Nov 15, 2023

Congressman Joaquin Castro Calls for Investigation of WBD's Treatment of "Coyote vs. Acme" Acme

Texas Congressman Joaquin Castro, a Democrat, has called for a federal investigation into Warner Bros. Discovery's destruction of fully complete films for tax credit purposes.

In a social media post, Castro wrote:

The @WBD's tactic of destroying fully produced films for tax credits is predatory and anti-competitive.

The DOJ and @FTC should review this practice when they revise their antitrust guidelines.

As someone said, it's like burning down a building for the insurance money.

Castro's call carries special weight because, as he mentioned in his post, federal investigators have recently filed antitrust lawsuits against other tech, media, and entertainment companies such as Microsoft, Google, and Ticketmaster.

The lawmakers' request seems particularly credible given that this is not the first year that lawmakers have publicly criticized WBD's business practices: in April, Castro, Senator Elizabeth Warren, Congressman David Cicilline, and Congresswoman Pramila Jayapal, asked the Justice Department to investigate the competitive conditions in the labor and consumer markets affected after the Warner Bros. and Discovery merger.

When news of WBD's decision to cancel production of "Coyote vs. Acme" was widely reported last week, there was immediate outrage from the entertainment community, especially the artists who worked on the film. According to The Hollywood Reporter, some filmmakers The Hollywood Reporter reports that some filmmakers have told their agents not to book meetings with WBD.

The studio then reversed its decision to bury the film and allow the filmmakers to sell it to other distributors. How that will affect the Justice Department's intervention remains to be seen.