The ongoing strike of the Writers Guild of America (WGA) is seen as a response to the wave of mergers that have occurred in Hollywood, resulting in increased power for studios and streamers at the expense of workers. Laura Blum-Smith, the WGA West’s director of research and public policy, highlighted the harmful effects of consolidation and vertical integration on the industry, leading to precarious working conditions, short-term employment, and lower pay for writers and other industry workers. Blum-Smith believes that revisions to merger guidelines, particularly ones that address labor concerns, are crucial in preventing further mergers that exploit workers.
Blum-Smith specifically mentioned Disney, Amazon, and Netflix as examples of companies that have gained power through anticompetitive consolidation and vertical integration. She argued that these mergers have allowed these companies to impose unfavorable working conditions and lower pay on writers and other industry employees. She believes that the new draft merger guidelines by the Federal Trade Commission (FTC) and Department of Justice (DOJ) are essential in reviving antitrust enforcement. These guidelines take a more skeptical view of mergers as the natural path for company growth and emphasize the ways in which mergers harm competition, including their impact on workers.
In July, the FTC and DOJ released a new road map for regulatory review of mergers, which includes assessing the impact of proposed transactions on labor. This signals a shift in the agencies’ approach, indicating that they will evaluate whether mergers negatively affect wages and working conditions. Previously, mergers were primarily considered based on their benefits to consumers. While the guidelines do not have the force of law, they influence how judges handle lawsuits to block proposed transactions and inform the public about the competition enforcers’ evaluation of a merger’s potential harm to competition.
Labor impacts resulting from industry consolidation have caught the attention of antitrust enforcers. Lina Khan, the chair of the FTC, has acknowledged concerns over companies controlling the entertainment supply chain and exerting market power over creators and workers. Adam Conover, a writer and WGA board member, shared his personal experience during a 2022 forum where his show, Adam Ruins Everything, was canceled due to AT&T’s acquisition of Time Warner. He emphasized that a few companies now dominate the production and distribution of entertainment content, allowing them to suppress wages and establish burdensome employment terms. The consolidation of Hollywood has wider consequences, affecting not just writers but also actors. For example, after Disney acquired 21st Century Fox, the studios eliminated backend participation and restricted actors through exclusive contracts, limiting their opportunities for other work.
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Blum-Smith argued that aggressive competition enforcement is necessary as Wall Street continues to advocate for more consolidation in spite of the industry’s history of failed mergers. She believes that these mergers have not delivered the claimed consumer benefits and have left writers and audiences with less diversity of content and fewer choices. She warned that further mergers would reduce the number of outlets for writers to sell their work and tell their stories, while the remaining companies would have more power to lower pay and worsen working conditions. Blum-Smith emphasized the importance of strong enforcement against mergers to protect workers in the media industry and across the country, considering the new merger guidelines as a step in the right direction.
