WASHINGTON, D.C.—Four Democratic lawmakers have sent a letter to the Department of Justice urging it to “investigate the state of competition” in labor and consumer markets impacted by the merger of Warner Bros. and Discovery. 

The letter was signed by Sen. Elizabeth Warren, Rep. David Cicilline, ranking member of the House Judiciary Subcommittee on the Administrative State, Regulatory Reform and Antitrust, Rep. Pramila Jayapal and Rep. Joaquin Castro.

The completion of the deal “appears to have enabled Warner Bros. Discovery (WBD) to adopt potentially anticompetitive practices that reduce consumer choice and harm workers in affected labor markets,” the letter said. 

The letter applauded the Department for its recent antitrust efforts and said that “as the Department continues its laudable work to protect workers and consumers, we urge the Department to closely examine consummated mergers that merit a subsequent review in light of post- consummation actions—such as those of WBD.”

The lawmakers contended that “Warner Bros. Discovery’s market share has enabled it to harm workers and heighten barriers to entry in the media and entertainment industry….[T]he WarnerMedia/Discovery merger…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.”

In the letter the lawmakers cited "numerous labor-force reductions and product cancellations that would limit consumer and worker choice" as examples of limiting consumer choice. 

"Shortly after the merger was finalized, WBD began realizing a number of cost synergies that were used to justify the merger in the first place—including cuts to hundreds of jobs for working people," the lawmakers wrote. "First, WBD cut the streaming platform CNN+. The CNN+ cut affected about 350 employees, and four months later, CNN laid off an additional 400 employees. As part of broader restructuring, WBD also cut overall funding for CNN programming, reducing competition for news and hurting the broader ecosystem of journalism. Further cuts to CNN’s planned original television series and termination of the station’s documentary-buying unit illustrate that WBD is trying to sustain its entertainment business at the expense of news and journalism....In total, the aforementioned cuts affected thousands of people. Notably, WBD still has $3.5 billion in planned cuts—which does not bode well for workers.”

“WBD’s aggressive measures post-merger indicate that current competition in the media and entertainment industry is inadequate,” the letter concluded. “WBD’s new ownership is hollowing out an iconic American studio. After the merger was consummated, WBD canceled many projects in various stages of development and removed content from its platforms. For example, WBD took 68 titles off HBO Max."

The letter also cited WBD’s plans to combined HBO Max and Discovery+ into one streaming platform. “Currently, the plan for the combined streaming service is to keep an ad-supported plan at ten dollars and an ad-free plan between $15 and $16 a month,” the letter noted. “However, WBD is offering a premium plan for consumers that will cost $20 a month `for viewers who want to view HBO’s signature shows in as high a quality as possible.’ This leaves questions unanswered about whether a lower-priced platform will have reduced quality from the current product—while consumers are paying the same price and lack the transparency necessary to fully evaluate the plans and their relative prices. With fewer alternatives available to consumers, there is less competitive pressure on WBD to innovate or provide a variety of quality content.”

“We respectfully request that the Department take another look at the transaction, considering WBD’s post-transaction conduct,” the letter concluded. “We also hope that the competitive consequences resulting from the WarnerMedia-Discovery merger inform updates to the merger guidelines to ensure that the guidelines reflect the needs of workers, consumers, and content creators in the media and entertainment industry.”

WASHINGTON, D.C.—U.S. Senator Elizabeth Warren (D-Mass.) has sent a letter to Federal Communications Commission (FCC) Chair Jessica Rosenworcel urging the agency to block Standard General’s proposed acquisition of broadcaster Tegna.

The $8.6 billion deal has been under review by the FCC since it was first proposed in February of 2022 and is likely to drag on until at least February, 2023. 

The deal has drawn criticism from consumer groups and unions who have worried that it will lead to layoffs and cuts in local news. Pay TV operators and groups representing them have also attacked the deal for reducing competition and giving Standard General too much power in retransmission agreements, which in turn could raise prices for pay TV services.  

In filings shortly before the end of 2022, Standard General reiterated a number of promises it had made earlier by pledging not to lay off newsroom staff and to abide by conditions proposed by pay TV-operator backed groups in negotiations for retransmission consent agreements. 

Standard General also recently launched a website promoting the deal that listed a large number of supporters from a variety of civil rights groups and leaders, including Jesse Jackson. 

In the letter to the FCC Senator Warren called on the agency to use its authority under the Communications Act to block the deal to promote competition and address increasing consolidation in the media industry. 

“The FCC has significant and underutilized authorities to protect competition in the media industry by preventing deals that harm the public interest or reduce competition…I urge you to fulfill your statutory duty by blocking this acquisition,” wrote Senator Warren, who has been a longtime advocate of much stricter anti-trust regulations and enforcement.

In the letter, Warren argues that the deal presents straightforward competition concerns given that Tegna and Standard General both own stations in overlapping media markets. This means the deal will reduce the number of competitors that can place spots on television for advertisers, produce programming for television audiences, and employ workers in those markets, Warren argued. 

The Senator also argued that this complex financial transaction involving both Standard General and Apollo Global Management, which owns the Cox Media Group and other stations, could further threaten competition down the road through higher consumer prices, employee layoffs, and easier collusion, which all could violate antitrust laws. 

Warren did note that Standard General had issued a series of promises to the FCC in December of 2022. Those promised that after the deal is completed, (i) they will irrevocably leave in place the retransmission fees that apply to any Tegna station; (ii) they will not lay off any journalism or newsroom staff for a minimum of two years; and (iii) Standard General and Tegna, on the one hand, and Apollo, on the other hand, will not share any nonpublic competitively sensitive information or enter sidecar agreements with each other.

