Netflix Responds to Concerns About WBD Deal

Netflix's Proposed Acquisition of Warner Bros. Discovery

A recent announcement from Netflix regarding the acquisition of Warner Bros. Discovery (WBD) for $82.7 billion has generated significant reaction within the entertainment industry. Initial responses have largely been unfavorable, raising anxieties about potential job losses, the fate of cinematic releases, and the scope of diverse representation in film and television.

Addressing Employee Concerns

Greg Peters and Ted Sarandos, the co-CEOs of Netflix, have attempted to alleviate these concerns through a letter addressed to employees. This communication, which was published by Bloomberg on Monday, aims to provide clarity regarding the future direction of the combined entity.

The executives emphasized their dedication to continuing theatrical distribution for WBD’s films. They also explicitly stated that there would be “no redundancies or studio shutdowns” as a result of the merger.

Furthermore, the co-CEOs positioned the deal as a catalyst for expansion, asserting that it will “fortify one of Hollywood’s most esteemed studios, safeguard employment, and guarantee a sustainable future for film and television production.”

Opposition from the WGA and Lawmakers

Despite these reassurances, the Writers Guild of America (WGA) has become a prominent critic of the acquisition. The WGA contends that the deal infringes upon antitrust regulations intended to prevent the formation of monopolies.

The proposed merger has also garnered the attention of several members of Congress. Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal jointly submitted a letter to the Justice Department Antitrust Division, voicing their apprehensions about the potential ramifications of such a large-scale consolidation within the entertainment sector.

The senators argue that, beyond ethical considerations, the resulting media conglomerate would wield “increased market influence, potentially leading to higher television costs for consumers,” particularly impacting middle-class households already grappling with inflationary pressures. It is worth noting that Netflix implemented price increases for its subscriptions in January.

Countering Monopoly Arguments

In an effort to dispel concerns about monopolistic practices, Peters and Sarandos referenced Nielsen data in their letter. This data reportedly indicates that the combined Netflix and WBD would command a smaller viewership share than YouTube currently possesses, or a potential merger between Paramount and WBD would generate.

Competing Bids and Future Outlook

This communication follows Paramount’s submission of a competing offer to acquire WBD, valued at $108.4 billion. This development underscores the ongoing competition for dominance in the media landscape. CNBC reported that WBD’s board declined the terms presented by Paramount.

Previously, Paramount was considered the leading contender, but the rejection of their offer suggests that the battle for WBD’s future remains unresolved.