Last week, almost 4000 actors, writers, directors and producers in the entertainment industry, including Glenn Close, Emma Thompson, Jason Bateman, Kevin Bacon, Lin-Manuel Mirnda, J.J. Abrams, and Ben Stiller signed an open letter raising serious concerns about the proposed Paramount-Warner Bros. Discovery merger. They were right to do so, as the proposed deal would reduce the number of major U.S. film studios to just four and could result in reduced opportunities for creators, fewer jobs across the entirety of film and television production, higher costs, and less choice for audiences everywhere.
In February, the Northern Kentucky Tribune published my reasoning for joining a bipartisan group of former state attorneys general calling on the federal Department of Justice to take a hard look at the then-proposed Netflix acquisition of Warner Bros. Since that time, Paramount significantly increased the offering price and supplanted Netflix as the potential acquiring company. Although the offering company has changed, the reasons for government regulators to scrutinize this proposed consolidation remain, and in fact, a few additional wrinkles have been added.
My primary concern with the acquisition of Warner Bros. by a large streaming service (such as the one Paramount currently owns) was always that consolidation could significantly limit the opportunities for independent and smaller filmmakers, and the writers, directors, and crews they employ.
As I have pointed out, Kentucky has a significant state incentive program for the motion picture and television industry, which has rapidly expanded film production throughout our Commonwealth and which now contributes more than $200 million annually to our economy. Bigger is not always better, especially if it has the potential to thwart the production of smaller budget films or projects, which often seek opportunities in places like Kentucky.
In addition to Kentucky ramifications, Paramount currently owns 28 local CBS affiliates nationwide, and it has been reported that Paramount’s acquisition costs are being partially financed by three foreign sovereign wealth funds.
This should trigger important Federal Communications Commission (FCC) review regarding whether a foreign entity is gaining control of domestic broadcasting. Likewise, having news divisions like CBS and CNN come under common control should receive fair and impartial federal scrutiny.
The federal Department of Justice recently announced it would not fast track its review of the proposed Paramount-Warner Bros. deal. The UK government also recently announced it was opening an investigation of its impacts abroad.
Several state Attorneys General, led by Rob Bonta of California, have stated they will investigate potential negative impacts under their antitrust authority. These are all important initial steps.
The goal here should not be corporate aggrandizement in the entertainment and information industries. Instead, the focus should remain artistic independence, freedom of expression, and preserving necessary vibrant entertainment industry competition in places like Kentucky and throughout our country. Along with federal regulators, state Attorneys General can play an important role in insisting that these fundamentals are preserved and protected.
Jack Conway, a Democrat, served as the Commonwealth of Kentucky’s 49th Attorney General. He is now an attorney in Louisville.