Ahead of the one-year anniversary of the Warner Bros. Discovery merger, four Democratic lawmakers have called on the Justice Department to investigate the company.
A Letter Sen. Elizabeth Warren (D-Massachusetts), Rep. Joaquin Castro (D-Texas), Rep. David Cicilline (D-Rhode Island) and Rep. Pramila Jayapal (D-Washington) to Attorney General Merrick Garland and Assistant Attorney General Johann Kanter Claims that the merger enabled the company to engage in “potentially anti-competitive practices that reduce consumer choice and harm workers in affected labor markets.”
Discovery closed its $43 billion merger with WarnerMedia in April 2022, which was ultimately not challenged by the DOJ after review.
The letter cites several workforce cuts that have occurred over the past several months as part of a company restructuring, including the layoffs of 350 people at CNN+, an additional 400 people at CNN and 100 people in its advertising sales division . It also claims that WBD’s new ownership is “hollowing out the iconic American studio,” citing the cancellation of various projects including the $90 million “Batgirl,” Gordita Chronicles, “Demimond,” and “The Time Traveler’s Wife.” Giving.
“The loss caused to content creators whose projects are canceled in deep development and post-production cannot be overstated,” the letter said. “Such cancellations taint these projects, making them less attractive and marketable to other buyers—consumers will never be able to see WBD’s canceled shows again. WBD’s conduct actually ‘ ‘catch and kill’ practice, which limits consumer choice to a great extent.
During a media event in January, DC Studios co-chairman and CEO Peter Safran touted the “incredibly talented people in front of and behind the camera” on “Batgirl,” but noted that it “wasn’t relatable.”
“I think Zaslav and the team made a bold and courageous decision to cancel it, because it would hurt DC and those people,” he said.
Additionally, the letter targets the company’s upcoming combination of HBO Max and Discovery+, which the lawmakers said “leaves unanswered questions about whether the lower-priced platform will reduce the quality of the current product — while consumers Paying the same price and lacking the transparency required to fully evaluate the plans and their relative prices.
“With fewer choices available to consumers, there is less competitive pressure on WBD to innovate or provide a variety of quality content,” he added.
WBD is set to hold a special event on April 12 to discuss the details of their new joint offering.
According to Bloomberg, the streamer will continue to charge $15-$16 per month for the ad-free version, up to $20 per month for the new higher-priced tier, which will offer better video quality and other high-end features and a cheaper price tag. , ad-supported tier for $10 per month. The streamer will also add thousands of unscripted reality titles from Discovery at no additional cost to HBO Max subscribers, while Discovery+ will continue as its own separate, lower-cost service.
The restructuring, which the company anticipates will be completed by the end of 2024, is expected to result in a total pre-tax restructuring charge of up to $5.3 billion, which includes up to $3.5 billion in material impairment and development write-offs.
“We respectfully request that the department may take another look at the transaction keeping in view the WBD
post-transaction conduct,” the letter concludes. “We also hope that the competitive consequences resulting from the WarnerMedia-Discovery merger inform updates to the merger guidelines to ensure that the guidelines protect workers in the media, reflect the needs of consumers and content creators and
Entertainment industry.”
The scrutiny around Warner Bros. Discovery comes as Netflix and other streamers are canceling various projects and as Disney is undergoing its own restructuring, which includes plans to help achieve $5.5 billion in cost savings. 7,000 job cuts for.
A spokeswoman for Warner Bros. Discovery declined to comment. Representatives for the Justice Department did not immediately respond to TheWrap’s request for comment.
