In a move that has sent shockwaves through Hollywood, Netflix recently announced its plans to acquire Warner Bros. Discovery (WBD) for $82.7 billion. Responses from the industry have been generally negative, sparking concern about the acquisition’s implications for jobs, the future of theatrical releases, and the representation of diverse voices in film and TV.
Netflix co-CEOs Greg Peters and Ted Sarandos have sought to address fears surrounding the deal in a letter to employees, which was made public by Bloomberg on Monday.
The executives reassured staff of their commitment to maintaining theatrical releases for WBD films. They also asserted that there will be “no overlap or studio closures.”
The co-CEOs further stated that the “deal is about growth” and that the company is “strengthening one of Hollywood’s most iconic studios, supporting jobs, and ensuring a healthy future for film and TV production.”
Despite these assurances, the Writers Guild of America (WGA) has emerged as a vocal opponent of the acquisition, arguing that it violates antitrust laws designed to prevent monopolies.
Additionally, the deal has attracted the attention of lawmakers. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal submitted a letter to the Justice Department Antitrust Division expressing their concerns about the potential implications of a massive merger in the entertainment industry.
The senators argue that, in addition to raising ethical questions, the newly merged media giant would possess “more market power than the current companies to raise consumers’ television costs,” especially at a time when middle-class families are already facing rising prices. Notably, Netflix raised its subscription prices last January.
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To counter monopoly concerns, Peters and Sarandos cited Nielsen data in their letter reportedly showing that combining Netflix and WBD would result in a smaller viewership share than YouTube currently holds, or what a competing Paramount-WBD merger would create.
The letter comes on the heels of Paramount making a competing $108.4 billion offer to acquire WBD, signaling that the competition for media dominance is far from over. Paramount was previously viewed as the main contender; however, CNBC reported that WBD’s board rejected the terms of the offer.
