Some More News - SMN: Warner Bros. Discovery And The New Batch Of Mergers

Episode Date: November 16, 2022

Hi. In today's episode, we explore the Warner Bros. Discovery merger and the accelerating trend of corporate consolidation. But, there are hopeful signs that the Brandon Justice Department is taking antitrust action seriously. Please fill out our SURVEY: https://kastmedia.com/survey/ Support us on our PATREON: http://patreon.com/somemorenews Check out our MERCH STORE: https://www.teepublic.com/stores/somemorenews?ref_id=9949 SUBSCRIBE to SOME MORE NEWS: https://tinyurl.com/ybfx89rh   Subscribe to the Even More News and SMN audio podcasts here: Apple Podcasts: https://podcasts.apple.com/us/podcast/some-more-news/id1364825229 Spotify: https://open.spotify.com/show/6ebqegozpFt9hY2WJ7TDiA?si=5keGjCe5SxejFN1XkQlZ3w&dl_branch=1 Stitcher: https://www.stitcher.com/show/even-more-news  Follow us on social media: Twitter: https://twitter.com/SomeMoreNews Instagram: https://www.instagram.com/SomeMoreNews/ Facebook: https://www.facebook.com/SomeMoreNews/ TikTok: https://www.tiktok.com/@somemorenews  Sources: https://docs.google.com/document/d/1y... Secure your online data TODAY by visiting https://www.ExpressVPN.com/morenews and you can get an extra three months FREE. Get 20% off and Free Shipping at https://www.manscaped.com/MORENEWS. Manscaped, get your Jingle balls ready for the Holidays. Get to the root of stress with the Stress CBD Complex from NextEvo Naturals. For up to 25% off subscription orders of $40 or more, use promo code MORENEWS at https://www.NextEvo.com.Support the show!: http://patreon.com.com/somemorenewsSee omnystudio.com/listener for privacy information.

Hey there, newsies. You know what's the only thing better than some news? More news! And here is some more news. It is, of course, the 32-year, four-month, and one-day anniversary of the hit film Gremlins 2, The New Batch, starring Zach Gallagher and Phoebe Cates and even horror icon Christopher Lee. Howie Mandel is the voice of Gizmo and John Glover as Daniel Clamp, the real estate millionaire and Trump analog,

with the exception that Clamp is portrayed as less of a sinister dope and more of a naive cog in an otherwise destructive force that is corporate surveillance and homogeneity disguised as futurism. Not to mention the running theme of profit interest and business culture, steamrolling the unique and artistic,

such as the beginning when Clamp literally tears down the mysterious Chinatown shop in which the Mogwai originate. Also, there's a fuckable gremlin this time. Anywho, director Joe Dante was offered a ridiculous amount of money and freedom from Warner Brothers after the studio failed several times to make a sequel without him. He was, of course, the director of the first film. As a response, Dante created a sequel specifically about how the original Gremlins did not need a sequel. In a lot of ways, Warner Brothers is the villain of Gremlins 2, represented

by the Clamp Empire bulldozing and then Disney-fying authentic spaces in an attempt to maximize their wallets by sucking the marrow from everything they touch. Did I mention the fuckable gremlin? The gremlins themselves, of course, represent the pushback from this. The authentic rebelling, in this case, classic creature features originating from a lab run by Christopher Lee. And what I find very interesting about this movie, besides the fuckable gremlin, is that in the 32 years, four months, and one day since it came out, it appears that nothing has actually changed with how Warner Brothers demands sequels.

I'm sure you can understand why our beloved parent company, Warner Brothers, has decided to make a sequel to the trilogy. What? They informed me they're gonna do it with or without us. That is a scene from 2021's The Matrix Resurrections, where Lana Wachowski practically stood on camera and told the audience that Warner Brothers

was going to make a Matrix sequel with or without her involvement. This movie was released the same year as Space Jam 2, in which the villain is a literal algorithm designed by WB to create watered-down stories. It seems we have a pattern emerging, one where the company Warner Brothers is a continued thorn in the side of creatives. This was punctuated in 2022 when the studio began axing DC projects to the fans' disappointment.

And we're going to talk about all of that, but this isn't just about one company. No, it's about several companies squishing together to then make one company, like some kind of hot sex with a gremlin, if that's what you're into, which you are. Let's talk about mergers. As always, it's apparently going to be a horny episode. Okay, so back in April, the new conglomerate Warner Brothers Discovery or WB Discovery formed, bringing together the assets of Discovery Inc. and Warner Media. Obviously, a lot of this deal was based around the streaming marketplace and the opportunity to unite HBO Max and Discovery Plus content under one banner.

