Union demands tough scrutiny of WarnerMedia-Discovery deal

(Image: AT&T/Graphic: The Desk)

One of the largest unions representing telecommunications workers in the United States is calling on federal regulators to closely scrutinize a proposed spin-off of AT&T’s WarnerMedia division that will eventually result in a corporate merger with Discovery Communications.

On Tuesday, the Communication Workers of America (CWA) says it was duped several years ago when AT&T promised that employees of Time Warner would be allowed to join its union and engage in collective bargaining activity without corporate or managerial interference.

Instead of honoring a voluntary union representation agreement, the CWA said AT&T engaged in a protracted legal battle intended to undo the commitments it made before the company acquired Time Warner, which was later renamed WarnerMedia.

“While mergers often result in job loss and create downward pressure on wages, union representation mitigates those effects,” the CWA said in a press release on Tuesday. “Having a voice on the job through collective bargaining agreements would have been transformational for workers throughout Time Warner, from camera operators at CNN to game programmers at WB Interactive Entertainment.”

The decision by AT&T to go back on its agreement with the union ultimately led to downsizing and job losses at WarnerMedia over the last four years. Those job losses are likely to accelerate under a union of WarnerMedia and Discovery Communications as proposed earlier this week; both companies have already touted tremendous revenue growth and cost savings if the content providers are allowed to fuse together.

“AT&T is touting the $3 billion in ‘synergies’ that the merger will create between WarnerMedia and Discovery,” a CWA official said. “Synergies are almost always another way of saying job cuts, and in the absence of union representation and collective bargaining agreements, consolidation is likely to result in lower wages across the industry as workers have fewer options for employment.”

The CWA’s reaction to the merger is something of a mixed bag: On the one hand, the union admits that AT&T’s divorcing itself of WarnerMedia will allow the company to refocus its efforts on its wireless phone and Internet service offerings. Front-line workers who are in charge of building out and maintaining those networks are among those represented by the union, and the CWA admitted a spinoff of WarnerMedia would likely be a good thing for those workers.

But WarnerMedia’s entertainment employees are likely to experience a different outcome. Like other business acquisitions, media mergers typically result in job losses across overlapping positions, with the combined company seeking to trim down redundancies across various departments.

On Tuesday, a CWA spokesperson said federal regulators should “take a serious look at the impact of this transaction on jobs and wages.”

The proposed merger will already be subject to regulatory approval, though AT&T is expected to come under less scrutiny compared to when it acquired Time Warner — then, the merger set off a lengthy anti-trust legal battle with the Department of Justice at the behest of the Trump administration, litigation that was largely viewed as political in nature given CNN’s broadcast commentary about the Trump administration, which was in power at that time. (CNN was owned by Time Warner, remains owned by WarnerMedia and is expected to be part of AT&T’s transaction with Discovery.)

Things are likely to be different this time around: The merger between WarnerMedia and Discovery is largely touted as necessary in order for both companies to survive in the new entertainment landscape, one dominated by streamers Netflix, Amazon Prime Video and the Disney Plus.  A similar argument was made more than a decade ago when Sirius Satellite Radio and XM Satellite Radio pointed to a rise in Internet-based radio and streaming music services as strong competition that necessitated its own proposed merger. That merger was ultimately approved.