WGA warns of Paramount-WBD merger ‘disaster,’ vows to fight any deal

The Writers Guild of America (WGA) has said a merger of Paramount and Warner Bros Discovery (WBD) would be a “disaster” and vowed to work with regulators to prevent any such deal coming to fruition.

David Ellison

In a joint statement issued on Thursday, WGA West and WGA East highlighted the negative impact of mega-mergers and zeroed in on the antitrust issues it could raise.

“Merger after merger in the media industry has harmed workers, diminished competition and free speech, and wasted hundreds of billions of dollars better invested in organic growth,” said the guild.

“Combining Warner Bros with Paramount or another major studio or streamer would be a disaster for writers, for consumers and for competition. The WGAW and WGAE will work with regulators to block the merger.”

Historically, the WGA has been vehemently opposed to industry consolidation, due to the fact it generally means fewer buyers in the market and therefore fewer doors for writers to knock on.

In a report released in 2021, it was critical of the outcomes of the Comcast/NBCUniversal and Disney/Fox mergers, which were completed in 2011 and 2018/19 respectively.

It was vocal in its opposition to the merger of WarnerMedia and Discovery to form WBD in 2022.

One particular annoyance for the guild has been that merging entities typically claim that combining will enable them to invest more in content, but the PR spin is divorced from the realities of lay-offs, fewer shows, smaller budgets and less creative risk-taking.

While it has been widely understood for at least six weeks that Paramount was in pursuit of WBD, the WGA has remained silent. However, this week’s official statement from WBD that it is, in fact, for sale has prompted the guild to speak out.

On Tuesday, WBD announced it is exploring a range of strategic options after receiving “unsolicited interest” from “multiple” parties about acquiring all or parts of the company.

According to WBD, the options being considered include moving ahead with its planned separation into two companies (with streaming/studios on one side, and linear networks on the other), selling the entire company, or separate transactions for the company once it splits.

Paramount has now made three separate offers to acquire all of WBD, starting with a mid-September bid to buy the company for US$19 per share, before increasing to US$22 and then US$23.50. All those offers have so far been rejected.

According to the New York Times, Paramount CEO and chairman David Ellison sent a letter to WBD’s board laying out why being acquired by his company represents the best deal for WBD shareholders.

Among his reasons, Ellison suggested Paramount, which is backed in part by his father – the world’s second richest man and a Donald Trump ally – would face the fewest regulatory obstacles.

“Other potential acquirers of WBD – today or in the future – would need to overcome significant (perhaps insurmountable) hurdles given their dominant market positions,” he wrote.

At present, Paramount appears to be the only company making a play to acquire all of WBD. Netflix and some of the other streaming tech companies have previously said they are not interested in owning legacy media assets. However, it is expected that most will explore bids for WBD’s studio and streamer assets.