Last year, entertainment companies Warner Bros. and Discovery merged to create Warner Bros. Discovery, or WBD. Pretty quickly, new CEO David Zaslav made some pretty controversial moves, including removing shows like Westworld from HBO Max and canceling movies like Batgirl, which was basically ready for release.
At the time, the merger went through without the federal government worrying itself, but in light of these controversial moves, four Democratic lawmakers — Sen. Elizabeth Warren (D-CA), Rep. Joaquin Castro (D-TX), Rep. David Cicilline (D-RI) and Rep. Pramila Jayapal (D-WA) — wrote a letter to Attorney General Merrick Garland and DOJ antitrust chief Jonathan Kanter calling for action.
Per Deadline, The lawmakers write that the merger “appears to have enabled” WBD to “adopt potentially anticompetitive practices that reduce consumer choice and harm workers in affected labor markets…The company has the incentive and ability to eliminate broad swaths of its workforce, leaving workers with fewer choices for employment and advancement.” They also cited layoffs, cuts at CNN, cuts in areas like ad sales and the shutdown of CNN+.
Lawmakers argue that Warner Bros. Discovery merger has led to “hollowing out” of “iconic American studio”
The letter argues that the merger is “hollowing out” an “iconic American studio,” pointing out that “audiences will never see such projects like Batgirl, a $90 million film that was canceled while ‘deep into post-production,’ despite consumer outcry, reportedly to allow WBD to claim a tax break.”
"Currently, the plan for the combined streaming service is to keep an ad-supported plan at ten dollars and an ad-free plan between $15 and $16 a month. However, WBD is offering a premium plan for consumers that will cost $20 a month ‘for viewers who want to view HBO’s signature shows in as high a quality as possible.’ This leaves questions unanswered about whether a lower-priced platform will have reduced quality from the current product, while consumers are paying the same price and lack the transparency necessary to fully evaluate the plans and their relative prices."
The Justice Department generally wouldn’t reopen a review of a merger after it’s been completed, but the lawmakers have been encouraged by Kanter’s recent comments about the DOJ being concerned about the impact of consolidation on content creators and workers, not just consumers. Last year, the Justice Department successfully challenged a proposed merger between Penguin Random House and Simon & Schuster, arguing that it would harm authors.
If the DOJ wants to take this seriously, they have a huge job ahead of them, because the entertainment industry has been consolidating like crazy recently, as have many industries. Disney is Patient Zero for this, having acquired Pixar, Marvel Studios, Lucasfilm and finally 20th Century Fox over the past 20 years. In the world of video games, Microsoft’s attempts to buy mega-publisher Activision has attracted a lot of attention lately. There are good arguments that these kinds of mergers are bad for both employees and customers, but doing something about them is a whole other issue.
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