As a lifelong labor advocate and union member, I find myself deeply concerned by the recent developments in the Democratic party’s stance on corporate power. The open challenges to Joe Biden’s agenda, particularly regarding antitrust, are troubling signs of the influence of big money interests within our party.
In an attempt to bolster Kamala Harris‘s backing among Democrats, two substantial donors publicly contested a fundamental principle of Joe Biden’s plan – limiting corporate influence – which could potentially lead to significant internal party discord if Donald Trump loses in November, causing a potentially bitter split.
On July 25th, LinkedIn co-founder Reid Hoffman appeared on CNN advocating that, if the vice president gets elected, she should dismiss Federal Trade Commission chair Lina Khan. According to Hoffman, Khan has been acting “beyond her job description.” In his opinion, antitrust matters are acceptable, but he considers it inappropriate to engage in a battle, which is what he believes Khan is doing. Notably, Hoffman has contributed $7 million to a Democratic super PAC and serves on the board of Microsoft, a tech company whose acquisition of Activision is being opposed by the FTC led by Khan.
In the span of just two days, I find myself reflecting on merger regulations under the current administration, as expressed by media tycoon and ex-Ticketmaster chairman Barry Diller during a CNBC interview. When asked if he’d attempt to influence the next administration to replace the current official, his response was blunt: “Absolutely, I would. I think she’s a dud.” This remark underscores the growing discontent among Wall Street and Silicon Valley towards mergers and increased scrutiny in deal-making over the past four years – a divide that has caused tension within Hollywood’s unions and studios due to media consolidation worries. Interestingly, behind the scenes, Hollywood lobbyists have been actively engaging lawmakers, as we navigate through this contentious dispute that could potentially impact the industry under the next administration and shape its future.
In a straightforward chat with The Hollywood Reporter, insiders involved in lobbying efforts from the writer, director, producer, and actor circles express their strong opinions about the competitive landscape in Hollywood. Their main gripes revolve around tech giants eroding the boundaries between studios and distributors, posing a threat to the industry’s integrity. Notably, the Directors Guild has met with the Antitrust Division of the Justice Department, led by Jonathan Kanter, who is also being criticized by some affluent Democrats favoring M&A deals. Russell Hollander, the executive director of the DGA, shares their concerns, stating, “We’re worried. It seems that antitrust regulations have not been enforced on tech companies.”
Over a span of twelve years, from 2009 to 2020, there were over $400 billion worth of massive mergers in the media and consumer telecommunications sectors. The majority of this amount can be attributed to five specific transactions: Comcast and NBCUniversal (2011), AT&T and DirecTV (2015), AT&T and Time Warner (2018), Charter, Time Warner Cable, and Bright House (2016), and Disney and Fox (2018). This wave of consolidation, along with deregulation, has reportedly weakened the bargaining power of creators, according to the Writers Guild.
Film producers, finding their earnings eroded through contract talks with studios that are increasingly self-distributing content, share similar feelings of exasperation. In response, the Producers Guild has established a special committee delving into competition matters within the industry. Moreover, they recently invited antitrust advocate Matt Stoller for a discussion with president Donald De Line, an event that attracted representatives from other guilds and labor unions as well.
Certain organizations, such as the WGA, have been urging legislators to reconsider implementing updated Financial Interest and Syndication Regulations. These rules were intended to prevent dominant TV networks from controlling the broadcast market excessively by forbidding them from owning the content they broadcast during prime time slots. (They were abolished in 1993 amid a period of deregulation initiated several years prior by then-President and former SAG head Ronald Reagan.)
As a dedicated advocate within the Writers Guild of America West, I’ve consistently advocated for such actions in our industry. Historically, such circumstances have prompted government intervention.
As a union supporter, I recognize that antitrust actions serve as a valuable tool in addressing our concerns. Last year, organizations like the Writers Guild of America (WGA) and Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) backed changes to merger guidelines that considered potential effects on working conditions. They even stood with me on picket lines during our strikes. With Khan at the helm of the Federal Trade Commission, unions are poised to play an increasingly critical role in shaping policy. It’s essential that Harris maintains her commitment to labor unions and resists attempts to water down some of Biden’s populist policies. A shift towards big-money interests could jeopardize her standing with us.
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Hollywood’s studios, represented by the Motion Picture Association, have encountered disagreements with film unions and guilds over antitrust and labor matters. In June, they communicated to the Federal Communications Commission that market competition is strong. Notably, one of its members, Warner Bros. Discovery, has primarily focused on electing a pro-business president.
“David Zaslav, head of WBD, expressed the need for an opportunity to deregulate, allowing companies to merge and enhance their performance further, during his talk at Sun Valley. The company could potentially seek buyers now that its two-year lockup period has ended, but any significant merger would likely trigger a lawsuit from competition enforcers unless they make way first.”
The question about Trump potentially adopting a less stringent stance on merger scrutiny has become a topic of discussion. Interestingly, his running mate, J.D. Vance, has previously diverged from fellow Republicans by supporting Khan, whom he praised in February as doing an excellent job. It’s worth mentioning that Trump’s Department of Justice filed a lawsuit to halt AT&T’s $85 billion acquisition of Time Warner, marking the first challenge to a vertical merger – where companies not directly competing but related by industry (like a manufacturer and distributor) – in over 40 years.
With influential figures like Hoffman and Diller, along with other major donors in Silicon Valley and Wall Street, potentially shaping Harris’ policy decisions, there might be an increased effort by Hollywood unions and studios to use their political influence to further their goals in antitrust matters. There’s a sense of unease on both sides. As SAG-AFTRA’s general counsel Jeffrey Bennett puts it, “With this administration, the FTC is making strong statements. Will we see the same from another? I can’t say for certain. Everything could change.”
As a long-time reader of The Hollywood Reporter, I can confidently say that their July 31 issue was particularly captivating. If you haven’t already, I highly recommend subscribing to this magazine. It’s not just about the glitz and glamour of Hollywood; it offers insightful analysis, behind-the-scenes stories, and exclusive interviews that provide a unique perspective on the entertainment industry. I find their content enlightening and engaging, and it has certainly added depth to my understanding of the world of show business. So, don’t miss out – click here to subscribe!
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2024-07-31 17:25