Warren, however. doubted that those problems would prove adequate. “In light of the poor track record of both structural and behavioral remedies with regard to protecting competition, Federal Trade Commission (FTC) Chair Lina Khan recently expressed her belief that `agencies should more frequently consider opposing problematic deals outright' rather than imposing remedies of any sort,” Warren noted. 

“You have an enormous opportunity to protect workers and consumers nationwide by using this authority aggressively in this matter,” concluded the Senator.

The full text of the letter can be found here. 

WASHINGTON—Massachusetts Senator and Democratic frontrunner Elizabeth Warren has raised concerns over the CBS/Viacom merger agreed this week.

Warren tweeted on Thursday: “First Disney acquired 21st Century Fox. Now CBS and Viacom are merging. Consolidation raises serious concerns for consumers, employees, and the entire sector. The Department of Justice should be paying close attention.”

Where the Disney/Fox deal resulted in job losses, concerns are currently low over cuts regarding ViacomCBS.

However the reaction on Wall Street has reportedly been mixed, with questions raised over the viability of the new company’s management structure.

WASHINGTON—Following the request for comments on the FCC’s proposed rule changes to children’s programming, a group of nine Democratic U.S. Senators—Tammy Baldwin (WI), Richard Blumenthal (CT), Sherrod Brown (OH), Tammy Duckworth (IL), Kirsten Gillibrand (NY), Amy Klobuchar (MN), Ed Markey (MA), Elizabeth Warren (MA) and Ron Wyden (OR)—has filed a letter with FCC Chairman Ajit Pai in opposition to the new rules.

According to FCC Commissioner Michael O’Rielly, the proposed changes to the Children’s Television Act of 1990 are “modest” and are designed to provide schedule flexibility, more diverse and innovative programming, and relieve pressure on broadcasters. However, the senators argue that these new rules would “significantly decrease children’s access to this [educational programming] critical resource.”

Chief among the senators’ concerns are that “the Commission’s current proposed changes would limit the reach of educational content available to children and have a particular damaging effect on youth in low-income and minority communities,” the letter reads. They claim that the new rules would decrease access to valuable educational content through over-the-air services, which 16% of African-American households rely on, 20% of Hispanic households and 30% of Americans making less than $25,000 per year. “We encourage you to continue requiring broadcasters to provide at least three hours per week of regularly scheduled, educational content on primary stations.”

The letter also says that the new rules would allow a third of required educational content to be aired on secondary “multicast” stations. This would limit the number of households that the content could reach, as the senators argue that total viewership of these secondary channels is much lower than broadcasters’ primary stations and aren’t available in “millions” of households.

As for scheduling, only requiring that two-thirds of educational children’s content be regularly scheduled would cause barriers for parents, as they would not know when the programming would be on. As a result, the senators recommend maintaining the current rule that all KidVid programming remain on a regularly scheduled basis.

Other changes that the letter acknowledges could negatively impact children include the extended time frame for when children’s programming can be aired and allowing the required three hours of broadcast per week to be achieved across all of a broadcaster’s stations airing educational programming rather than for each station.

“In exchange for free access to the airwaves, broadcasters, among other public interest obligations, are required to air a mere three hours per week—less than 2% of their total broadcast time—of educational children’s content. This should remain the rule,” the letter concludes.

The vote on the FCC’s KidVid rules is scheduled to take place during the July open meeting on July 10. The NAB previously came out in support of the FCC’s proposed changes.

WASHINGTON—Three of the Democratic candidates for president are weighing in on the proposed Sinclair Broadcast Group purchase of 21 regional sports networks from Disney (formerly owned under the Fox banner). Senators Elizabeth Warren (Mass.), Bernie Sanders (VT) and Corey Booker (N.J.) have co-signed a letter to FCC Chairman Ajit Pai and Department of Justice Assistant Attorney General Mark Delrahim asking the two organizations to look at the proposed deal.

“Given Sinclair’s market power in the local television broadcasting industry and its continued push ‘to inject conversative-tinged coverage into local markets,’ this acquisition raises serious questions about the effects such a deal would have on competition in the industry, prices for consumers and delivery of perspectives in local media and sports content,” the letter reads.

The letter goes on to detail arguments from the senators through examples in recent years where they say Sinclair has attempted to garner more stations under its banner so that it can raise prices for consumers as well as relaying partisan political messages to its viewers, and how this most recent deal is another attempt to do so.

As a result, the senators are asking that the FCC and DOJ answer the following questions by July 8:

• “Have Sinclair Broadcast Corp. and/or The Walt Disney Company filed applications seeking your Department’s consent to transfer control of Disney’s 21 Regional Sports Networks and Fox College Sports to Sinclair? If so, when did they file these applications?
• Does your Department plan to issue a Public Notice that the application has been accepted for filing? Does your Department plan to issue a Public Notice setting a schedule for the public to submit comments on the application?

The Free State Foundation, a free market think tank, issued a rebuff of the senators’ letter, saying that neither the FCC or the DOJ can judge whether Sinclair’s programming is partisan or conservative.

“For either agency to do what the Senators ask is inconsistent with the First Amendment’s guarantee of free speech and freedom of the press,” Free State President Randolph May wrote. “Aside from whether their characterizations of Sinclair’s programming are even accurate, their purpose, an improper one, is to use government power to influence’s Sinclair’s editorial discretion.”