Because who doesn't want to see Batman finally take on Guy Fieri, a man who wouldn't have to change a thing to become a Gotham-style villain? It's also functionally an attempt to wind back another earlier mega deal. Back in 2018, AT&T completed an $85.4 billion acquisition of Time Warner. This gave the telecommunications giant access to a huge portfolio of entertainment and media companies, including HBO, Warner Brothers, and CNN. The plan at the time was to use AT&T's trove

of subscriber data to sell targeted advertising and to use WB's resources to produce fresh content specifically for everyone's mobile devices. It makes sense, but in a 2018 kind of way. Such innocent times. Today, it sounds like an extremely antiquated idea embedded within an even more antiquated idea, like trying to sell custom ringtones for wood carved music boxes. Though Donald Trump was infamously negative about the deal, arguing that it concentrated too much power in the hands of too few.

The DOJ decided not to seek an injunction to hold it up. A lot of people kind of dismissed his whole argument as part of a famed, extremely personal grudge against CNN. And those people were probably right, you know, considering that Trump was all too happy to approve the Disney merger with Fox. But here on the showdy, dare we say, perhaps both were bad.

Just three years later, the WB started the process of spinning off all the media assets it had just purchased in a deal with Discovery, birthing the deformed Cronenbergian abomination that is WB Discovery in the process. AT&T CEO John Stanky explained that this would work out pretty well for shareholders

as they'll massively expand their capital base via the new sale, creating more opportunities. But it maybe didn't work out so great for, I wanna say, what was I gonna say? Ha ha ha, every single other person in the world. Once the big deal was finalized, the WB Discovery formed in April of this year. The new company was saddled with a staggering amount of debt.

We're talking an estimated $53 billion, most of it coming over from the WarnerMedia side. So this tiny little newborn company, barely able to stand on its own power, just opening its eyes to take in the streaming marketplace for the very first time, has to start out its naive young life by making $3 billion in cuts,

or to be specific, a significant number of layoffs. So far, the downsizing has impacted WarnerMedia and Discovery's combined sales teams, CNN staffers, and development executives from HBO Max's unscripted international and live action family divisions, along with casting and acquisitions executives, but it's still ongoing.

I feel like my job is on the line and I'm almost certain I don't work for them, almost. The process so far has also included a lot of cost-cutting moves that sort of almost kind of seem like they make the core HBO Max Discovery Plus product significantly worse. As we mentioned, they shelved an almost completed Batgirl movie,

but also a Scooby-Doo Halloween film before audiences even got a chance to see them. Other current or upcoming shows that got the axe include the high-profile bad robot sci-fi drama, Demamonde, from Star Wars half-ass or J.J. Abrams, a planned DC Comics Wonder Twins film, and basically the entire TBS and TNT lineups. Do you remember them?

They were cable channels? Do you remember cable? It was a box that connected to your TV that had the old Netflix with all the Bengay and Imodium ads. I think it came in through your phone lines? Do you remember phone lines? Doesn't ring a bell.

The HBO Max platform has also dropped a ton of archived library content, some of which has just disappeared into a digital void, potentially never to be seen or heard from again. That includes 200 classic episodes of Sesame Street, a show that was once free and aired on public television where it was fueled exclusively by tote bag sales. Our friends at WBD are also in the process of consolidating Cartoon Network Studios

and WB Animation, leading to additional layoffs, even more canceled projects, and the disappearance of popular shows like Infinity Train from the legal non-pirate internet at large. And all in all, a post-merger WBD took an $825 million tax write-down on content. According to an October SEC filing, the company plans to spend up to $1.5 billion on efforts to shrink the company over the next two fiscal years, including consolidating facilities, restructuring and contract termination costs.

I mean, you know what they say, you gotta spend money to lose money. That's the number one rule in the Elon Musk book of business, the apartheid of the deal, whatever. Who am I kidding? Those $8 check marks will take off, I'm sure. Let's be fair and balanced.

