Guilds Raise Antitrust Concerns Over Warner Bros. Sale
Background on Media Consolidation and Warner Bros. Discovery
The landscape of American media has undergone significant transformation over the last decade, characterised by aggressive consolidation and the pivot to direct-to-consumer streaming models. At the centre of this shift is Warner Bros. Discovery (WBD), an entity formed through the 2022 merger of WarnerMedia and Discovery Inc. As of early 2026, the company remains a focal point for federal regulators and industry watchdogs due to its substantial debt load, which was reported to be approximately $40 billion following the initial merger, and its vast library of intellectual property.
The potential sale or further merger of Warner Bros. Discovery assets has been a subject of intense speculation since the expiration of the Reverse Morris Trust tax protections in 2024. These protections previously restricted the company’s ability to engage in certain types of divestiture or acquisition without incurring significant tax liabilities. With those barriers removed, the market has anticipated a move that could further consolidate the “Big Five” Hollywood studios. The three primary guilds representing the creative workforce, the Writers Guild of America (WGA), the Producers Guild of America (PGA), and the Directors Guild of America (DGA), represent a combined membership of over 38,000 professionals. These organisations have historically opposed large-scale media mergers, citing the reduction of competitive outlets for creative work and the downward pressure on wages and residuals.
The current proceedings before the Senate antitrust subcommittee, specifically the Subcommittee on Competition Policy, Antitrust, and Consumer Rights, serve as a formal inquiry into the implications of another major transaction involving Warner Bros. Discovery. The testimony submitted by the guilds on 4 February 2026, highlights the cumulative impact of consolidation on the entertainment ecosystem, which contributes over $200 billion annually to the global economy.
Key Developments in the Senate Antitrust Subcommittee
The Senate antitrust subcommittee has convened to evaluate the competitive impact of a potential sale of Warner Bros. Discovery, following reports that multiple suitors have expressed interest in the studio’s film and television divisions. The WGA, PGA, and DGA each submitted prepared testimony to the subcommittee, outlining specific grievances and structural concerns regarding the proposed transaction. According to reports from Deadline, these submissions are intended to influence the Department of Justice (DOJ) and the Federal Trade Commission (FTC) in their eventual review of any formal deal.
The WGA’s testimony focuses on the concept of “monopsony,” a market condition where there are many sellers (writers and creators) but only a few buyers (studios). The guild argues that the disappearance of another major studio would further limit the number of platforms available for original storytelling, thereby reducing the bargaining power of individual creators. The PGA has echoed these concerns, focusing on the viability of independent production companies that rely on a diverse array of distributors to remain solvent. The DGA’s submission emphasises the protection of creative rights and the long-term health of the theatrical exhibition market, which has struggled to recover to pre-2020 levels.
The subcommittee, led by senior members of the Senate Judiciary Committee, is tasked with determining whether current antitrust laws are sufficient to address the unique challenges of the digital streaming era. The testimony provided by the guilds serves as a primary source of evidence regarding the “harm to labour” standard, a relatively new focus in antitrust enforcement that looks beyond consumer prices to consider the impact of mergers on workers’ wages and working conditions.
Impacts on the Creative Workforce and Production
The primary impact of a potential Warner Bros. sale, as outlined in the guild testimonies, is the anticipated reduction in production volume. Historically, mergers in the entertainment sector have led to “synergies,” a term often used by corporate executives to describe the elimination of redundant departments and the cancellation of overlapping projects. For the creative workforce, these synergies frequently manifest as job losses and fewer “greenlight” opportunities for new television series and feature films.
Data from previous industry consolidations, such as the Disney acquisition of 21st Century Fox, indicate a significant contraction in the number of theatrical releases and a streamlining of television development slates. The guilds argue that a similar outcome for Warner Bros. would be detrimental to the diversity of content available to the public. Furthermore, the WGA has raised concerns regarding the calculation of residuals in a consolidated market. As studios increasingly move content to their own proprietary streaming platforms, the lack of a transparent, competitive licensing market makes it difficult to determine the fair market value of creative work, often resulting in lower payments to writers and directors.
