Castro, Warren, Cicilline, Jayapal Urge Department of Justice to Investigate Potentially Anticompetitive Practices at Warner Bros. Discovery
Ahead of One-Year Anniversary of the WarnerMedia/Discovery Merger Consummation, Lawmakers Call for a Post-Merger Review by the Department of Justice
WASHINGTON – Today, ahead of the April 8 anniversary of the WarnerMedia/Discovery merger consummation, Congressman Joaquin Castro (TX-20), Senator Elizabeth Warren (Mass.), Congressman David Cicilline (RI-01), ranking member of the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust, and Congresswoman Pramila Jayapal (WA-07), chairwoman of the Congressional Progressive Caucus, sent a letter urging the Department of Justice to conduct a post-merger review of the transaction following actions by Warner Bros. Discovery (WBD) that have heightened barriers to entry for workers in the media and entertainment industry, hurt competition for industry workers, and reduced choice for media consumers.
“[The WarnerMedia/Discovery merger] has enabled the combined WBD to take aggressive measures, harming workers and creatives in the media and entertainment industry while eliminating the disciplining forces of competition that provide workers with the freedom to change jobs or negotiate for better pay and working conditions…WBD’s aggressive measures post-merger indicate that current competition in the media and entertainment industry is inadequate. The company has the incentive and ability to eliminate broad swaths of its workforce, leaving workers with fewer choices for employment and advancement,” the lawmakers wrote.
“WBD’s new ownership is hollowing out an iconic American studio.…We respectfully request that the Department take another look at the transaction, considering WBD’s post-transaction conduct. We also hope that the competitive consequences resulting from the WarnerMedia-Discovery merger inform updates to the merger guidelines to ensure that the guidelines reflect the needs of workers, consumers, and content creators in the media and entertainment industry,” the lawmakers continued.
To read the full letter, click here.
In May 2021, AT&T and Discovery Inc. announced an agreement to spin WarnerMedia off from AT&T and initiate a merger between WarnerMedia and Discovery to create Warner Bros. Discovery, a new entity. In response, Reps. Castro, Cicilline, and Jayapal and Senator Warren led nearly 30 members of Congress in a letter to the Department of Justice expressing concerns that the proposed merger could lessen competition for diverse talent and content in affected industries. Despite this warning, federal regulators cleared the companies to move forward, and the merger was finalized on April 8, 2022.
In the wake of the merger, the newly-formed Warner Bros. Discovery faced extensive criticism for lack of diverse leadership, cancellation of content with diverse voices and storylines, elimination of the Stage 13 content studio, which focused on stories and creators from underrepresented communities, and extensive layoffs and other cost-cutting measures. In January 2023, the Writer’s Guild of America published a bulletin titled “How the Warner Bros. Discovery Merger Hurts Workers and Diversity,” which criticized the “ill-advised merger” as “a clear disaster for the content creators who have lost jobs and a potential employer, as well as for the consumers who are faced with a poorer, less-diverse content landscape.”
Congressman Castro has long been concerned about the lack of diverse representation in American media. In 2020, as chair of the Congressional Hispanic Caucus, he commissioned a series of federal reports from the nonpartisan Government Accountability Office (GAO) on Latino underrepresentation in American media and entertainment. The first report, published in 2021, found that Hispanic workers are significantly underrepresented in the media industry in comparison to the general workforce, with little improvement over a five-year lookback period. The second report, published in 2022, found particular underrepresentation for Latina workers and aggravated disparities in representation for management and executive-level roles. Industry professionals interviewed by the GAO identified numerous challenges to diverse representation in the industry, including financial barriers to entry and retention, limited access to professional networks, and lack of diversity among talent agents, media executives, and other stakeholders.
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