We love spending $8 to talk. Anyway, obviously this WB news is inherently disappointing for consumers who are paying the same subscription rates and consistently being threatened with future price hikes to view less content. Not to mention that it's a huge kick in the loins, or lions as an MGM reference

for all you production title heads out there, but a kick in the loins for creatives working in fields like TV animation and digital media. It also seems like a possible violation of the DOJ and Federal Trade Commission guidelines regarding merger enforcement. These agencies are supposed to consider whether a merger would incentivize

the newly formed company to, and I quote, "'Withdraw a product that a significant number of customers strongly prefer.'" Concerns about Discovery CEO David Zaslav and his team stewardship over HBO Max and the wider WarnerMedia content library started early. In August, when the company presented their Q2 earnings, they shared a slide describing HBO Max as male skew,

lean in, and the home of fandoms, while calling Discovery Plus female skew, lean back, and house of genre-dums, which is so baffling, it sort of feels like none of them have ever watched television before, or like, leaned. They also posted a slide excitedly touting the 90-day fiance shared universe of programming, while seeming to forget entirely

that they also own The Conjuring films, which have earned around $2.1 billion to date. Damn, that doesn't even get you on the slide. Ed and Lorraine Warren have a direct line to the Lord and that's not good enough for you? Come on. That's the series that finally tapped into mankind's deep seated fear

of being bitten in the face by snakes and drowned by nuns. in the face by snakes and drowned by nuns. It's wild how someone can take something innocuous like being drowned by a demon nun and make it scary like that. Incredible. But good, well, not all good news. These weird corporate decisions might not even come down to pure incompetence, Some incompetence, sure,

but let's not narrow our options. It's tough not to notice that a lot of the WB Discovery content, either being canceled outright or pulled from the HBO Max platform, prominently featured members of underrepresented communities. That Batgirl film would have starred Dominican American actress Leslie Grace as the titular hero, Batgirl, first for the DC Comics franchise. There's also the case of the Gordita Chronicles, an HBO Max family comedy series about a 12-year-old Dominican girl adjusting to life in 1980s Miami. According to data analytics group Whip Media, the show ranked among the 10 most popular new comedies released in 2022, but it was canceled after just one season.

As showrunner Bridget Munoz-Libowitz told The Hollywood Reporter, it's hard not to feel like this is a pattern. I would think they'd want to grandfather the commitments they made into their future decision-making and not alienate the consumers they have. Again, top 10 new comedy. Texas Democratic Rep. Joaquin Castro went one step further, blasting Warner Brothers Discovery Management as outright hostile to creators of color and accusing them of going out of their way to make the company less inclusive.

He was part of a group of 30 Democratic members of Congress who actually warned that this specifically might happen as a result of the proposed Warner Brothers discovery in a letter to Attorney General Merrick Garland and Jonathan Cantor, the head of the DOJ's antitrust division, back in December 2021. They wrote, The media and entertainment industry already suffers from a lack of Hispanic representation in its workforce. Economic justice cannot be realized without ensuring that all communities, especially low-income and minority communities, are protected from the exploitation and abuse that often accompanies concentrated economic power. Hey, that's exactly what eventually happened. Wowee, are they some kind of psychics like the totally legitimate Ed and Lorraine Warren?

Turns out that according to a 2021 UCLA diversity report Latinos make up about 19% of the country Yet account for just 6% of roles of scripted shows With only a few major players in the theatrical movie and streaming space We can't really afford one whole company to just give up on that audience, lest all Latino representation be reduced to a single embarrassing episode of the Great British Bake Off. And all that's just on the scripted content side. The deal also passed control of the cable news network CNN over to Warner Brothers Discovery,

just as it was reeling from the exit of longtime president Jeff Zucker due to an undisclosed romantic relationship with a colleague. There's a new position open with the Try Guys though, so he'll probably be fine. He'll land on his feet or at least he will try. But this meant the immediate end to the faltering

and some would say bad idea in general, CNN Plus streaming service, which was being viewed by fewer than 10,000 daily users just two weeks after launch. Zucker's exit and the pivot away from CNN Plus meant another heavy round of layoffs. I mean, sure, of course, goes without saying at this point.

They're doing layoffs more often than they have to restock the pantry with fruit snacks. But it also set the network up for an overall reset in terms of tone and approach. And what I mean is, after shutting down CNN+, the network's next big programming move was firing media analyst and frequent Trump critic, Brian Stelter,

the host of one of its most watched shows, "'Reliable Sources'". A show and host, I personally think are not very good. However, the official line from CNN was that they're simply restructuring their Sunday morning schedule in an agenda-free fashion. Axios reported in June, before Stelter was fired,

that the network was planning to dismiss some of its more liberal anchors in order to reset its overall political balance. That report cited Stelter by name. Chris Lick, the former Late Show with Stephen Colbert showrunner who took over for Zucker, has said he's aiming for respectful interviews that don't feel like PR stunts. And sure, you don't want disrespectful interviews on your network, but it's also important that they find out things from the people they're interviewing.

