In a move that sent shock waves across Hollywood, Netflix recently announced plans to acquire Warner Bros. Discovery (WBD) for $82.7 billion. Reaction from the industry has been generally negative, raising concerns about the acquisition’s impact on jobs, the future of theatrical releases, and the representation of diverse voices in film and television.
Netflix co-CEOs Greg Peters and Ted Sarandos sought to address concerns surrounding the deal in a letter to employees, which was published by Bloomberg on Monday.
Executives reaffirmed staff’s determination to keep WBD movies in theaters. They also claimed that “there will be no duplication or studio closures.”
Additionally, the co-CEOs said the deal is “about growth” and that the company will “strengthen one of Hollywood’s most iconic studios, support jobs and ensure a healthy future for film and television production.”
Despite these assurances, the Writers Guild of America (WGA) has emerged as a vocal opponent of the deal, arguing that it violates antitrust laws meant to prevent monopolies.
Additionally, the agreement has attracted the attention of lawmakers. Sens. Elizabeth Warren, Bernie Sanders, and Richard Blumenthal have submitted a letter to the Justice Department’s Antitrust Division expressing concerns about the potential impact of large-scale mergers in the entertainment industry.
In addition to raising ethical questions, the senators argue that the newly combined media giants will have “greater market power than incumbent companies to drive up the price of TV for consumers,” especially at a time when middle-class households are already facing rising TV prices. Notably, Netflix increased its subscription prices in January of last year.
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To counter monopoly concerns, Peters and Sarandos cited Nielsen data in their letter that reportedly shows that combining Netflix and WBD would result in a smaller viewership share than YouTube currently holds, or what a merger between rivals Paramount and WBD would produce.
The letter comes shortly after Paramount made a competing $108.4 billion takeover offer to acquire WBD, suggesting the race for control of the media is far from over. Paramount was previously considered a leading contender. However, CNBC reported that WBD’s board rejected the terms of the offer.
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