Netflix has proposed an $82.7 billion acquisition of Warner Bros. Discovery, a deal that has prompted opposition from labor groups and scrutiny from U.S. lawmakers over competition, pricing, and employment in the entertainment industry.
Letter to Employees Outlines Netflix’s Position
Netflix co-CEOs Greg Peters and Ted Sarandos addressed internal concerns in a letter to employees that was published by Bloomberg on Monday. In the letter, the executives said Netflix plans to continue theatrical releases for Warner Bros. Discovery films and stated that the transaction would not lead to studio closures or overlapping operations.
They said the proposed acquisition is intended to expand Netflix’s business while maintaining Warner Bros. Discovery’s role as a film and television studio. The executives said the company aims to support existing jobs and continue film and television production.
Union Opposition Raises Antitrust Issues
The Writers Guild of America has opposed the proposed deal, arguing that the acquisition would violate antitrust laws designed to limit consolidation in the media industry.
Lawmakers Call for Regulatory Review
The acquisition has also drawn attention from U.S. lawmakers. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal sent a letter to the Justice Department’s Antitrust Division expressing concern about the effects of a large merger in the entertainment sector. The senators said a combined Netflix and Warner Bros. Discovery could have increased ability to raise television costs for consumers, particularly as household expenses rise. The letter noted that Netflix increased its subscription prices in January.
Viewership Data and Competing Bids
In their letter, Peters and Sarandos cited Nielsen data indicating that a combined Netflix and Warner Bros. Discovery would still have a smaller share of viewership than YouTube. They also said the combined entity would have less share than what could result from a merger between Paramount and Warner Bros. Discovery.
The employee letter followed reports that Paramount made a competing $108.4 billion offer to acquire Warner Bros. Discovery. CNBC reported that Warner Bros. Discovery’s board rejected the proposal, despite Paramount previously being viewed as a leading bidder.
Featured image credits: Pixahive
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