{"id":512790,"date":"2022-11-19T20:46:10","date_gmt":"2022-11-19T17:46:10","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fear-for-your-megamergers-the-justice-dept-is-finally-taking-action\/"},"modified":"2022-11-19T20:46:10","modified_gmt":"2022-11-19T17:46:10","slug":"fear-for-your-megamergers-the-justice-dept-is-finally-taking-action","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fear-for-your-megamergers-the-justice-dept-is-finally-taking-action\/","title":{"rendered":"#Fear for Your Megamergers: The Justice Dept. Is (Finally) Taking Action"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3e5607eecde\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3e5607eecde\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/fear-for-your-megamergers-the-justice-dept-is-finally-taking-action\/#Fear_for_Your_Megamergers_The_Justice_Dept_Is_Finally_Taking_Action\" >Fear for Your Megamergers: The Justice Dept. Is (Finally) Taking Action<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"Fear_for_Your_Megamergers_The_Justice_Dept_Is_Finally_Taking_Action\"><\/span>Fear for Your Megamergers: The Justice Dept. Is (Finally) Taking Action<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    On Oct.\u202f31, the Department of Justice antitrust division landed a major victory when a federal judge blocked Penguin Random House\u2019s $2.175 billion bid to buy rival Simon &amp; Schuster from Paramount Global. After legal wrangling in a trial closely monitored by Hollywood, U.S. District Judge Florence Pan found that combining two of the world\u2019s largest book publishers would hurt competition for best-selling books. \u201cThe government has presented a compelling case that predicts substantial harm to competition as a result of the proposed merger,\u201d Pan wrote. \u201cThe post-merger concentration of the relevant market would be concerningly high: The merged entity would have a 49% market share, more than twice that of its closest competitor.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    The ruling marks a triumph for a rejuvenated DOJ antitrust division after decades of lax enforcement \u2014 and a troubling sign for Hollywood moguls contemplating mergers. \u201cAnybody who is looking to do sizable M&amp;As in the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> sector where you\u2019re going to lose a player should be concerned after this,\u201d the head of a mid-major studio, speaking under the condition of anonymity, tells <em>The Hollywood Reporter<\/em>.\u00a0<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    The case brought by the government contended the merger would suppress competition to acquire the publishing rights to \u201canticipated top selling books.\u201d Prosecutors advanced a theory that the deal will harm authors by giving the newly merged entity \u201coutsized influence over who and what is published and how much [they] are paid for their work.\u201d The suit represented regulators\u2019 bid to crack down on so-called monopsonies, a dynamic in which a buyer with outsize market power can purchase labor and goods at prices under market value. With the ruling under its belt, the government will likely be emboldened to bring more cases revolving around harm to workers, legal observers say. \u201cThey\u2019ll be looking for potential impacts on labor markets in a way that wasn\u2019t on the top of their mind in the past,\u201d says Benjamin Sirota, a former prosecutor at the DOJ\u2019s antitrust division.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Judge Pan\u2019s analysis was straightforward: the fewer publishers there are to bid for books, the less authors will be able to demand for publishing rights. The judge concluded that advances are tied to competition in the industry, which would go from five major publishers to four if the merger was <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roved. \u201cThe record contains numerous examples of books that sold for unexpectedly high advances and achieved other favorable terms for their authors due to the bidding frenzy incited by competitive auctions,\u201d the judge wrote.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    The ruling over the publishing deal was issued as shares in Warner Bros. Discovery \u2014 saddled with more than $50 billion in debt left over from AT&amp;T\u2019s takeover in 2018 \u2014 hit an all-time low on Nov.\u202f9 since its own merger was finalized in April, amplifying rumblings that another sale could be around the corner. While negotiations are barred until 2024, there has been industry speculation that Comcast\u2019s Brian Roberts<strong> <\/strong>is looking to combine NBCUniversal with the David Zaslav-led company. (A Comcast rep did not reply for comment, while Zaslav said at a late-September staff town hall that WBD is \u201cabsolutely not for sale.