Dozens of Congress members urge antitrust investigation of AT&T’s WarnerMedia, Discovery merger
Dozens of Congressmen sent a letter to the US Department of Justice on Saturday expressing “serious concerns” about the proposed merger of AT&T WarnerMedia and Discovery and urging a thorough review of the deal.
“This transaction raises significant antitrust concerns. In particular, the merger threatens to strengthen the combined company’s market power and significantly reduce competition in the media and entertainment industries, harming both consumers and American workers, ”wrote 30 congressmen in the signed letter.
Dallas-based AT&T and Discovery announced in May their intention to combine the WarnerMedia and Discovery businesses in what would create one of the most impressive studios in Hollywood. As part of the proposed transaction, AT&T would receive $ 43 billion, and its shareholders would own 71% of the new company’s stock, while Discovery’s shareholders would own 29%.
WarnerMedia properties include CNN, TruTV, Cartoon Network, Warner Bros. and streaming service HBO Max, while Discovery owns TLC, Discovery Channel, HGTV, OWN, Animal Planet and streaming service Discovery +.
The transaction is still subject to regulatory approval and should be completed by mid-2022.
In the letter, the congressmen also called on the Justice Department to consider whether the proposed merger would lead to less media diversity.
“When we learn more about Warner Media’s $ 43 billion merger with Discovery, it is clear that the Department of Justice must investigate whether this transaction violates antitrust laws while also examining whether this corporate merger has the diversity of content in an industry that too often excludes will further reduce the voices, perspectives, talents and ideas of blacks, browns, immigrants and indigenous peoples, “Pramila Jayapal, D-Wash., said in a statement.
The letter references Nielsen data dated December 2020, which shows that Hispanics make up 5.5% of the actors on screen across television, despite making up 18.8% of the population. Congressmen argue that lack of media representation and “on-screen dehumanization” can lead to aggression against Latinos in the US and abroad, pointing out that the man who was in El Paso in 2019 for the targeted conquest and Killing of Hispanics was responsible, it negatively influenced stereotypes of Latinos.
US MP Joaquin Castro, D-San Antonio, who signed the letter, said Discovery and WarnerMedia “need to show a real commitment to widespread Latinos and Latinas inclusion that is commensurate with their market exposure”.
Analysts have described the deal as a boon for investors. Over the past few years, AT & T’s unionized workers have documented how the company shed jobs while seeking growth through an aggressive acquisition strategy led by former CEO Randall Stephenson that included the purchase of WarnerMedia.
“The recent consolidation in the media and entertainment market has resulted in higher prices for consumers, and all too often the merging parties have failed to gain advantage and break promises to the public, Congress and antitrust authorities,” wrote the congressmen in the letter.
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