Hollywood writers, producers, directors and theater owners voiced skepticism over Netflix Inc.’s proposed $82.7 billion takeover of Warner Bros. Discovery Inc.’s studio and streaming businesses, saying it threatens to undermine their interests.
The Writers Guild of America, which announced in October it would oppose any sale of Warner Bros., reiterated that view on Friday, saying the purchase by Netflix “must be blocked.”
“The world’s largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent,” the guild said in an emailed statement. “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 worries raised by the movie and TV industry’s biggest trade groups come against the backdrop of falling movie and TV production, slack ticket sales and steep job cuts in Hollywood. Another legacy studio, Paramount, was sold earlier this year.
Warner Bros. accounts for about a fourth of North American ticket sales — roughly $2 billion — and is being acquired by a company that has long shunned theatrical releases for its feature films. As part of the deal, Netflix co-CEO Ted Sarandos has promised Warner Bros. will continue to release moves in theaters.
“The proposed acquisition of Warner Bros. by Netflix poses an unprecedented threat to the global exhibition business,” Michael O’Leary, chief executive officer of the theatrical trade group Cinema United, said in en emailed statement Friday. “The negative impact of this acquisition will impact theaters from the biggest circuits to one-screen independents.”
The buyout of Warner Bros. by Netflix “would be a disaster,” James Cameron, the director of some of Hollywood’s highest-grossing films in history including Titanic and Avatar, said in late November on The Town, an industry-focused podcast. “Sorry Ted, but jeez. Sarandos has gone on record saying theatrical films are dead.”
On a conference call with investors Friday, Sarandos said that his company’s resistance to releasing films in cinemas was mostly tied to “the long exclusive windows, which we don’t really think are that consumer friendly.”
The company said Friday it would “maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.”
On the call, Sarandos reiterated that view, saying that, “right now, you should count on everything that is planned on going to the theater through Warner Bros. will continue to go to the theaters through Warner Bros.”
Competition from online outfits like YouTube and Netflix has forced a reckoning in Hollywood, opening the door for takeovers like the Warner Bros. deal announced Friday. Media giants including Comcast Corp., parent of NBCUniversal, are unloading cable-TV networks like MS Now and USA, and steering resources into streaming.
In an emailed note to Warner Bros. employees on Friday, Chief Executive Officer David Zaslav said the board’s decision to sell the company “reflects the realities of an industry undergoing generational change in how stories are financed, produced, distributed, and discovered.”
The Producers Guild of America said Friday its members are “rightfully concerned about Netflix’s intended acquisition of one of our industry’s most storied and meaningful studios,” while a spokesperson for the Directors Guild of America raised concerns about future pay at Warner Bros.
“We will be meeting with Netflix to outline our concerns and better understand their vision for the future of the company,” the Directors Guild said.
In September, the DGA appointed director Christopher Nolan as its president. Nolan has previously criticized Netflix’s model of releasing films exclusively online, or simultaneously in a small number of cinemas, and has said he won’t make movies for the company.
The Screen Actors Guild said Friday that the transaction “raises many serious questions about its impact on the future of the entertainment industry, and especially the human creative talent whose livelihoods and careers depend on it.”
Oscar winner Jane Fonda spoke out on Thursday before the deal was announced.
“Consolidation at this scale would be catastrophic for an industry built on free expression, for the creative workers who power it, and for consumers who depend on a free, independent media ecosystem to understand the world,” the star of the Netflix series Grace and Frankie wrote on the Ankler industry news website.
Netflix and Warner Bros. obviously don’t see it that way. In his statement to employees, Zaslav said “the proposed combination of Warner Bros. and Netflix reflects complementary strengths, more choice and value for consumers, a stronger entertainment industry, increased opportunity for creative talent, and long-term value creation for shareholders.”
