Netflix responds to concerns about WBD deal

In a move that has shocked Hollywood, Netflix recently announced its plans to acquire Warner Bros. Entertainment. Discovery (WBD) for $82.7 billion. Industry reaction was generally negative, raising concern about the effects of the takeover on jobs, the future of theatrical releases, and the representation of diverse voices in film and television.

Netflix co-CEOs Greg Peters and Ted Sarandos sought to address concerns surrounding the deal in a letter to employees, which was published by Bloomberg on Monday.

Executives reassured employees of their commitment to maintaining theatrical releases of WBD films. They also confirmed that there will be “no overlap or closure of studios.”

The co-CEOs also stated that “the deal is about growth” and that the company “strengthens one of Hollywood’s most iconic studios, supports jobs, and ensures a healthy future for film and television production.”

Despite these assertions, the Writers Guild of America (WGA) emerged as a strong opponent of the takeover, arguing that it violated antitrust laws designed to prevent monopolies.

In addition, the deal attracted the attention of lawmakers. Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal have submitted a letter to the Justice Department’s Antitrust Division expressing concerns about the potential effects of a mega-merger on the entertainment industry.

The senators claim that the newly combined media giant, in addition to raising ethical questions, will have “greater market power than incumbent companies have to raise the costs of watching television for consumers,” especially at a time when middle-class families are already facing rising prices. It is worth noting that Netflix raised the prices of its subscriptions last January.

To address monopoly concerns, Peters and Sarandos cited Nielsen data in their letter that reportedly shows that the combination of Netflix and WBD would result in a smaller viewership share than what YouTube currently holds, or what the competing Paramount-WBD merger would create.

The letter comes on the heels of Paramount submitting a competing $108.4 billion bid for WBD, suggesting that the competition for media dominance is far from over. Paramount was previously seen as the main contender. However, CNBC reported that WBD’s board of directors rejected the terms of the offer.