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American unions have called for Netflix And the Warner Bros. Discovery merger would be blocked.
US streaming giant Netflix said on Friday it has agreed to buy Warner Bros. Discovery film and TV studios business in a deal worth US$72 billion (£54 billion).
Labor The unions the Writers Guild of America West (WGAW) and the Writers Guild of America East (WGAE), which represent writers in film, television, radio and online media, issued a joint statement demanding the deal be stopped.
He said it would eliminate jobs, reduce wages and worsen conditions for entertainment workers, among other things.
The statement said: “The world’s largest streaming company is swallowing up one of its biggest competitors, which antitrust laws were designed to prevent.
“The result will be job losses, reduced wages, worsening conditions for all entertainment workers, increased prices for consumers and reduced quantity and variety of content for all audiences.
“The public as well as industry employees are already dominated by just a few powerful companies that exercise tight control over what consumers can see on television, streaming, and in theaters. This merger must be blocked.”
The deal followed an auction process in which Netflix was the frontrunner to buy the business, which owns HBO, streaming service HBO Max and franchises. harry potter And Batman. It competed with Paramount Skydance and Sky’s owner Comcast.
The deal could dramatically reshape established Hollywood film TV industryWhich has already faced significant upheaval amid the rapid growth of streaming.
Netflix stated that they expect to maintain Warner Bros.’ existing operations and continue to release films in theaters.
Meanwhile, Equity, a performing arts and entertainment trade union in the UK, stressed the importance of maintaining cinema releases as well as protecting workers’ terms and conditions.
Kathy Sweet, head of TV and film at Equity, said: “While company ownership changes, the Equity contracts that underpin the pay, conditions and secondary payments for our members remain intact.
“We welcome the commitment to maintaining movie theater releases and investing in original content, which should be a positive step forward for jobs and pay for artists and everyone in the entertainment industry.”
Netflix said it would pay investors $27.75 (£20.79) per share in the Warner Bros. Discovery business.
The deal will close after Warner Bros. Discovery completes the proposed spin-off of its cable channels, which include CNN, TBS and TNT Sports in the UK.
As a result, the process is not expected to be completed until at least the third quarter of next year.
Still, the deal is likely to face significant scrutiny from regulators in the US and Europe.
Ted SarandosThe co-chief executive of Netflix said: “Our mission has always been to entertain the world.
“With Warner Bros.’s incredible library of shows and movies, from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends, along with our culture-defining titles like Stranger Things, Kpop Demon Hunters and Squid Game, we’ll be able to do even better.
“Together, we can give audiences everything they love and help define the next century of storytelling.”
Netflix said the move will provide it with a deeper library of film and TV content for its subscribers.
It will also enhance its studio capabilities, allowing the company to expand its production capacity and increase investment in original content in the long term.
David Zaslav, chairman and chief executive of Warner Bros. Discovery, said: “Today’s announcement connects two of the world’s greatest storytelling companies to bring even more people the entertainment they love to watch most.”
Netflix shares fell slightly after the deal was announced.
Danny Hewson, head of financial analysis at AJ Bell, said: “Spending so much cash will never be a happy share price, but there is potential for considerable cost savings if this deal can clear those key regulatory hurdles quickly.
“How much of those savings are passed on to streaming platform customers or whether Netflix will have too much pricing power remains to be seen, this is one of the areas that will face a tremendous amount of scrutiny in the coming months.”