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Lawmakers are petitioning the Department of Justice (DOJ) to launch an investigation of the Warner Bros. Discovery merger, alleging it harmed workers and reduced consumer choices. Warner Bros. merged with Discovery Inc in early 2022 to create Warner Bros. Discovery. The merger caused significant changes, including David Zaslav taking over as CEO of the company, James Gunn and Peter Safran being named the co-CEOs of the DC studios division, and HBO Max and Discovery+ being combined. Not all the changes have been well received as the corporate shakeup led to mass layoffs and other cost-cutting measures.
As reported by Deadline, four Democratic lawmakers wrote a letter to the DOJ requesting an investigation of the Warner Bros. Discovery merger. What’s interesting about their petition is that the DOJ did review the merger at the time of its inception and did not object to it. However, the letter argued that the market share of Warner Bros. Discovery has led to it becoming anti-competitive by eliminating the choices it offers to consumers and workers, which would violate anti-trust laws. Check out part of the letter below:
Warner Bros. Discovery’s market share has enabled it to harm workers and heighten barriers to entry in the media and entertainment industry. Protecting competition for workers and consumers is the essence of antitrust law. As Assistant Attorney General Kanter recently noted, ‘antitrust laws apply to transactions that harm content creators and workers.’ We are concerned that the WarnerMedia/Discovery merger has proven to be such a transaction. It has enabled the combined WBD to take aggressive measures, harming workers and creatives in the media and entertainment industry while eliminating the disciplining forces of competition that provide workers with the freedom to change jobs or negotiate for better pay and working conditions. Following the merger, WBD announced numerous labor-force reductions and product cancellations that would limit consumer and worker choice—cancelling several titles, including “Batgirl,” which was deep into post-production, “Gordita Chronicles,” “Demimonde,” and “The Time Traveler’s Wife.”
Why The Warner Bros. Discovery Merger Is Raising Concern
The Warner Bros. Discovery merger has gained a lot of attention over the past year. When Warner Bros. merged with Discovery, it was already a giant in the industry and boasted one of the top film studios in the United States. Merging with Discovery and acquiring countless broadcast channels, including Food Network and Animal Planet, as well as another streaming service, made WBD one of the biggest players in the media and entertainment industry. However, given the state of the economy, things did not go smoothly for the merger.
Zaslav quickly undertook aggressive cost-cutting measures, which included cutting CNN+ and reducing funding for CNN, resulting in close to 1,000 job cuts, with further layoffs following shortly thereafter in other divisions. Additionally, WBD also changed its content strategy by shifting focus to quality above quantity, which led to them canceling numerous film and TV show titles. One of the most shocking cancelations was DC’s Batgirl, which was shelved in post-production with a $90 million budget. HBO Max also increased its Ad-Free monthly subscription plan cost by a dollar, putting the price at a hefty $15.99/month.
These actions have left workers fearful of more layoffs and consumers fearful of rising costs and content cancelations. Now, lawmakers are raising the question of whether WBD should be allowed to do this, given it’s taking over a significant portion of the entertainment industry while cutting its workforce, reducing employment opportunities. Additionally, if no other businesses can compete against this giant, Warner Bros. Discovery’s hefty prices and limited content may be some of the only choices consumers will have in the future. It’s unclear if the DOJ will investigate an already-closed merger, but the letter raises awareness of Warner Bros. Discovery.
Source: Deadline
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