Writers Guild Of America Also Sues Paramount, Citing Looming Merger Layoff Bloodbath

from the do-not-pass-go,-do-not-collect-$200 dept

Not long after twelve states sued Paramount claiming its $111 billion merger with Warner Brothers would harm market competition, the Writers Guild of America (WGA) filed their own lawsuit, warning that the massive debt load from the media industry’s latest megamerger will result in an ocean of layoffs for an already reeling U.S. entertainment industry.

The lawsuit notes that the current film industry is dominated by just five players: Disney (ABC), NBCUniversal (Comcast), Sony, Paramount (CBS), and Warner Brothers. Comcast recently restructured to make it easier to sell off its NBC and Universal properties, opening the door to a lot of very quick consolidation in addition to the speedy Skydance/Paramount/Warners merger.

“With fewer competitors, the merged Paramount-Warner Bros. entity would have both the ​incentive and the ability to lower costs by suppressing writers’ wages and reducing output. Writers will be paid less and ​have fewer employment opportunities,” the WGA complaint said.

Supreme Court precedent (for whatever that’s worth anymore) has long indicated that any merger
yielding a post-merger market share exceeding 30% (which this deal does) is presumptively anticompetitive. The WGA notes that muted competition will result not just in fewer jobs, but lower wages and fewer opportunities for creatives overall across both film and television.

“With fewer competitors, the merged Paramount-Warner Bros. entity would have both
the incentive and the ability to lower costs by suppressing writers’ wages and reducing output.
Writers will be paid less and have fewer employment opportunities,” the lawsuit states.

While Paramount would like to pretend this is a debate, and most U.S. press outlets bury the lede, U.S. history is vividly clear on the harms created by media consolidation. That was most recently personified by AT&T’s disastrous acquisitions of DirecTV and Time Warner, which resulted in upward of 50,000 layoffs, higher prices, worse service, and no shortage of shuttered creative projects.

The rushed acquisitions of both CBS/Paramount and Warner Brothers — all so Larry Ellison’s son can play media mogul — have created a particularly heavy debt load of $79 billion. Such debt is always paid for by consumers and labor, often in more ways than one.

Paramount has promised to release 30 theatrical releases per year and to keep them in exclusively for theaters for 45 days, but as I’ve long made clear, pre-merger promises are utterly worthless. Especially in a country dead set on steadily lobotomizing its public interest regulators. As we’ve seen with consolidation in sectors like wireless, America’s favorite pastime is pretending to ignore the harms of pointless mergers.

This is a pretty clear example of the kind of consolidation that should be blocked for the benefit of labor, markets, and consumers, but despite a lot of rambling pretense about a love of free market competition and entrepreneurial spirit, America consistently fails to walk the talk on antitrust, the impact of which is abundant and getting exponentially worse under pay-to-play Trumpism.

Filed Under: antitrust, consolidation, film, hollywood, jobs, larry ellison, layoffs, media, mergers, movies

Companies: paramount, warner bros., writers guild