Members of Congress detonated WarnerMedia’s Discovery merger proposal

Members of Congress detonated WarnerMedia's Discovery merger proposal

More than 30 Democratic members of Congress are expressing concern over the cable programming giant’s $ 43 billion takeover of WarnerMedia, owner of CNN, HBO, Cartoon Network, and Warner Bros.

In a letter on Monday to the US Atti. General Merrick Garland and Atti’s assistant. General Jonathan Kanter, lawmakers said the proposed consolidation “raises serious concerns about antitrust laws” and requires closer scrutiny from the antitrust arm of the US Department of Justice, now headed by Kanter.

Discovery aims to take over WarnerMedia from telecom giant AT&T, which bought WarnerMedia’s assets three and a half years ago after a protracted battle with the US Department of Justice. The Discovery / WarnerMedia merger was announced in May and hasn’t been much shocked so far as it went through an antitrust review process.

Monday’s letter represents the first major rebuff to the US deal.

“The merger threatens to strengthen the combined firm’s market power and substantially reduce competition in the media and entertainment industries, harming both consumers and American workers,” said a letter written primarily by four lawmakers, Rep. Joaquin Castro (Democratic Texas), Rep. David N. Chicillin (M.D.), Senator Elizabeth Warren, Massachusetts, and Rep. Pramila Jayapal, Washington.

The letter was signed by about 30 other members of Congress, including. Rep. Alexandria Ocasio-Cortez (DN.Y.), Rep. Jamie Ruskin (Democrat for Maryland), Rep. Zoe Lofgren (Democrat for San Jose), and Ted W. Lieu (Democrat for Torrance).

WarnerMedia and Discovery CEO David Zaslav has previously argued that the deal is competitive. They noted that Discovery is much smaller than WarnerMedia and will not cut the number of Hollywood studios because Discovery does not own its own film studio or major television studio that specializes in script content. Discovery owns channels such as Animal Planet, Investigation Discovery, TLC, Food Network, and the popular HGTV. (Discovery declined to comment on Sunday.)

In addition, Discovery has long focused on low-budget “popular science programming,” as opposed to HBO and Warner Bros., which have produced high-budget franchises such as Game of Thrones, Wonder Woman, and Godzilla vs. Kong. , “The Big Bang Theory and the Harry Potter films.

The move came as the Justice Department took a close look at the bargaining power of tech and social media companies, including Facebook, Amazon and Google. The Justice Department is separately considering Amazon’s proposed $ 8.45 billion takeover of legendary entertainment studio MGM, home of the James Bond and Rocky franchises.

Just last month, the Justice Department filed a lawsuit to block the alleged consolidation of the book world – a $ 2.2 billion takeover of ViacomCBS’s Simon & Schuster publishing house by German media giant Bertelsmann Penguin Random House. The deal will reduce the number of major US publishers from five to four.

Castro, in particular, is worried that the Discovery-WarnerMedia alliance could further constrain media options for Hispanics.

“The media and entertainment industry already suffers from a lack of Latin American representation in its workforce,” the letter says.

In September, the Government Audit Office said the letter indicated that there are “very few professional, managerial and executive positions” in the media and entertainment sector with Hispanics.

“Economic justice cannot be realized without ensuring that all communities, especially low-income and minority communities, are protected from the exploitation and abuse that often accompanies concentrated economic power,” the letter said.

Legislators also said the post-merger companies later backtracked on their promises to deliver value to consumers.

“Finally, the recent consolidation in the media and entertainment market has led to higher prices for consumers, and all too often the merging parties have failed to provide benefits and have broken promises made to the public, Congress and competition authorities,” they wrote. …


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