Sen. Ruben Gallego on how the WBD-Paramount merger will impact jobs in Arizona

WASHINGTON (KYMA) - Sen. Ruben Gallego (D-Ariz.) wrote a letter to the Department of Justice (DOJ) regarding the merger between Warner Bros. Discovery (WBD) and Paramount Skydance.

In the letter, Sen. Gallego is asking the DOJ how the WBD-Paramount merger will impact job losses and workforce reductions in the state of Arizona.

"The merger would combine two of the largest vertically integrated film studios with prominent streaming platforms, further concentrating decision-making power in this already consolidated market," Gallego wrote. "Labor organizations in the industry have raised concerns that increased concentration can reduce competition among employers, limit opportunities for workers, and place downward pressure on wages and working conditions. Recent reporting also indicates that similar transactions have resulted in layoffs and workforce reductions across the entertainment sector."

According to a press release obtained by KYMA, the senator says:

• Arizona has 80 theatres across our state, putting films on 869 screens.
• 20 different theatrical exhibition companies operate in-state and eight are headquartered in Arizona.
• For every dollar spent at a movie theater, an estimated additional $1.50 is spent at nearby businesses, including restaurants, retail outlets, and transportation.
• Arizona movie theatre related spending supported 11,607 jobs, generated $530.1 million in labor income, and produced $1.64 billion in total output in 2023, including especially significant impacts in Maricopa and Pima Counties.

"Past consolidation in the media sector also suggests that increased concentration can expand the market power of major studios, giving them greater leverage over production, distribution, and exhibition," Gallego expressed. "Across theatrical distribution, market share is concentrated among a small number of major studios that collectively account for most domestic box office revenue."

Back in February of this year, WBD and Paramount signed a merger agreement a day after WBD's deal with Netflix fell through.

The agreement will allow Paramount Skydance to acquire the Warner Bros. film studio, the HBO Max streaming service and several cable channels, including CNN.

Last month, WBD shareholders approved the nearly $111 billion merger, but before the deal is finalized, the antitrust regulators at the Justice Department still need to give their approval.

Also last month, nearly 5,300 movie and television industry professionals signed an open letter expressing their opposition to the merger.

The signers include actors, writers, filmmakers, and other professionals, like Bryan Cranston, Ben Stiller, Kristen Stewart, David Fincher, Denis Villeneuve, Yorgos Lanthimos, and more.

Following this, Paramount responded to the letter, saying in part, "As creators we know firsthand that this is also a moment when the industry has been facing significant disruption—and the need for strong, creative-first and well-capitalized companies that can continue to invest in storytelling has never been greater."

To read Gallego's letter in full, click here.