Nearing the one year anniversary of Discovery and AT&T’s WarnerMedia merger, four Democrats in Congress are calling for the Department of Justice to reassess the deal.
In a letter to the Justice Department’s top enforcers, the lawmakers say that the merger has enabled Warner Bros. Discovery to “adopt potentially anticompetitive practices” that prompted numerous layoffs and reduced programming options for consumers. They allege that “current competition in the media and entertainment industry is inadequate.”
Months before the $43 billion deal was blessed, 30 members of Congress warned the agency in a letter in Dec. 2021 that the resulting competition vacuum would harm workers and consumers. Among the concerns they advanced was that it could dampen “economic opportunity for workers” on top of diverse programming, which became a common criticism after the company canned its $90 million HBO Max film Batgirl, the first DC movie led by a Latina, for a tax write-off.
The movie was shelved in the pursuit of $3.5 billion in cost-savings after the company was saddled with more than $50 billion in debt due to the merger. WBD has taken a content and development write-off of $2.8 billion to $3.5 billion, reflecting an additional charge of up to $1 billion more than expected. While the securities filing didn’t indicate what the increased impairments were tied to, the company in the preceding weeks cancelled or pulled from its services several titles that it said would be packed in a bundle to be sold to ad-supported streaming services.
The lawmakers call out “product cancellations that would limit consumer and worker choice,” including the cancellation of Batgirl, which was deep into postproduction, Gordita Chronicles, Demimonde, and The Time Traveler’s Wife. The group also cites WBD abruptly nixing development of Moisés Zamora’s Whistleblower after a “competitive bidding process with multiple outlets.”
“The damage to content creators whose projects are cancelled in deep development and post-production cannot be overstated,’ reads the April 7 letter from Rep. Joaquin Castro, D-Texas, Sen. Elizabeth Warren, D-Mass., Rep. David Cicilline, D-R.I., and Rep. Pramila Jayapal, D-Wash. “Such cancellations stain these projects, making them less appealing and marketable to other buyers — consumers will likely never be able to watch shows purchased then cancelled by WBD. WBD’s conduct amounts to a de facto ‘catch and kill’ practice, vastly limiting consumer choice.”
(Excerpt) Read more in: The Hollywood Reporter