Sen. Adam Schiff (D-CA) and Rep. Laura Friedman (D-CA) are calling on Netflix and Paramount to make “concrete commitments” to preserve film and TV jobs with an acquisition of Warner Bros.
The two lawmakers wrote a letter to Netflix co-CEOs Ted Sarandos and Greg Peters, and Paramount CEO David Ellison, asking for “concrete steps will you take to preserve and expand good-paying film and
television jobs in Los Angeles.”
“Furthermore, given the importance of the outcome of a WBD acquisition, said concrete commitments should be accompanied by measurable actions so that California and Hollywood continue to serve as the global center of storytelling, innovation, and creative employment,” they wrote.
Among other things, the lawmakers are asking how the companies will work “in good faith to bargain with unions representing the thousands of entertainment employees, and to growing that workforce.” They also want to know how they will use AI in a way “that does not displace workers.”
They also are seeking commitments “under the current tax system to end the ongoing offshoring of production and return production to the United States.” The lawmakers cited work on legislation to establish a federal film tax incentive, as production has migrated to other countries offering an array of generous breaks to lure movies and TV shows.
The Justice Department is reviewing Netflix’s proposed acquisition of Warner Bros., HBO and HBO Max, with parent Warner Bros. Discovery planning to spin off its cable assets, like CNN and TNT, into a separate company. Paramount has been engaged in a hostile bid for all of WBD, after previous offers were rejected by the board. The DOJ also is looking at Paramount’s proposal.
The Schiff-Friedman letter cited the companies’ plans for cost savings following the merger.
They wrote, “Both companies’ proposed cuts following an acquisition are extremely concerning: Paramount is projecting to cut $6 billion in expenses over three years and Netflix is projecting to cut $2 – $3 billion. Specifically, analysts predict that many of these savings will be accomplished through significant job loss.”
Schiff brought some of the issues up when Sarandos testifed earlier this week before the Senate Judiciary antitrust subcommittee.
At the hearing, Sarandos called the Netflix acquisition “pro competitive.” He said that they “intend to keep these operating entities operating exactly as they are today, with independent creative groups who do that buying meaning.” In written testimony, he said that Netflix is “doubling down even as much of the industry has pulled back. With this deal, we’re going to increase, not reduce, production investments going forward, supported by a stronger combined business and balance sheet.”
Netflix has said that the $2 billion to $3 billion in cost savings will primarily come from administrative expenses and removing duplicative back-end tech systems, not expected to be realized until the third year after the merger.
A Paramount spokesperson did not immediately return a request for comment. In an open letter to the UK creative community this week, Ellison committed to increased creative output, among other things. He wrote that they “believe the creative community and audiences are best served by greater choice—not less—and by a marketplace that encourages the full spectrum of filmmaking, content creation, and theatrical exhibition, not one that eliminates meaningful competition by creating a monopolistic or dominant entity.”