As if sensing the impending skepticism his remarks were going to inspire, Licht also told CNN staffers in August, 2022, to expect even more moves you may not agree with or understand. Comforting. It's also worth pointing out the conservative billionaire investor, John Malone, who not only sits on the board of WB Discovery,

but has been a longtime friend and mentor to new WB Discovery CEO, David Zaslav. In fact, Malone was instrumental in the hiring of Zaslav, then an NBC Universal executive, to come over and run Discovery back in 2006. He's the guy's mentor, and the two of them keep in close touch. To quote one unnamed CNN employee,

John Malone doesn't watch CNN. John Malone only watches CNN via Fox News. If I watched CNN via Fox News, I would hate CNN too. Not that there aren't valid non-Fox News reasons to hate CNN, but he also memorably once tried to recruit Rush Limbaugh to join the Fox News team. So yeah, I don't know. Maybe it's bad to have someone who hates CNN because of their ideological competitor's view of them help make major decisions about CNN. It's just a suggestion, you know, take it or leave it, try it or guy it. That phrase doesn't make sense. It's fine.

Mind you, there's no evidence that they've actually colluded to make CNN more conservative or less liberal or less informative or whatever. There's no evidence that they are actively cutting minority voices either. But if these cuts and changes are about money, well, we should point out that it's not working at all. WB Discovery stock is down more than 50% since the start of 2022. That's this year. And the company's key counter strategy seems to be announcing a price hike in the middle of an economic downturn. Things are going so poorly on the stock front that in September, an Illinois police pension fund

invested in the company filed a class action suit arguing that they'd been misled about HBO Max subscriber numbers prior to the merger. Apparently, AT&T used to count wireless customers who had the option of signing up for HBO Max but had not actually done so as HBO Max subscribers. So, ah, pretty bad when the good guy in a legal situation is a group of cops.

So to recap, this merger is hurting people working in the industry, making the company's products less good, badder even, and aren't guaranteed to actually provide a stock boost short-term or otherwise. So why do any of this? I have an answer for you. But also, and more importantly, I have these ads for you as well! Lick your screen to taste these delicious ads! well. Lick your screen to taste these delicious ads. Hey, I'm Katie Stoll. You all probably know me for my impressions of famous celebrities. Why, with just one change of my voice, I can become

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slash more news. That's 20% off with free shipping at manscaped.com slash more news. Manscaped, for Santa's balls. Oh, weird how we're back from ads. Super weird how time goes forward like that. Listen, look here and listen to my voice. We were talking about the WB merger

and how it seems to be bad for literally everyone, but not literally everyone, as evidenced by CEO David Zaslav's recent $250 million paycheck, which we just happen to know about because of Discovery's SEC filings. Zaslav's recent $250 million paycheck, which we just happen to know about because of Discovery's SEC filings. Zaslav's actual annual salary is just a measly popper like $3 million per year, but he got all those extra funds from stock awards and what's known as non-equity incentive plan compensation, which when you Google translate back to English from rich asshole means bonuses.

In 2021, Zaslav received his maximum allowable cash bonus of $22 million, along with a $4.4 million discretionary bonus, which in part recognized his efforts to initiate, negotiate, and enter into the transaction with the WarnerMedia business. So the board members who wrote Zaslav's deal thought this merger was going to make their stock worth a lot more money, and he got paid $26.4 million specifically to make it happen. They might still be right, if they can strip the company for enough parts before selling it off to another buyer at a profit. In September, rumors began circulating that WB Discovery executives are already considering a new merger with NBCUniversal that would integrate the Peacock service in with HBO Max and Discovery+.

They are incorrigible. Like some kind of, I don't know, fuckable gremlin. So, yeah. Money, obviously, but also in terms of the why of this merger, it's hard not to wonder why the government like allows stuff like this to happen in general. And so allow me to genetically form smart guy glasses after chugging a vial of brain hormone

and explain a little history to you. Glug, glug, glug. Oh, the brain pills, expansion of the brain through the power of stuff. In the early 20th century, antitrust actions by the federal government were largely rare. There was this depression on, you see, a great one.