\u201d)\u00a0<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Meanwhile, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nytimes.com\/2022\/11\/18\/technology\/live-nation-ticketmaster-investigation-taylor-swift.html\">renewed DOJ attention<\/a> on the 2010 merger approval of Ticketmaster and Live Nation \u2014 which has seen high-profile ticket snafus for acts like Taylor Swift and Bruce Springsteen \u2014 is amplifying calls from activist groups who have been calling for an unwinding of the deal. \u201cTicketmaster\u2019s market power over live events is ripping off sports and music fans and undermining the vibrancy and independence of the music industry,\u201d Sarah Miller, executive director of the American Economic Liberties Project, told <em>THR<\/em><em> <\/em>in October.  Live Nation, in a statement on its site on Friday, replied: \u201cNo serious argument can be made that Ticketmaster has the kind of market position in secondary ticketing that supports antitrust claims.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Under Judge Pan\u2019s reasoning to block the Simon &amp; Schuster merger, a deal of that size would now be exceedingly difficult to pass antitrust review, experts say. There are five major film studios \u2014 Disney, Sony, Universal, Warner Bros. Discovery and Paramount \u2014 that account for the bulk of production and distribution of theatrical <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">movies<\/a> in the United States. In 2021, they dominated the domestic box office in terms of market share with 84.8 percent of the business, per Comscore data. Any merger between those companies \u2014 in which five studios become four \u2014 especially one involving Disney, which accounted for 25.5 percent of the box office last year, will likely draw regulatory scrutiny.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n     \u201cA five-to-four merger sufficiently increases consolidation that [the deal is] probably going to be blocked in most circumstances, period,\u201d notes Daniel McCuaig, a former prosecutor at the DOJ\u2019s antitrust division. The Hollywood mid-major studio exec adds, \u201cIf you have four of the largest studios that control what gets into marketplace in a global meaningful way, that\u2019s not healthy. Regulators should 100 percent\u202fstep in.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Competition enforcers are already taking notice of declining compensation to filmmakers, actors and crewmembers as a result of consolidation. \u201cWe\u2019ve heard concerns that a handful of companies may now again be controlling the bulk of the entertainment supply chain from content creation to distribution,\u201d said Federal Trade Commission chair Lina Khan in April during a listening forum over revisions to merger guidelines, in a nod to anticompetitive conduct by studios that led to the Paramount Decrees. \u201cWe\u2019ve heard concerns that this type of consolidation and integration can enable firms to exert market power over creators and workers alike and a potentially limit the diversity of content reaching consumers.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Adam Conover, writer and board member of the Writers Guild, said in the forum that his show <em>Adam Ruins Everything<\/em> was killed by AT&amp;T\u2019s acquisition of Time Warner in 2018 when truTV\u2019s parent company forced the network to cut costs. He stressed that a handful of companies \u201cnow control the production and distribution of almost all entertainment content available to the American public,\u201d allowing them to \u201cmore easily hold down our wages and set onerous terms for our employment.\u201d After Disney acquired 21st Century Fox in 2019, he said that they pushed Hollywood into ending backend participation and trapping actors in exclusive contracts preventing them from pursuing other work.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Former DOJ prosecutor Sirota says the government could challenge future media mergers by advancing cases revolving around potential harm to labor. \u201cIf someone is bidding for my services and I can get three different bids all competing against each other, I\u2019ll get a better rate if there are three people bidding for me instead of two,\u201d he says. \u201cIt\u2019s a simple concept for a judge to get behind.\u201d\u00a0<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Taking into account market share and monopsony concerns, studios and distributors outside of the five majors make attractive acquisition targets. Take Lionsgate, which has faced sale speculation for years. The Jon Feltheimer-led company is aiming to separate its studio business from its Starz pay TV and streaming service. If any of the five major studios are in the market to acquire a competitor, a smaller target such as Lionsgate could make the most sense \u2014 as far as antitrust concerns \u2014 because such a merger would likely not lead to the company gaining an outsize market share and overly contracting the landscape of competition.