Warner Bros Discovery Merger Being Investigated By US Government

Warner Bros Discovery (WBD) has been the centre of attention since the merger between WarnerMedia and Discovery pushed through. But with so many cancellations of movies, TV shows and even other streaming channels, this has been noticed by some government officials that they sent a letter to the Justice Department to reassess the deal.

The media company has been under the microscope for all their cancellations and all the reboots that have happened for the past year. Some of the projects that weren’t released were used for a tax write-off to recover from the financial loss.

We have to understand that WarnerMedia was already at a loss, so AT&T was interested in merging WarnerMedia with Discovery. The company has many assets like Warner Bros Pictures, DC Studios, Fandango, New Line Cinema, HBO, Cartoon Network, Discovery Channel, TLC, Cinemax and NBA TV just to name a few.

AT&T was selling their other known properties like TMZ, Crunchyroll, Xandar and AppNexus to other companies like Fox Corporation, Sony, Microsoft and others to recover financially.

During that time, WarnerMedia was trying to catch up with other streaming networks like Netflix, Hulu, Disney Plus, Amazon Prime, Apple TV+ and others. While it provided the company with award-winning shows, it was generally a financial loss.

After the completion of the merger, which was named Warner Bros Discovery, the newly appointed CEO, David Zaslav, had the task of identifying how to halt the company’s financial losses. Hence, the cancellations of many projects.

US Congress Wants To Reassess Warner Bros Discovery

On April 7th, a letter was sent to the United States Department of Justice by Senator Elizabeth Warren (D-Mass), Joaquin Castro (D-Texas), David Cicilline (D-R.I.) and Pramila Jayapal (D-Wash) stating:

The damage to content creators whose projects are cancelled in deep development and post-production cannot be overstated. Such cancellations stain these projects, making them less appealing and marketable to other buyers— consumers will likely never be able to watch shows purchased then cancelled by WBD. WBD’s conduct amounts to a de facto “catch and kill” practice, vastly limiting consumer choice.

In other words, they are accusing Warner Bros Discovery of killing off a brand. I can’t blame them why they see it that way. It is an overwhelming number of shows and movies that are all gone. And more recently, HBO Max has been renamed as Max, removing the iconic brand.

This also puts WBD into question about job security. In the letter, it was indicated that:

It has enabled the combined WBD to take aggressive measures, harming workers and creatives in the media and entertainment industry while eliminating the disciplining forces of competition that provide workers with the freedom to change jobs or negotiate for better pay and working conditions.

Things started soon after the merger in April 2022. CNN+, which was just weeks into starting the streaming network, was cancelled. The network only lasted exactly a month. It showed the world that Zaslav was not kidding around.

By August 2022, Batgirl, which was supposed to be an HBO Max film, was already in post-production when it was cancelled. This shook the entertainment industry because of how close it was to finish the project. Many people who were looking forward to seeing the first Latina Batgirl were frustrated to learn that it won’t see the light of day.

More films and TV projects, even award-winning shows like Westworld and Raised by Wolves, were cancelled. By December 2022, there were already 81 cancellations under HBO Max alone. Some even called it “The Great Purge.” By January 2023, it was announced by CFO Gunnar Wiedenfels that the purge of HBO Max was done and now focused on rebuilding their brand.

While there were many lost shows, some have survived and moved to another network like Dead Boy Detectives, now under Netflix.

Warner Bros Discovery Merger Is Being Investigated

Warner Bros Discovery, V for Vendetta, DC, Vertigo

Credit: Warner Bros. Pictures

While many projects are affected by this, I understand why Warner Bros Discovery has been doing a lot of spending cuts. But Warner Bros Discovery has shown that they are not completely cancelling everything.

WBD has made DC Studios which was formerly DC Films. They have also recently announced a new Harry Potter TV series which is said would be closer to the books, with one season per book. Matt Reeves’ The Penguin series recently released a teaser video which is essentially a spin-off sequel to The Batman.

There are several others, like a new Game of Thrones series and a new Big Bang Theory series.

Warner Bros Discovery is putting its focus on known successful brands instead of making experimental shows. While this is financially sound, this doesn’t bode well for the media conglomerate. The letter also says:

With fewer alternatives available to consumers, there is less competitive pressure on WBD to innovate or provide a variety of quality content.

It is interesting though that the recent announcements of the new shows were put out days after the letter from Congress was sent to the Department of Justice. Warner Bros Discovery has also recently released Shazam! Fury of the Gods and will be releasing other projects like Blue Beetle, Godzilla vs Kong 2 and several others. Not to mention that Joker 2 just finished principal photography.

It does seem like it that Warner Bros Discovery is working to rebuild. Anyway, we still have to wait and see if the Department of Justice will do a reassessment of the WarnerMedia-Discovery merger.

What do you think of the development that the US government is looking into the Warner Bros Discovery merger? Let us know your thoughts in the comments below.

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