And most of the attention was on boosting industry and economic recovery. Plus learning the Charleston, which is trickier than it looks. The post-World War II era through the 1970s is sometimes known as the golden age of antitrust. You know, that classic era when all your favorite antitrust heroes

used to drive around in regular cars wearing Lone Ranger masks, punching Nazis. In this era, healthy competition was seen as a vital antidote to fascism, an old historical problem that's thankfully no longer a concern. No one tell him! Tell me what, monkey! Ah, never mind. Today, the entire discussion about corporate consolidation has been boiled down and oversimplified

into a binary choice between unfettered, regulation-free capitalism, the so-called free market we've all heard so much about, and excessive government regulation that's the equivalent to Soviet gulag-style communism. You have to just pick one or the other. If you listen to politicians or public intellectuals, they'll describe this as obvious econ 101 stuff, the way markets have always been

since the East India Trading Company was sailing the high seas and paying everyone's wages in grog. For most of the 20th century, the majority of Western scholars, economists, and experts accepted that under a fascist system, the government controls the economy either entirely by itself or through state-owned and controlled companies. And the only way to actually have a truly free market was through regulations enforcing practices that ensured fair competition. The switchover happened extremely recently in the 1970s,

based largely on the ideas of a group of conservative scholars from the University of Chicago. They were the ones arguing that perfect ideal competition emerges naturally and organically from a free market and requires little to no oversight or regulation by outside parties. Under this line of thinking, businesses should merge anytime it's profitable

for their shareholders to do so. And the only reason the government should ever step in to stop them is if it's going to cause prices for consumers to skyrocket. This is known as the consumer welfare standard. Right or wrong, it's wrong, but bear with me for a second. Right or wrong, this line of thinking has dominated U.S. economic policy ever since its introduction, particularly after the Reagan

administration virtually eliminated Section 2 cases involving monopolies in the 1980s. That specific section of the Sherman Antitrust Act of 1890 makes it illegal for one company to monopolize or conspire to monopolize an entire industry. And it empowers the federal government to break up concentrated power that's being used to unfairly block competition, fix prices, or gain competitive advantage. Prior to the rockin' Ronnie years, Section 2 was applied to a broad range of conduct, including bundled rebates, fraudulent patents, exclusionary product design, exclusive dealing,

expanding of manufacturing capacity beyond what's needed, patent abuse, predatory pricing, price discrimination, price squeezes, refusals to deal fairly with competitors, refusing to share essential facilities with competitors, using dominant market positions to gain unfair advantage, and vertical foreclosure. Legally, everyone from the Department of Justice to the Federal Trade Commission

to even state attorneys general have the authority to enforce federal laws by bringing Section 2 cases against companies. Private parties can even sue companies in federal court to enforce Section 2. But even so, almost no Section 2 cases have been brought since the 80s. How odd.

Also odd that Ronald Reagan, as you might know, was originally an actor whose big break was the film Love Is On The Air, a Warner Brothers film. Coincidence? Yes? That is correct. It was just a coincidence.

Still, the last major Section 2 case actually pursued by the DOJ itself was US v. Microsoft in 1998. There are retired professional athletes younger than that. Under the modern standard, plaintiffs are expected to demonstrate not just an attempt to consolidate monopoly-style power, as it actually says in the text of the law, but to further prove an anti-competitive effect. To meet this exceptionally high burden of proof,

it's not even enough to show that a company exercised monopoly power to hurt their competitors. That's just the first step. You then have to convince a judge that the company knowingly acted unfairly, and that its negative actions outweighed any potential good that the company may have done through these same practices. And even if you can actually prove all of that in court, many conservative judges will still find new and exciting ways to let companies off the hook, often by narrowing their definitions of the relevant market or just ignoring parts of the argument that they don't particularly care for.

Imagine if, to charge a guy with drunk driving, you had to not only show that he got behind the wheel drunk, but that he started off the evening planning to drive drunk and that the harm experienced by the three people he almost hit with his car outweighs the benefit experienced by the three people he almost hit with his car outweighs the benefit experienced by the two people he gave a lift home to. Also, imagine that you're making this argument

in a world where a big chunk of judges think driving after a few beers is like totally cool, bro. And you start to understand the ridiculous stifling effect we're putting on prosecutors who have to fight against monopolies. Bear in mind too, Congress also does everything it can to limit the ability of states and individuals to bring their own Section 2 cases,

especially via class action suits. As a result of massively significant sea changes like these, more than 75% of US industries have become more concentrated and consolidated over the last few decades. It started in manufacturing, media, banks, and retail, but has since spread to tech, telecommunications, defense, and agriculture. America currently leads the world

in merger and acquisition activity, accounting for nearly half of the $5.8 trillion in global deal-making in 2021. In 2019, the National Bureau of Economic Research found a significant increase in what they call negative concentration, meaning consolidation within an industry that's paired with weaker productivity and declining rates of investment. Telephone and broadband services are good examples here. The industry has become significantly

more consolidated over time. And as a result, US consumers pay nearly twice as much for phone and internet services as residents of other developed countries. So along with paying a lot for subscription services like HBO Max, we also pay even more for cable companies

