By Jody Godoy and Lisa Richwine
July 14 (Reuters) – The Writers Guild of America sued on Tuesday to block Paramount’s $110 billion acquisition of Warner Bros Discovery, saying the deal would jeopardize writers’ livelihoods and threaten the health of U.S. entertainment.
The case is another blow to Paramount’s bid to become a bigger rival to Netflix and Disney, a day after California and 11 other states sued to block the deal. Paramount, which argued the combination would increase opportunities for writers, must now deal with a double dose of legal work.
The Writers Guild said in its lawsuit filed in San Francisco federal court that the deal would reduce the number of buyers in Hollywood for films and TV shows, harming its members.
“With fewer competitors, the merged Paramount-Warner Bros. entity would have both the incentive and the ability to lower costs by suppressing writers’ wages and reducing output. Writers will be paid less and have fewer employment opportunities,” the WGA complaint said.
The union, made up of the Writers Guild of America West and Writers Guild of America East, has 18,000 members across the entertainment industry.
Paramount responded that it had “deep respect for the WGA and its members” and that its plans would increase work for writers who have suffered as Hollywood cut back on production of TV shows and movies.
“A combined Paramount-WBD will have the scale and resources to reverse the current trends in our industry and expand opportunities for writers, not shrink them,” a Paramount spokesperson said. That would lead to “more development slates, more series and film greenlights, and our continued strong commitment to working with the guild’s writers across our brands.”
Paramount Skydance CEO David Ellison has promised to release 30 movies per year and to keep them in exclusively for theaters for 45 days.
The Writers Guild said that by combining two of five major Hollywood studios, the merger would unlawfully concentrate demand for writers of top-grossing films and episodic television series, and decrease the bargaining power of writers who enter exclusive deals with studios.
Paramount has released classic films such as “Titanic,” “The Godfather” and “Top Gun.” Warner Bros is the studio behind the “Harry Potter” franchise, the Batman films and “Goodfellas.”
The Writers Guild pointed to a case brought by the U.S. Department of Justice that successfully blocked Penguin Random House’s bid to buy rival Simon & Schuster, on grounds that it would hinder competition in the market for top-selling books and lower advances paid to authors.
That case hinged on the argument that the combined company would control close to half the market for publishing, an effective monopsony that would leave hundreds of individual authors with fewer options and less leverage.
(Reporting by Jody Godoy in New York and Lisa Richwine and Dawn Chmielewski in Los Angeles, Editing by Franklin Paul, David Gregorio, Rod Nickel)
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