Over 1,000 creatives in Hollywood have signed an open letter backing any legal action that California Attorney General Rob Bonta may take to block the merger between Paramount Skydance and Warner Bros. Discovery.
The signatories expressed their “unequivocal opposition” to the transaction on Monday, warning that it would result in fewer production jobs, higher costs, and less consumer choice. They also voiced concern that the merger would reduce the number of major U.S. film studios to four.
“Our industry is already under severe strain, in large part due to prior waves of consolidation,” the open letter reads. “We have witnessed a steep decline in the number of films produced and released, alongside a narrowing of the kinds of stories that are financed and distributed. Increasingly, a small number of powerful entities determine what gets made—and on what terms—leaving creators and independent businesses with fewer viable paths to sustain their work.”
The Democracy Defenders Fund touted the letter’s signatures from over 75 Academy Award winners and nominees, including actor Joaquin Phoenix and director Denis Villeneuve.
There is fear that consolidation will lead to mass layoffs across both entertainment companies, considering they operate in the same business and share many of the same roles in film and television production. Thousands of employees could lose their jobs.
Mass layoffs are not unprecedented at Paramount. After Skydance acquired the company last year, plans were in motion to cut as many as 2,000 employees. About 1,000 employees were initially laid off.
Additionally, analysts expect that consolidation will likely result in the reduced overall output of movies and television series. This trend was seen in the years after Disney acquired 20th Century Fox in 2019.
The Hollywood stars, however worried they may be, are optimistic that the deal will be undermined.
“Fortunately, someone is doing something about all this,” they said. “California Attorney General Rob Bonta and his colleagues in other states are reportedly scrutinizing the merger and considering legal action to block it. We are grateful for their leadership, and stand ready to support all efforts to preserve competition, protect jobs, and ensure a vibrant future for our industry, for American culture, and for our single most significant export.”
Bonta is leading an antitrust investigation into the pending Paramount-WBD merger, but has not announced any enforcement action yet to halt the $111 billion purchase. The Democratic attorney general may be considering a multi-state lawsuit to prevent the deal from proceeding while it undergoes review from the Department of Justice.
Bonta is reportedly coordinating with New York Attorney General Letitia James on the matter, according to Politico.
In February, Paramount ultimately prevailed in a bidding war against Netflix by upping its offer. Paramount CEO David Ellison intends to have the combined company release 30 theatrical movies per year, a tall task that has received skepticism from many Hollywood figures.
Bonta attended a March 20 spotlight hearing held by Sen. Adam Schiff (D-CA), who questioned Hollywood talent about the proposed merger’s possible impacts and other issues plaguing the entertainment industry. Bonta sat in the crowd while Noah Wyle, the lead actor on the hit HBO medical drama The Pitt, and three other witnesses testified.
“We are engaged currently in a rigorous review, and we have shown that we won’t hesitate when we think that the law is being broken,” Bonta said of the merger after the hearing.
Wyle was one of the 1,034 people who signed the open letter. Some of the top creatives opposing the Paramount-WBD merger included actors Mark Ruffalo and Jane Fonda, comedian Rosie O’Donnell, director David Fincher, and actor-composer Lin-Manuel Miranda, of Hamilton fame.
The next step in the process surrounding the Paramount-WBD merger comes on April 23, when WBD shareholders will vote on the transaction. The shareholders will likely vote in favor of the merger, but it remains to be seen whether they approve WBD CEO and President David Zaslav’s potential $886 million payout from the agreed deal.
Paramount expects the deal to close by the end of the third quarter on Sept. 30, but it could potentially be tied up in court if states file litigation to block it.
If the transaction does not close by that date, WBD shareholders will be paid a 25-cent-per-share “ticking fee” for each quarter until the merger is finalized. That could prove very costly — not to mention Paramount must pay a $7 billion regulatory termination fee if antitrust authorities halt the deal.
ACTING DOJ ANTITRUST CHIEF DENIES PARAMOUNT-WBD MERGER WILL BE APPROVED FOR POLITICAL REASONS
Meanwhile, the United Kingdom is preparing to launch an investigation into how the merger could affect its economic competition and consumers.
“Effective competition helps ensure UK customers can enjoy quality content at a competitive price. The film and TV industries contribute billions to our economy, so it’s important we assess whether deals between studios may harm competition,” a spokesperson for the Competition and Markets Authority said on Monday. “Today’s invitation to comment is an initial step as we review Paramount’s purchase of Warner Bros Discovery. We expect to launch our Phase 1 investigation in the coming weeks.”