to enjoy such blood chilling scenes as this. Really just incredible how they took a subtle idea like a nun roaring like a lion before exploding a mirror and somehow made it shocking, masterful filmmaking. Anyway, in the 1990s, the US was more competitive than Europe in this sector. But now European markets have lower excess profits and fewer barriers to entry. And crucially, this was no accident. In France,

there was an oligopoly in phone service with just three carriers functionally controlling the entire telecom industry. But it was broken up in 2011 when a new operator was granted a license and prices dropped by 50% within just two years. Presidents Obama and Trump both spoke frequently about the importance of antitrust actions, but neither one ended up with a strong enforcement record. In fact, despite rhetoric that sometimes almost kind of sounded a bit like trust-busting populism, Donald Trump's nominees for key antitrust positions

all hewed to the traditional Chicago school point of view. In 2017 and 2018, Trump's administration didn't open a single investigation into a monopoly, the longest dormant period in over 50 years. But also, in fair and balancednessfulness, the actual antitrust enforcement record from the second half of the Trump years sure looks a lot like the same period under Obama. Back in 2013, the Obama administration threatened to block a mega merger between American Airlines and US Airways,

arguing that increased consolidation between airlines was already hurting passengers, leading to increased fares, new fees on travelers, and downgraded amenities. A government study had also concluded that the airlines could survive on their own, as US Airways reported record profits in 2012. But following an intense lobbying campaign

by the airline industry, spearheaded by former White House Chief of Staff, Rahm Emanuel, Obama's DOJ backed down. And what do you know? Post-merger, American Airlines raised fares and eliminated a popular discount program. All in all, the Obama administration approved three airline mergers.

And today, four companies control up to 80% of the market. That's bad. Unthanks Obama. As a response to things obviously getting a whole lot worse quickly over the last few years, some of the attitudes among professors and economics experts are actually starting to shift. A group of scholars known as the New Brandeis School,

after famed progressive era reformer and Supreme Court Justice Louis Brandeis, has emerged pushing for a more aggressively anti-monopoly agenda and questioning the wisdom of the approach that has brought us to this point. So now at least we can start to acknowledge basic economic arguments that have been understood in principle for centuries.

Less competition means less innovation, less investment in research and development and fewer new productions. Also, Bitcoin is definitely going to go up forever. When US companies grow too large, they have the power to artificially keep wages low and prices high. Most Americans now have a choice

between just one or two internet providers. Two hospital systems exclusively control a huge number of major markets. Home Depot and Lowe's are the only two options in a lot of communities where you absolutely need to buy a plank of wood to demonstrate that you are a big strong man. Regional pharmacy chains have virtually disappeared

and I could keep going. You know I could. You know deep in your gut and or genitals that this is a problem that no one is really addressing. If a company knows they're the customer's only option, why the heck would they try to improve their business? Why would Amazon, for example, really feel the need to treat their employees better, or work to accommodate smaller vendors, or give us more seasons of Bosh? Seven isn't enough, you fucks! I need forever Bosh!

Enough you fucks, I need forever Bosch. Except, hey, good news. Maybe someone is finally going to address this. And in a plot twist that rivals anything the WB could put out, that person might be, ba-ba-bum, Joe Biden? Huh, well, I guess we'll have to tell you about that after some ads, which is short for additional messages from companies paying us for advertising space. Okay, don't forget to lick.

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It's time for good news now, though, as I promised. Remember that new line of thinking I mentioned, the one that pushed a stronger anti-monopoly agenda? Well, it seems the Biden administration actually, maybe, possibly, might be roughly aligned with this new line of thinking and has added a few aggressive antitrust crusaders in high ranking positions.

A while back, we mentioned Jonathan Cantor, who currently leads the DOJ's antitrust division. He spent years in the private sector fighting tech giants, like the company formerly known as Facebook. Not sure what it's called now. We'll not be looking it up. But you know, they're the ones who are working on that cutting edge virtual reality something-verse software that just figured out human beings have legs. Those guys. Tim Wu, a longtime proponent of breaking up that very same cartoon leg conglomerate, served as a special assistant to the president

on technology and competition policy before returning to his post at Columbia Law School earlier this year. The new FTC chair, Lena Kahn, personally helped to reframe the academic debate over antitrust legislation. In early 2017, while she was still a student, she published a paper called Amazon's Antitrust Paradox in the Yale Law Journal that made the case against the Chicago School, presenting Amazon

as a prime example of a company that had continued to offer low prices, but nevertheless exerts monopolistic power over entire sectors of the U.S. economy. Amazon, Kahn argued, can afford to forego profits in order to aggressively collect consumer data, which it then exploits against its rivals. Along with Amazon's advantages in shipping and warehouse infrastructure, this gives the company a level of power that you just can't summarize by looking at basic metrics like market share. Even companies that are direct rivals to Amazon in some sectors have no choice

but to collaborate with them in order to survive. Kahn's paper was the academic equivalent of a best-selling airport read. It's the terminal list of economic papers in that there's no way Chris Pratt actually got through the whole thing, but he'll pretend he did if you ask him about it.

