Movie theater chains are bringing their opposition to any sale of Warner Bros. to Capitol Hill.
“We are deeply concerned that this acquisition of Warner Bros. by Netflix will have a direct and irreversible negative impact on movie theaters around the world,” Cinema United, the largest trade organization representing exhibitors, said in written remarks sent on Wednesday to the House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust as it is set to hold a hearing on the potential acquisition of Warner Bros.
“Such an acquisition will further consolidate control over production and distribution of motion pictures in the hands of a single, dominant, global streaming platform in a market that is already highly concentrated,” the group, led by CEO Michael O’Leary, added.
As Paramount and Netflix continue a heated battle for WBD largely over the price tag and deal terms, the movie theater owners told Congress that Netflix’s business model does not include theatrical exhibition and Paramount acquiring Warner Bros. would dramatically increase market consolidation after earlier rounds of mergers and acquisitions.
“If Paramount or another major studio ends up displacing Netflix as the buyer, our concerns are no less serious. A combination of Paramount and Warner Bros., for instance, would consolidate as much as 40 percent of each year’s domestic box office in the hands of a single dominant studio,” the trade organization wrote to Washington D.C. politicians.
The threat to the exhibition industry should Netflix or Paramount prevail in acquiring Warner Bros. would be reduced film output from Hollywood and consumer choice at the multiplex. “Amid this backdrop of significant M&A activity, Netflix is now seeking to acquire Warner Bros., a streaming competitor that controls a significant library of shows and movies. If Netflix’s proposed acquisition of Warner Bros. is not challenged, the threat to our members is grave — and possibly even existential — given its hostility toward exhibition,” Cinema United stated.
In the latest twist around the heated contest for Warner Bros., the WBD board on Wednesday released a letter rejecting the new offer from Paramount and sticking with its signed agreement with Netflix.
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