuals.”

“It’s a very complicated answer,” Sarandos replied. His performance saw Netflix stock remain relatively flat as it continues to decline since the announcement of the deal.

He pushed a narrative that Netflix buying Warner Bros. will help save a storied Hollywood studio from the “deep-pocked tech companies trying to run away with the TV business.” Those tech firms, he said, are Netflix’s true competitors, name-checking YouTube at several points during his testimony. “YouTube is not just cat videos anymore,” he explained. “YouTube is TV.”

That message was echoed by Warner Bros. Discovery chief revenue officer Bruce Campbell, who went a step further in arguing that Netflix can’t be pigeonholed to film and TV. “Consumers are experiencing a flood of options, including expanded social media platforms, digital and interactive games, and dozens of other entertainment options that compete for consumers’ interest and attention,” he said in his opening remarks.

Sen. Mike Lee (R-UT), chairman of the subcommittee, immediately zeroed in on the issue, saying that YouTube doesn’t produce original content and that the Google-owned company is “not in the same business.”

“They are a subscription service that has ad free and subscriptions options. It’s the exact same content,” Sarandos replied. “When we talk about competition, we’re competing for the same viewers, the same ad dollars and, sometimes, it’s the exact same programming.” The executive referenced the box office success of indie pic Iron Lung from Mark Fischbach (aka Markiplier) of YouTube gaming fame. The movie made nearly $17.9 million domestically and $21 million globally over the Jan. 30-Feb. 1 weekend.

“I’m struggling to grasp how it’s the same exact content,” Lee replied.

Sarandos didn’t back down, responding that half of all YouTube engagement happens in the living room on the TV. “It’s a zero sum game,” he said. “If you’re watching YouTube, you’re not watching HBO. You’re not watching Netflix.”

If it does get to court, the biggest battleground will be defining the market in which Netflix is a competitor. The company will look to define it as broadly as possible, likely arguing that it competes against the YouTubes and TikToks of the world. By Netflix’s thinking, it’s a competition for time and attention rather than for viewers solely looking to watch movies and TV shows.

The Justice Department, meanwhile, will look to keep the confines of the fight to streaming. A Netflix, Warner Bros. Discovery rollup would give the combined company more than 30 percent of the streaming market according to some measures, a key threshold typically viewed as problematic under antitrust law. Still, it’s a far cry from the 50 percent marketshare benchmark that triggers a presumption of monopoly power by the courts.

At several points in the hearing, Sarandos stressed that Netflix has roughly 9 percent of total TV viewing, behind YouTube and Disney. Sen. Ted Cruz (R-TX) challenged the assertion. “That’s defining the market how you want,” he said. “In the streaming market, what percent do you have of the market.”

Sarandos shot back, “For us, that would be a fantasy construct.”

When only including streaming services, Netflix accounts for roughly 19 percent of viewing. That figure would increase to around 21 percent if it’s allowed to purchase Warner Bros.

Another avenue the government could pursue to block the deal is a monopsony theory, or whether the combined company would have too much power over creators and talent. Sarandos and Campbell were the only streaming executives who testified, but they were treated as stand-ins for the entire media and entertainment industries, which have seen significant consolidation over the last two decades, slowly whittling away at labor’s leverage.

In a sharp exchange, Sen. Josh Hawley (R-Mo.) asked Sarandos to commit to restoring “full residuals.” Sarandos, appearing slightly flustered, said it’s “very complicated” and that “we prepay,” to which Hawley interjected to say “that’s usually a way of saying no.”

Netflix said in a statement it already pays residuals. “According to the WGA, residuals have reached an all time high of $493.9M (up 5% from ‘20 to ‘23) — streaming accounts for ~45%, of which the lions’ share comes from Netflix,” it said.

Sen. Peter Welch (D-VT) pressed Sarandos, who committed to a 45-day theatrical window, on the fewer paths creators will have for the acquisition of their content with one less company in play.

Sarandos said Netflix has multiple purchasing arms within the company, including for family, comedy and drama content. “You can pitch to all three teams,” he explained. “One may pass and one may take it.” If the deal is greenlit, the executive said buying entities within Warner Bros. and Netflix will remain independent.

Some of the most aggressive questions came from Sen. Eric Schmitt (R-MO), who pressed Sarandos and Campbell on the companies “promoting DEI and wokeness” while pointing to content that portray vikings and Cleopatra as Black — content that some conservatives have used as examples of Hollywood pushing a political agenda. “Why in the world would we give the seal of approval to make you the largest behemoth in the planet related to content,” he said. “It seems as though you’ve engaged in not only creating content but the wokest content in the history of the world.”

Sarandos asserted that Netflix caters to all viewers, who are an even 40% split of conservatives and liberals.

One notable person absent from the hearing: Paramount CEO David Ellison, who met with lawmakers privately but declined to make an appearance as he pursues a hostile bid for all of Warner Bros. Discovery, according to Booker. The lawmaker said he has “serious concerns” with Paramount’s involvement in the deal due to allegations of “political favoritism” by President Donald Trump.

“Does that strike you as improper,” Booker asked Campbell, referencing Ellison’s meeting with Trump, after which a deal was reached to resolve a lawsuit over a 60 Minutes interview with former vice president Kamala Harris.

“It was unusual, yes,” Campbell said.