And it helped to inspire a new train of thought from Chicago school critics who became the new Brandeis school, presumably because money train was already taken. There are also a few small signs that we may have some actual consensus building around some of these issues. Again, very small signs, at least regarding big technology companies

who thankfully have made powerful enemies across the entire American political map. Two top members of the House Judiciary Antitrust Subcommittee, Democratic Chairman David Cicilline and Republican ranking member Ken Buck actually seem to agree that bipartisan reforms to break up technology companies are needed. They're not totally aligned on how to actually get it done,

but still, that's something. Start. In fact, according to researchers at George Mason University, antitrust policy has undergone more significant changes during the first year of President Biden's administration than in the most recent five decades combined. In January of this year, Bloomberg Law reported that Biden's FTC,

in a break with recent tradition, has started scrutinizing mergers between private equity and venture capital firms. Typically, these investigations would focus exclusively on conflicts of interest created by the deal, like an overlap in business interests among the companies in which the funds are invested. impact non-compete agreements or employee plans for unionization, executive compensation, and other activities that might lead to anti-competitive behavior down the road. Or just take the publishing industry, where the Big Five release 80% of all trade books in the US. Biden's DOJ sued to prevent two of those companies, Penguin Random House and Simon & Schuster,

from further consolidating. Penguin Random House, which & Schuster, from further consolidating. Penguin Random House, which you'll note is already the names of two different companies just awkwardly mashed together, controls 25% of the U.S. publishing market share all on its own as of 2020, the largest chunk of any single company. The deal started moving forward in 2020 with the assumption that Trump's business-friendly administration wouldn't challenge it. And we know that's what the principals involved thought at the time because Simon & Schuster CEO Jonathan Karp

said so in an email to author John Irving, writing, quote, I'm pretty sure the Department of Justice wouldn't allow Penguin Random House to buy us, but that's assuming we still have a Department of Justice. Ah, sick joke. Authoritarianism, am I right, folks? Take my freedoms, please.

But in a really helpful example of how different regulators can actually make a real world difference, one that's so stark, it's almost like they knew some guy would come along in a few years and make a comical little video essay about it, Biden's Department of Justice actually did follow through arguing that the deal would harm authors,

particularly those of top selling books. The Justice Department estimates that a combined Penguin Random House and Simon & Schuster would control 49% of the most anticipated best sellers. So the government argued in this case that the new company would be a monopoly, an unfair buyer's market that will drive down prices for the authors writing the books.

Ultimately, the deal was struck down in court. It's dead, deader than an industry being swallowed by Amazon. Of course, even with the Biden administration's actual attempts and successes to do the right thing, these executive orders, appointments, and enforcement actions on their own can only go so far. Congress could actually make new laws to grant regulators more actual powers

if they weren't completely overwhelmed right now battling the woke invasion in our schools, of course. Gah, important stuff. Our major antitrust laws were written more than a century ago, so they just don't take into account a lot of modern aspects of doing business, like say the internet or global shipping or not having to crank up your electronic devices to make them start. Even our current regulators work was held up for nearly a year while they waited for politicians to get around to approving Biden's nominations.

Amazon's $8.5 billion takeover of MGM, the company's second largest acquisition in history behind its 2017 purchase of Whole Foods, was under fire from anti-monopoly groups, but the regulatory period straight up expired while the FTC was stuck in a two to two partisan deadlock. Sorry, James Bond, you're going on adventures with Mrs. Maisel now.

Nothing to be done about that. The Marvelous Mr. Bond. Both the Senate and House antitrust subcommittees have considered, and in some cases, even approved several bills that would help move the regulatory ball forward. But they're all either stalled out or waiting to be added to the legislative calendar. The bipartisan Competition

and Transparency in Digital Advertising Act would force Google to break up its ad business and actually counts professional internet meme and part-time Senator Ted Cruz among its sponsors. It's been referred to the main Senate Judiciary Committee, but hasn't yet received a vote. The Senate Judiciary Committee voted to advance the American Innovation and Choice Online Act back in January, which would prohibit big tech platforms like Amazon, Apple, and Google from discriminating against other businesses that rely on their services.

