As Ted Sarandos endured hours of questioning from the Senate Judiciary antitrust subcommittee about Netflix’s pending acquisition of Warner Bros., several of the Hollywood guilds raised concerns again with lawmakers regarding any potential sale of the storied studio.
The Directors Guild of America, Producers Guild of America and Writers Guild of America all weighed in on the issue via prepared statements submitted to the subcommittee ahead of Tuesday’s hearing, where Sarandos was grilled on everything from the streamer’s dominance in media to the co-CEO’s recent meeting with President Donald Trump. As one might’ve guessed from their initial reactions to the deal announcement in December, none were a glowing endorsement.
“Both proposed transactions raise significant issues that impact stakeholders across the media sector, including our members,” the DGA’s statement read. As the union’s president Christopher Nolan confirmed to Deadline and other media recently, the statement reiterates that the guild has met with both Netflix and Paramount, which has launched a hostile bid for Warner Bros. Discovery, and while the DGA is still “not taking a formal position on the merger,” leadership felt there were “concerns” to share.
All three guilds largely pointed to the same issues. Namely, the job loss and reduction in competition that are expected with any major media consolidation.
As the PGA warned: “Reduced competition results in lower compensation and fewer opportunities for producers, creators, and other workers. And when a smaller number of companies control what gets made and what gets seen, fewer ideas reach the public.”
The PGA had some specific (but also still a little vague) asks for the antitrust subcommittee, urging lawmakers to secure guarantees for an increase in domestic production, minimum 45-60 day theatrical windows, a “meaningful” percentage of productions from independent producers and third parties, and “strong pro-competitive and pro-free speech conditions.”
The WGA East and West submitted the most scathing and detailed of the prepared statements, laying out over multiple pages why the writers guild believes that any acquisition of Warner Bros. by a rival “will harm workers, consumers, and competition in the media industry.” The joint statement also argued that the “existing level of consolidation and vertical integration in the media industry is already unacceptable and demands scrutiny.”
In addition to scrutinizing and, in an ideal world, blocking the deals, the WGA called on lawmakers to “explore creative solutions” to address the existing problems in the media industry including limits on the ability of streaming services to own the content on their platforms.
“Failing to act will allow streaming services to dictate what stories are told, and permit media conglomerates to exercise their economic power as political power,” the WGA added.
Pretty much the entirety of the guilds’ concerns can be summed up via a list of nine questions that the DGA urged lawmakers to ask of the prospective buyers and antitrust regulators regarding any sale of Warner Bros:
1. How will the sale affect audiences: what stories consumers get to see, where they can watch them, and at what price and over what timeframe they will be available?
2. How might merger conditions protect consumers, American workers, and the American communities that depend on film and television production if the buyer maintains and operates WBD’s divisions independently following the acquisition?
3. How might merger conditions protect consumers, American workers, and the American communities that depend on film and television production if the buyer must continue to commission, license, distribute, and market films and television from third-party producers at current levels?
4. How might merger conditions protect consumers, American workers, and the American communities that depend on film and television production if WBD’s divisions continue to produce film and television for third-parties after the sale at current levels?
5. How might merger conditions protect the communal experience of watching movies in theaters and the moviegoing experience as a vital community hub and means of strengthening neighborhood connections if the buyer must commit to a significant theatrical exhibition window?
6. How might the marketplace benefit if the buyer must develop, as other media companies currently maintain, the capacity to negotiate and price internal licenses at fair market values as if negotiations were happening at arms-length between competitors?
7. If WBD’s news and sports divisions remain part of the combined company, how should collective bargaining rights be protected in the new entity?
8. What conditions might mitigate the likelihood of the buyer looking to offshore production to reduce costs, especially to relieve debt?
9. How will the sale affect the pipeline for workforce training programs and small- and mid- size productions that train the next generation of filmmakers?
