Following Paramount’s revised proposal, eleven Republican state Attorneys General are urging the Department of Justice to subject the proposed Netflix and Warner Bros. merger to a “thorough and exacting review,” warning it could create a monopoly in streaming and damage the theatrical movie business.
In a formal letter addressed to Attorney General Pamela Bondi, Deputy Attorney General Todd Blanche, and Acting Assistant Attorney General for Antitrust Omeed A. Assefi, the coalition argued that the merger would likely result in undue market concentration, higher subscription prices, less innovation, and reduced competition.
States Warn of Monopoly in Streaming
The Attorneys General point to a private lawsuit already filed in federal court in California, which alleges Netflix’s acquisition of Warner Bros. would substantially lessen competition in the Subscription Video on Demand market.
The lawsuit claims the merger would eliminate HBO Max as a direct competitor and lead to higher subscription prices, lower-quality content, and fewer consumer choices.
The states echo those concerns, arguing that vertical control of Warner Bros.’ content library could allow Netflix to foreclose competitors and dominate the market.
Concerns Over Theatrical Movie Releases
Beyond streaming, the letter raises alarms about the future of theatrical exhibition. The Attorneys General cite concerns that Netflix could alter Warner Bros.’ traditional theatrical release model.
The letter references criticism from filmmaker James Cameron and industry groups who argue that theatrical exhibition remains a critical part of the creative process. It also cites remarks attributed to Netflix CEO Ted Sarandos describing movie theaters as outdated.
According to the letter, changing Warner Bros.’ theatrical exclusivity windows could harm theater owners and employees at a time when the industry is still recovering from the COVID-19 pandemic and Hollywood labor strikes.
“Culturally Catastrophic,” Theaters Warn
The Attorneys General reference statements from Cinema United, a trade group representing major chains such as AMC and Regal, which described the potential merger as “culturally catastrophic.”
The letter argues that allowing Netflix to acquire a studio built around theatrical exclusivity could disrupt the broader film ecosystem just as major theatrical years are projected to generate significant revenue for the sector.
States Call for Clayton Act Review
The coalition urges the DOJ to conduct a rigorous review under the Clayton Act, which governs mergers that may substantially lessen competition or create monopolies.
Signatories include Attorneys General from Nebraska, Montana, Alabama, Alaska, Iowa, North Dakota, Kansas, South Carolina, Tennessee, West Virginia, and Utah.
The letter concludes by offering assistance to the Department of Justice as it evaluates the proposed deal, underscoring that the merger’s impact could reach far beyond streaming and into the broader American film industry.