But it hasn't yet come up for a full vote. The Open App Markets Act was approved by the Judiciary Committee and has actually made it onto the Senate's legislative calendar, but hasn't really moved forward at all since March. This bill bars app marketplaces from requiring developers

to use their preferred payment system or forcing them to offer a consistent price point across all other sales platforms. And in October, the House passed a package of three bipartisan antitrust bills by a 242 to 184 vote. That includes the Merger Filing Fee Modernization Act, which forces companies to foot more of the bill for these expansive government investigations

into whether or not they're going to screw us over. There's also the Foreign Merger Subsidy Disclosure Act, which requires merging companies to disclose any support they're currently getting from foreign governments. And the State Antitrust Enforcement Venue Act, which removes barriers to states when enforcing federal antitrust laws. These all sound like pretty good ideas,

and theoretically, the Senate could take them up and pass them at any time. So good luck with that. We'll wait right here. In the meantime, other positive steps can still be taken like Biden's executive order from July, 2021, which encouraged federal agencies to take a variety of actions on behalf of consumers,

from cracking down on high ocean shipping fees to allowing hearing aids to be sold over the counter. Still, Congress does put a natural limit on how far Brandon can really go, even in dark mode. As with just about everything else, the solution is about chipping away at the problem piece by piece, rather than decimating it entirely with one punch. That's everything from you and I choosing which businesses to support to lawmakers making incremental progress. It's not Godzilla distributed by Warner Brothers

taking on this tower of industry. No, it's actually a bunch of cute little tinier Godzillas gradually working on the foundations, gunking up the gears, hiding in the salad bar, turning into a bat and attacking a man on the street, hiding in a cooking pot, and then bursting out on a lady during a cooking show, all fucking covered in noodles and shit. See, because while this problem spans so many industries

and can often seem abstract, that's why we wanted to focus on this 1WB merger, because it's a very clear example of how the corporate world when given too much power can make our lives worse. Art is probably the most clear antithesis of business, representing human behavior, the surreal and intangible and beautiful, and therefore the factor that companies like Amazon

and Disney and Warner Brothers can't understand. It's why they make endless sequels, suppress directors and writers' visions, and glom onto the superficial factors of a film's success. A film like Gremlins, whose sequel can be summed up in a single quote from a single scene. You know, when art and business join forces, anything can happen.

That line is not being said by the artist in the scene, but the businesswoman trying to take advantage of the artist. And that is ultimately the thesis of Gremlins 2, an American classic. That much like combining water and mogwai, combining business and art most often will result in a cheapened and hollow product, doomed to fall apart, at least eventually, to the disappointment of fans. The same way Gizmo is bullied by the resulting gremlins,

art is tortured by the greed of these companies. The same way any product becomes marginalized when provided by a company so big that it doesn't need to respect its customers. And this is where I tell you that they are in fact, working on a third Gremlins film, a soft reboot or sequel of course, that according to the lead actor will quote, "'Undo the Gremlins 2 thing.'"

He added that Warner Brothers definitely wants it because of course they do. And so instead of getting the message, the business ghouls looked at their property and figured they could squeeze some more nostalgia bucks from it. It's funny, I look at him, you know what I see? What's that, sir?

Dolls with suction cups staring out car windows. A big float in the Macy's Day Parade. Has anybody ever talked to you about merchandising? Because when art and business join forces, not everything can happen. Just one specific thing happens, which is that the art gets fucked. Anyway, my point here is that we see,

with Warner Brothers specifically, what happens when corporations get their say. So maybe we should work on changing the balance of power. And like, I don't know, let's skip this third Gremlins film when it comes out. I mean, unless it looks good. It could be good, I guess, actually. Now that we're talking about it,

I'm getting pretty excited about it. I wonder if they'll get Hulk Hogan back. He'll like, he'll fuck Gizmo's wife on camera. And then the shop owner will, he'll sue whoever released the video. It's a reference to a video we did recently. Anyway, Gremlins. And Gremlins 2.

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Cute little guys, not like mogwai cute, more like demon puppet cute, but still cute. Anyway, we got a podcast called even more news and this show as a podcast. If you prefer that way of consuming this show. And I'm going to sort of like power down.

I'm going to lose some steam. There's nothing else to say about this. Like and subscribe, do all that kind of stuff. So I'm just going to sort of trail off and then maybe. do all that kind of stuff so i'm just going to sort of trail off and then maybe