The Directors Guild of America (DGA) is planning a discussion with Netflix as theater owners express concerns over the acquisition of Warner Bros. Discovery, calling it an “unprecedented threat” to the film industry.
The DGA expressed serious concerns in a statement, saying, “News that Netflix has secured exclusive negotiating rights with WBD raises serious concerns for the DGA.” They emphasized the importance of a vibrant and competitive industry that fosters creativity and protects the rights of directors and their teams.
The guild stated they will meet with Netflix to clarify their concerns regarding Netflix’s plans for one of Hollywood’s major studios. “We plan to meet with Netflix to outline our concerns and better understand their vision for the company’s future. We will not be commenting further while we conduct this due diligence,” their statement continued.
On another front, theater owners have criticized the deal, labeling it an “unprecedented threat” to the movie industry. Michael O’Leary, president and CEO of Cinema United, stated, “Netflix’s proposed acquisition of Warner Bros. poses an unprecedented threat to the global exhibition business.” He added that the negative effects would reach all types of theaters, from large chains to small independent venues.
O’Leary also indicated that the association is ready to support changes that enhance film production and provide more options for cinema-goers. However, he raised concerns that Netflix’s business model does not align with theatrical releases, stating, “Netflix’s stated business model does not support theatrical release; in fact, the opposite is true.” He urged regulators to carefully evaluate this transaction’s potential adverse effects.
Cinema United reportedly believes that Netflix’s acquisition could lead to a 25 percent drop in annual domestic box office revenue, noting that Netflix primarily streams its films rather than releasing them widely in theaters. “Netflix’s success lies in television, not big screen movies,” O’Leary remarked, adding that irregular theatrical releases meant to qualify for awards do not reflect a genuine commitment to cinema.
Additionally, O’Leary pointed out the acquisition could negatively impact local businesses. He mentioned that for every dollar spent at a local movie theater, an additional $1.50 is typically spent nearby at restaurants and shops. “If fewer films are allowed into the market, that’s at risk. Theaters will close, communities will suffer, and jobs will be lost,” he cautioned.
California Attorney General Robert Bonta also voiced worries regarding the potential merger, stating, “Further consolidation of markets that are central to America’s economic life” could be detrimental to the economy, consumers, and competition.
