The Resistance Against the Netflix-Warner Bros. Merger Is Taking Root

While Republican Sen. Josh Hawley got a lot of attention for accusing Netflix co-CEO Ted Sarandos of advancing a “transgender agenda” through the streamer’s programming during a Senate hearing last week, most corners of Hollywood were paying closer attention to the questions he asked Sarandos just a few minutes prior about the potential fallout of its planned $82 billion acquisition of Warner Bros.

Namely, about how the deal would affect jobs for American entertainment workers, and who the senator invoked as he was asking those questions.

“[The] Teamsters have major concerns about this deal, as does, frankly, pretty much every segment of labor,” the Missouri senator said. “And what they all say is they’re worried that you’re going to cut residuals, which is effectively payments, you’re going to cut production jobs.”

That Hawley cited the labor groups was a sign that the forces organizing to oppose any sale of Warner Bros. are making their voice heard in Washington, according to Writers Guild of America West President Michele Mulroney.

Ensuring they continue to be heard will be critical as the coalition to fight the Netflix-Warner Bros. deal — or any deal, for that matter — takes form to fend off what many believe to be an existential threat to Hollywood. The first step has seen smaller nonprofit groups ally with more established lobbyists and unions, adding their own unique concerns to the mix. Now comes the task of getting in front of the lawmakers, regulators and state officials who are able to throw a wrench in the potential deal.

They’re starting to see momentum pick up in what will likely be a year-long fight to stop Hollywood’s M&A wave from consuming one of its century-old cornerstones.

“The fact that there even was a committee hearing to begin with was hopeful enough,” Mulroney told TheWrap. “It was even more heartening to see Sen. [Cory] Booker introduce our material on how mergers hurt our industry into the record. They started showing more nuanced understanding of how our industry works.”

Finding their voice

Since Warner Bros. first went up for sale in September, groups like the WGA and movie theater trade org Cinema United began closely monitoring the bidding process alongside the American Economic Liberties Project, a nonprofit org that pushes for stronger enforcement of antitrust law.

Once Netflix was picked as the winning bid, the response from those groups was swift. Cinema United called the deal an “unprecedented threat” to theaters and sent written testimony to antitrust committees in both chambers of Congress. The Writers Guild, longtime vocal opponents of Hollywood’s M&A wave, took similar measures.

But Jax Deluca, interim executive director of the Future Film Coalition, said that her organization quickly saw that more voices were needed beyond just unions and trade groups who already had deep lobbying resources in Washington. The tens of thousands of independent businesses in entertainment needed a voice, too.

“According to the MPA, 92% of the roughly 122,000 businesses in entertainment employ fewer than 10 people, and a lot of them are ones that work interchangeably between the independent film sector and the commercial sector,” Deluca told TheWrap. “That independent ecosystem has specific needs in order to exist within the broader industry, but our needs are often underrepresented in policy conversations.”

As the House Antitrust Subcommittee held its first hearings on the Netflix-Warner deal on the first week of January, the Future Film Coalition met with Cinema United and WGA, having already opened talks with groups like Art House Convergence and the International Documentary Association.

While lobbyist meetings were already underway with regulators and lawmakers, the Warner sale opponents wanted to add a public-facing element to their organizing. Unlike a piece of legislation like a production tax incentive, there aren’t legally mandated avenues for entertainment workers to go to a government meeting and provide public comment.

That’s why the Future Film Coalition, along with 20 other partner organizations, launched the website Block the Merger at the Sundance Film Festival last month. Through it, the coalition is holding teach-ins and gathering stories from filmmakers, production vendors, producers, independent theater owners and others in the entertainment ecosystem who can speak to how the ripple effects of another Hollywood merger will affect them.

Deirdre Haj, president of Art House Convergence, said that such on-the-ground testimony can be crucial towards shaping the arguments that are made to federal regulators. Last month, AHC signed on to a letter from the American Economic Liberties Project urging state attorneys general to file antitrust suits against the Warner-Netflix merger.

And to underline just how widespread the impact of a Warner Bros. Discovery sale would be to the industry, in that 21-page letter, the AELP warned that repertory screenings are a key part of the movie theater business, especially for art house theaters that make classic film screenings a major part of their programming. The AELP added that there are “no enforceable assurances” that could compel Netflix to continue licensing classic films in Warner’s catalog like “Casablanca” and “Rebel Without a Cause” to theaters should the merger be approved.

Haj said that warning was added to the letter after input from Art House Convergence.

“These lawyers and economists are trying to write in a way that the attorneys general understand. But without these grassroots organizations, without these representatives of communities who can provide that key context and detail, the true impact of how these mergers kill cinema can’t be fully communicated,” she said.

Face to face

One of the next steps for the Block the Merger coalition is to get Congress to give them the chance to provide these key anecdotes in person. Deluca said that the group is lobbying Sen. Mike Lee (R-Utah), chair of the Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights, to schedule an impacted parties hearing.

That will allow all the members of the coalition as well as WGA and Cinema United to speak publicly to lawmakers about what will be lost if Netflix acquires Warner Bros.

“Lee is the one who will make the decision on scheduling, but we will be reaching out to all the senators on that committee to try to make that hearing happen,” Deluca said.

Meanwhile, the WGA, AELP and Cinema United are continuing to lobby state attorneys general like California’s Rob Bonta and New York’s Letitia James to file antitrust lawsuits against the merger.

With President Trump expressing personal interest in the Warner sale — as well as buying $1 million in bonds in both Netflix and Warner — there is skepticism among the Block the Merger coalition whether the federal regulators he has appointed will provide impartial oversight, making state AGs key potential players.

“The talks we’ve had so far have been very productive,” Mulroney said. “From a consumer standpoint, there’s a lot of concern about how the costs of these mergers will be passed on to subscribers. But we’re helping them see the marketplace from the view of a writer who would have one less major buyer and distributor, devastating our ability to negotiate good contracts for ourselves, protect our working conditions and expand the variety of stuff that gets made.”

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