\u00a0Universal, for example, accounted for 15.6 percent of the domestic box office in 2021. By acquiring Lionsgate, which had 2.3 percent, the company would still have two competitors ahead of it in terms of theatrical market share for the year. (Antitrust analysis is not confined to a studio\u2019s performance in a single year, but the figures reflect that the deal is less likely to raise red flags than a merger between top competitors, like Disney and Paramount.)<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    In March, Amazon closed its $8.5 billion purchase of MGM in a deal that was not challenged by the FTC. While the ecommerce company is a global retail juggernaut, Amazon is not as big of a player in Hollywood yet and MGM does not have a distribution platform that could anticompetitively boost Amazon Prime Video\u2019s popularity among streaming platforms. Considering regulators didn\u2019t sue to block the deal, the tech giants have a road map toward expanding their reach in the entertainment industry since they have little market share but troves of cash to rapidly grow it through acquisitions, legal experts say. <\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    Alex Alben, a UCLA professor of privacy, cybersecurity and internet law, says that tech\u2019s entrance into Hollywood has boosted competition. \u201cYou have new market entrants, like Apple and Amazon, competing for consumers,\u201d he says. \u201cYou have price competition on the streaming side, and you have a lot more content being offered than ever before.\u201d Alben notes that regulators would face an uphill battle arguing that a deal \u2014 like, say, Apple buying a studio the size of Lionsgate in a merger mirroring Amazon buying MGM \u2014 violates antitrust law. Unlike Penguin Random House and Simon &amp; Schuster, which are both considered major players in the publishing industry, Apple is not looked at as a powerhouse in the entertainment industry when it comes to production.<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    That\u2019s not to say tech giants will be off the hook for Hollywood buys, especially in this regulatory environment. \u201cThe era of lax enforcement is over,\u201d proclaimed DOJ antitrust chief Jonathan Kanter in April. \u201cAnd the new era of vigorous and effective antitrust law enforcement has begun.\u201d<\/p>\n<p class=\"paragraph larva \/\/  a-font-body-m     \">\n    <em>A version of this story first appeared in the Nov. 21 issue of The Hollywood Reporter magazine.\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/subscribe.hollywoodreporter.com\/sub\/?p=THR&amp;f=saleb_2&amp;s=IH2205THRS\">Click here to subscribe<\/a><\/em>.<\/p>\n<\/p><\/div>\n<p><script type=\"text\/plain\" class=\"optanon-category-C0004\">\n!function(f, b, e, v, n, t, s) {\nif (f.fbq) return;\nn = f.fbq = function() {n.callMethod ? n.callMethod.apply(n, arguments) : n.queue.push(arguments);};\nif (!f._fbq) f._fbq = n;\nn.push = n;\nn.loaded = !0;\nn.version = '2.0';\nn.queue = [];\nt = b.createElement(e);\nt.async = !0;\nt.src = v;\ns = b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t, s);\n}(window, document, 'script', 'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '352999048212581');\nfbq('track', 'PageView');\n<\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more Like this articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/social-media\/\" target=\"_blank\" rel=\"noopener\">Social Media category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.hollywoodreporter.com\/business\/business-news\/paramount-doj-simon-schuster-penguin-random-house-1235265709\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fear for Your Megamergers: The Justice Dept. Is (Finally) Taking Action On Oct.\u202f31, the Department of Justice antitrust division landed a major victory when a federal judge blocked Penguin Random House\u2019s $2.175 billion bid to buy rival Simon &amp; Schuster from Paramount Global. After legal wrangling in a trial closely monitored by Hollywood, U.S. District&#8230;<\/p>\n","protected":false},"author":1,"featured_media":512791,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.hollywoodreporter.com\/wp-content\/uploads\/2022\/11\/35rep_opener_MAIN.jpg?w=1024","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[135885],"class_list":["post-512790","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-mediaa","tag-business-features"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512790","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=512790"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512790\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/512791"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=512790"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=512790"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=512790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}