Lawmakers Urge DOJ to Investigate Warner Bros. Discovery Merger

Legislators are calling for the DOJ to initiate an inquiry into the Warner Bros. Discovery merger, claiming that it has had an adverse impact on workers and has reduced the number of consumer options.

Warner Bros. merged with Discovery Inc in early 2022 to form Warner Bros. Discovery, resulting in significant changes, such as the appointment of David Zaslav as CEO, and the selection of James Gunn and Peter Safran as co-CEOs of the DC studios division, as well as the amalgamation of HBO Max and Discovery+.

The reorganization of the company has not been well received and has led to large-scale layoffs and other cost-cutting measures.

As per Deadline’s report, four Democratic legislators penned a letter to the DOJ, urging them to launch a probe into the Warner Bros. Discovery merger. What’s noteworthy about their plea is that the DOJ had previously examined the merger during its initial phase and had found no grounds for opposition.

Nonetheless, the lawmakers contended that the merger has resulted in Warner Bros. Discovery attaining a sizable market share that has made it anti-competitive, limiting options for both consumers and employees, thereby violating anti-trust regulations.

Here’s an excerpt from the letter-

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.

The Lawmakers

Over the last year, the Warner Bros. Discovery merger has been a subject of considerable interest. Prior to merging with Discovery, Warner Bros. was already a behemoth in the industry and had one of the leading film studios in the US.

With the addition of Discovery and its vast array of broadcast channels, such as Food Network and Animal Planet, as well as another streaming service, WBD became one of the largest contenders in the media and entertainment sector. Nevertheless, the state of the economy has made the merger a bumpy ride.

David Zaslav acted swiftly to implement aggressive cost-cutting measures, such as discontinuing CNN+ and reducing funding for CNN. This move resulted in nearly a thousand job losses, with further layoffs taking place shortly thereafter in other departments.

Furthermore, WBD altered its content strategy by prioritizing quality over quantity, leading to the cancellation of numerous film and television titles. One of the most unexpected cancellations was Batgirl, a DC production, which was abandoned during post-production despite having a budget of $90 million.

Additionally, HBO Max raised the cost of its Ad-Free monthly subscription plan by one dollar, bringing the total to a substantial $15.99 per month.

The repercussions of these moves have left employees apprehensive about potential job losses, while consumers are concerned about rising expenses and content cancellations. As a result, legislators are questioning whether WBD, which has a substantial presence in the entertainment industry, should be permitted to take such measures that reduce employment opportunities while dominating the sector.

Moreover, if no other firms can compete with this behemoth, the exorbitant pricing and limited content of Warner Bros. Discovery could potentially become the only choice for consumers in the future. It is uncertain if the DOJ will investigate the already-concluded merger, but the letter has drawn attention to the actions of Warner Bros. Discovery.