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Lawmakers seek DOJ probe into Warner Bros Discovery merger

The four members of Congress say the merger led to layoffs, cancelled shows and other "anticompetitive" behavior.

The four members of Congress say the merger led to layoffs, cancelled shows and other "anticompetitive" behavior.

The Warner Bros. Studios logo is seen on a building along Hollywood Blvd. in Los Angeles, California on May 28, 2007. (Photo: Flickr user abgpt/Creative Commons)

Four members of Congress have sent a letter to the U.S. Department of Justice (DOJ) urging its top attorneys general to investigate changes in the media industry following the combination of Discovery Communications and AT&T’s WarnerMedia last year.

The letter, sent to U.S. Attorney General Merrick Garland and Assistant Attorney General Jonathan Kanter last Friday, was a follow-up note sent by the four federal lawmakers who expressed concern that the merger could undermine competition in the media sector.

On April 7, the four urged the DOJ to “investigate the state of competition in affected labor and consumer markets” following the merger and the formation of Warner Bros Discovery (WBD), which they assert “enabled [WBD] to adopt potentially anticompetitive practices that reduce consumer choice and harm workers in affected labor markets.”

The lawmakers seem to take issue with mass layoffs at the newly-formed company shortly after the merger, as well as decisions by key WBD executives to cancel television series on HBO Max and shelve some theatrical films, including one that was nearly complete.

While the four are calling for a probe, they already assert that the merger has harmed “workers and heightened barriers to entry in the media and entertainment industry.” Now, they appear to want the DOJ to find them conclusive evidence to support these views.

The lawmakers already have some ancillary evidence to support their view that the WBD merger caused more harm than good: They note that shortly after the combination of the companies, WBD executives shut down CNN Plus, an ambitious streaming service that generated little interest among the public, resulting in the layoff of 400 workers. It also shuttered parts of its advertising and sales departments, impacting another 100 employees, the letter said.

“In total, the aforementioned cuts affected thousands of people; notably, WBD still has $3.5 million in planned cuts, which does not bode well for workers,” the letter said.

The note was written by Rep. Joaquin Castro, Sen. Elizabeth Warren, Rep. David Cicilline and Rep. Pramlia Jayapal. It comes the same month WBD executives are set to hold a media event outlining their overall strategy for their streaming products.

Earlier, that strategy involved WBD shuttering its cornerstone HBO Max product and the lifestyle-focused Discovery Plus in favor of a single streaming product that joined the libraries of both services. Those plans have eased up a bit, with executives now appear poised to reboot HBO Max into a service called “Max” that incorporates much of the Discovery Plus library, while continuing to operate Discovery Plus as a cheaper service with mostly non-scripted shows.

A press conference with WBD executives on its streaming plans is set for Wednesday, April 12 at 1 p.m. Eastern Time.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).