A Netflix executive promised lawmakers Tuesday that the firm’s $82 billion acquisition of Warner Bros. Discovery would increase domestic production jobs, use union labor for domestic shoots and continue theatrical releases.
Lawmakers in both parties peppered Netflix and Warner Bros. executives with questions about their highly anticipated deal, prompting Netflix to issue a multitude of promises to combat monopoly concerns.
Among lawmakers’ concerns are the potential for Netflix to withhold marquee titles, raise licensing fees and subscription prices, weaken competition for creative talent, limit access to popular content and raise barriers to entry.
Republican Sens. Eric Schmitt of Missouri, Ashley Moody of Florida and Josh Hawley of Missouri questioned the executives about “wokeness,” diversity, equity and inclusion initiatives and parental concerns with children’s shows, such as those with LGBTQ+ content.
“Why in the world would we give a seal of approval or a thumbs-up to make you the largest behemoth on the planet related to content?” Mr. Schmitt asked Netflix co-CEO Ted Sarandos. “It seems as though you have engaged in creating not only a monopoly of content, potentially, but the wokest content in the history of the world.”
Mr. Hawley challenged Mr. Sarandos, “Why is it that so much of Netflix content for children promotes a transgender ideology? It offends me that Netflix is pushing this content at parents in what seems to be a very coordinated, thought-through, planned-out agenda in a way that frankly, I think, undermines parents.”
Mr. Sarandos replied that “Netflix programming has no agenda of any kind.”
“We feature a wide variety of stories and programs to meet a wide variety of tastes,” he said.
“My concern is that you don’t share my values or that of many American parents,” Mr. Hawley responded. “I think we ought to be concerned about what content you’re promoting.”
Mr. Hawley laid out a list of commitments he wanted from Mr. Sarandos: increasing domestic production jobs, using union labor for all future domestic shoots and a 45-day or longer theatrical release window for major Warner Bros. films. Mr. Sarandos pledged to meet those requirements.
The streaming giant agreed to buy the Warner Bros. studio and streaming business in a cash-and-stock deal in December, significantly bulking up Netflix’s media powerhouse.
Sen. Mike Lee, chairman of the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, scrutinized the competitive impact of the proposed Netflix-Warner Bros. transaction.
The Utah Republican said the merger raises “serious antitrust concerns that warrant scrutiny.”
Netflix and HBO Max, owned by Warner Bros., share 80% of the same subscribers, and Netflix will have the opportunity to offer those two services together at a discount, a “very pro-consumer” standpoint, said Bruce Campbell, chief revenue and strategy officer of Warner Bros.
Mr. Sarandos said it is not a typical media merger, with what he called the “Noah’s Ark” problem of two of everything.
“We’re buying a company that has assets that we do not, and we will keep investing in Warner Brothers. We will preserve one of the five major studios in Hollywood,” he said.
Mr. Campbell said the merger would not result in layoffs or higher consumer prices. He said Netflix will invest in Warner Bros.’ operations for continued production.
The acquisition could also put theaters on the back burner as viewers turn toward the subscription model, but Netflix has said that Warner Bros. films will continue to be released in theaters.
“We are seeing a crisis of community in general,” said Sen. Cory A. Booker of New Jersey, ranking Democrat on the committee. “In America, theaters used to be … institutional experiences that brought people together across backgrounds.”
Mr. Lee previously sent a letter to Netflix and Warner Bros., slamming the deal and telling the companies he has “concerns about potential abuse of the merger review process, particularly the exchange or misuse of competitively sensitive information and the competitive harm that can arise while a transaction remains under review.”
In contrast to Netflix’s deal, which would bolster the largest streaming service in the world, Paramount Skydance made an unsolicited, all-cash takeover offer of $108.4 billion for Warner Bros. three days after Netflix.
“With either merger, another corporation will gain significant control over what we see, what we hear, and the news we consume,” Mr. Booker said, adding that it would result in the consolidation of a sector of the economy that is already seeing “significant consolidation.”
• Mary McCue Bell can be reached at mbell@washingtontimes.com.
Please read our comment policy before commenting.