The PGA has highlighted the impact on the “middle class” of Hollywood, the producers and mid-level creatives who do not have the leverage of major stars. In a market with fewer buyers, these individuals are often forced to accept “take it or leave it” contracts with less favourable terms. The guilds contend that the erosion of these professional standards threatens the long-term sustainability of the industry as a career path for new talent.
Reactions from Industry Stakeholders and Regulators
The reaction to the guilds’ testimony has been divided along predictable lines. Proponents of the sale, including some institutional investors and market analysts, argue that Warner Bros. Discovery requires a more stable financial partner to manage its debt and compete effectively against tech giants like Apple and Amazon. These proponents suggest that a sale could actually preserve the studio’s legacy by providing the capital necessary for high-budget production and technological innovation.
However, regulatory bodies have shown an increased willingness to scrutinise media deals. The FTC and DOJ updated their merger guidelines in late 2023 to more explicitly include the impact on labour markets as a factor in antitrust reviews. The testimony from the WGA, PGA, and DGA provides the empirical basis for regulators to argue that a Warner Bros. sale would substantially lessen competition for the services of creative professionals.
Public interest groups have also weighed in, supporting the guilds’ position. These groups argue that the concentration of media ownership into the hands of a few large corporations limits the variety of viewpoints and cultural expressions available to the citizenry. The Senate subcommittee has acknowledged these concerns, with several members expressing scepticism about the benefits of further consolidation in the media sector. The testimony from the guilds is expected to be a cornerstone of the subcommittee’s final report on the state of competition in the entertainment industry.
Next Steps in the Legislative and Regulatory Process
Following the submission of the prepared testimony, the Senate antitrust subcommittee is expected to hold a series of public hearings where guild leaders and corporate executives will be called to testify in person. These hearings will provide an opportunity for lawmakers to probe the specific claims made in the written submissions and to request additional data regarding production spends, employment figures, and market share.
The findings of the subcommittee will not have the force of law, but they will serve as a critical advisory for the DOJ and FTC. If a formal merger or sale agreement is reached, these agencies will conduct a thorough investigation to determine if the deal violates the Clayton Act or the Sherman Antitrust Act. The guilds have indicated that they will continue to lobby for strict conditions on any approved sale, including requirements for minimum production spends, transparent residual reporting, and protections for creative autonomy.
In the interim, the industry remains in a state of uncertainty. The potential for a protracted regulatory battle may deter some buyers or lead to a restructuring of the proposed deal to include the divestiture of certain assets, such as specific cable networks or production facilities. The timeline for a resolution is unclear, but the involvement of the Senate subcommittee ensures that the concerns of the creative workforce will remain a central part of the national conversation regarding the future of Warner Bros. Discovery.
Economic and Market Implications of the Proposed Sale
The economic stakes of the Warner Bros. Discovery sale extend beyond the immediate concerns of the Hollywood guilds. The company’s vast portfolio includes the Warner Bros. Pictures Group, HBO, CNN, and a significant stake in various international broadcasting entities. A sale would represent one of the largest transfers of media assets in history, with implications for the global advertising market and the distribution of news and information.
Market analysts have noted that the valuation of Warner Bros. Discovery is heavily influenced by its ability to scale its streaming service, Max, to compete with Netflix and Disney+. A sale to a larger technology or telecommunications company could provide the necessary infrastructure to expand Max’s global footprint. However, the guilds argue that such a move would further integrate content creation with distribution, creating a “walled garden” that stifles independent competition.
The Senate subcommittee is also examining the impact of the sale on the theatrical exhibition industry. Warner Bros. has traditionally been one of the most consistent providers of content for cinemas. The DGA has expressed concern that a new owner, particularly one with a primary focus on streaming, might deprioritise theatrical releases in favour of direct-to-digital distribution. This shift would have a cascading effect on cinema owners and the thousands of workers employed in the exhibition sector. The testimony submitted on 4 February 2026, serves as a formal warning that the creative and economic health of the industry is at risk if the sale proceeds without significant oversight and intervention.