Netflix announced on Friday its acquisition of Warner Bros Discovery's film and TV studios business for 72 billion US dollars, immediately triggering fierce opposition from major US labor unions who warn the merger would eliminate jobs, suppress wages, and harm consumers.
The Writers Guild of America West and Writers Guild of America East issued a joint statement demanding regulators block the deal. They argued: «The world's largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent. The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers.»
The unions emphasized that entertainment workers and the public already suffer from «only a few powerful companies maintaining tight control over what consumers can watch on television, on streaming, and in theatres.» They concluded: «This merger must be blocked.»
What Netflix is acquiring
The deal brings Warner Bros' 102-year-old studio and streaming operations under Netflix's control, including HBO, HBO Max, and valuable franchises like Harry Potter, Batman, the DC Universe, and hit series including Game of Thrones, Friends, and The Sopranos.
Netflix will pay 27.75 dollars per share to Warner Bros Discovery investors. The acquisition excludes cable networks like CNN, TBS, and TNT Sports, which Warner Bros Discovery plans to spin off before the deal closes.
Ted Sarandos, Netflix's co-chief executive, said: «By combining Warner Bros' incredible library of shows and movies, from timeless classics like Casablanca and Citizen Kane to modern favourites like Harry Potter and Friends, with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we'll be able to do that even better.»
David Zaslav, Warner Bros Discovery's president and chief executive, stated: «Today's announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most.»
Theatrical release concerns
The merger raises critical questions about the future of cinema releases. Michael O'Leary, president and CEO of Cinema United, called the deal «an unprecedented threat to the global exhibition business.» He demanded: «Regulators must look closely at the specifics of this proposed transaction and understand the negative impact it will have on consumers, exhibition and the entertainment industry.»
Sarandos indicated Netflix would «continue to support» a «life cycle that starts in the movie theater» for Warner Bros films, but questioned whether «long exclusive windows» were consumer-friendly. Warner Bros currently has three of the top five domestic earning films and multiple major releases scheduled through 2027, including Wuthering Heights and Dune: Part Three.
UK union response
Cathy Sweet, head of TV and film at Equity, the UK's performing arts union, took a more measured stance. She said: «While company ownership shifts, Equity contracts which underpin the pay, conditions and secondary payments for our members, endure. We welcome the commitment to maintaining cinema theatre releases and the commitment to invest in original content, which must be a positive step for jobs and pay for performers and all in the entertainment industry.»
Regulatory scrutiny ahead
The deal faces significant regulatory hurdles in both the US and Europe and is not expected to close until at least the third quarter of next year. Warner Bros Discovery must first complete its planned spin-off of cable operations.
Danni Hewson, head of financial analysis at AJ Bell, noted: «Splashing out so much cash was never going to make the share price jump with delight, but if this deal can clear those significant regulatory hurdles quickly there are likely to be considerable cost savings to be made.» She added that scrutiny would focus on «how much of those savings get passed to streaming platform subscribers or whether Netflix will be seen to have too much pricing power.»
Netflix shares declined slightly following the announcement. The streaming giant, which has approximately 302 million subscribers worldwide, stated the acquisition would provide «even more high-quality titles from which to choose» and help «optimize its plans for consumers.»
Note: This article was created with Artificial Intelligence (AI).
