In a move that has shocked Hollywood, Netflix recently announced plans to acquire Warner Bros. Discovery (WBD) vs. $82.7 billion. Responses from the industry were generally negative, sparking concerns about the takeover’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 fears surrounding the deal in a letter to employees, which was made public by Bloomberg on Monday.
Executives assured staff of their commitment to maintaining theatrical releases for WBD films. They also claimed that there would be “no overlapping or studio closures”.
The co-CEOs further stated that “the deal is about growth” and that the company “strengthens one of Hollywood’s most iconic studios, supports jobs and ensures 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 takeover, arguing that it violates antitrust laws designed to prevent monopolies.
In addition, the deal has attracted the attention of lawmakers. Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal submitted a letter to the Department of Justice’s Antitrust Division, expressing concerns about the potential effects of a massive merger on the entertainment industry.
The senators argue that, in addition to raising ethical questions, the newly merged media giant will have “more market power than today’s companies to drive up the cost of consumer television,” especially at a time when middle-class families are already facing rising prices. In particular, Netflix increased subscription prices last January.
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To address monopoly concerns, Peters and Sarandos cited Nielsen data in their letter that allegedly shows a combination of Netflix and WBD would result in a smaller viewership share than YouTube currently holds or what a competitive Paramount-WBD merger would create.
The letter comes as Paramount made a competing bid of $108.4 billion to acquire WBD, signaling that the race for media dominance is far from over. Paramount was previously considered the leading contender. however, CNBC reported that WBD’s board rejected the terms of the offer.
