The combination of Warner Bros. Discovery (WBD) and Netflix (NFLX) will further reduce the number of films available in theaters and compress windows, according to the Independent Cinema Alliance on Tuesday.
The cinema trade organization, which represents about 5,000 independently operated movie screens throughout North America, opposed the acquisition of Warner Bros. by the streaming giant and said independent theaters, which rely on a consistent flow of wide-release titles and fair, predictable release windows, will be heavily impacted by the deal.
“Netflix has made its position clear for years: it is built to serve consumers who watch content on personal devices, not to sustain a robust theatrical ecosystem for families and individuals who want to see movies in theaters,” ICA executive director Frank Rash said in a public statement.
“A Netflix-controlled Warner Bros., which currently accounts for an industry-leading 24% of box office revenue, risks repeating, or worsening, the anticompetitive effects of industry consolidation,” Rash said.
ICA pointed to Disney’s (DIS) purchase of 20th Century Fox as a cautionary example and highlighted that since that deal was announced in 2017, the number of theatrical releases of Disney and its affiliated brands dropped by 40%.
Even after Paramount Skydance (PSKY) CEO David Ellison rebuffed his offer of $30 per share, following at least six unsuccessful bids to buy the whole of Warner Bros., the David Zaslav-led company has not openly expressed interest and continues to view Netflix as its suitor.
In the days to come, Ellison will try and convince WBD shareholders that his $108B deal is better and will likely avoid intense regulatory scrutiny due to his strong ties with the current Trump administration, while the WBD + NFLX combo is expected to face a very strict DOJ antitrust review.