Posted on 11/14/2023 1:10:36 PM PST by nickcarraway
Texas congressman Joaquin Castro calls for the Justice Department and Federal Trade Commission to look into whether the studio violated antitrust guidelines in tax write-off plan: "It's predatory and anti-competitive."
A congressman is calling for a federal investigation of Warner Bros. for its handling of Coyote vs. Acme.
Texas Rep. Joaquin Castro took to X to blast the studio for its original plan to shelve the movie for a tax break.
“The WBD tactic of scrapping fully made films for tax breaks is predatory and anti-competitive,” the San Antonio Democrat wrote. “As the Justice Department and revise their antitrust guidelines they should review this conduct. As someone remarked, it’s like burning down a building for the insurance money.”
Warners has since reversed its decision amid industry backlash and decided to try and shop the film to other studios and streamers. But the studio previously went through with shelving movies for tax write-offs last year with the movies Batgirl and Scoob! Holiday Haunt.
Castro has been vocal on antitrust issues in media and entertainment. In April, he called on the competition enforcers to reassess Discovery’s merger with AT&T’s WarnerMedia. This followed 30 members of Congress warning that the resulting competition vacuum would harm workers and consumers, as well as reduce diverse programming — which became a common criticism after the company canned its $90 million HBO Max film Batgirl, the first DC movie led by a Latina, for the tax write-off.
In a letter to the Justice Department, Castro previously wrote that the deal enabled Warner Bros. Discovery to “adopt potentially anticompetitive practices,” including “product cancellations.”
“The damage to content creators whose projects are cancelled in deep development and post-production cannot be overstated,’ stated the April 7 letter. “Such cancellations stain these projects, making them less appealing and marketable to other buyers — consumers will likely never be able to watch shows purchased then cancelled by WBD. WBD’s conduct amounts to a de facto ‘catch and kill’ practice, vastly limiting consumer choice.”
Under current merger guidelines, a consideration of whether a deal is approved is if it will incentivize a company to “withdraw a product that a significant number of customers strongly prefer.” Castro, in his comments over the shelving of Coyote vs. Acme, could be alluding to the absence of competition in Hollywood that allows WBD to make unpopular moves without harm to its bottom line.
The call for an investigation is the latest twist in the almost cartoon-like saga of the live-action/animation hybrid Coyote vs. Acme, which went from just another title on Warners’ slate to the most talked-about movie in Hollywood thanks to the studio’s initial effort to scrap the project.
Unlike Batgirl and Scoob! Holiday Haunt, however, Coyote vs. Acme is entirely finished, and had a successful audience screening where its test scores were in the 90s. Supporters of the project applied pressure to the studio to change last week’s decision, with some creatives even canceling meetings with the company in protest. “I don’t know how you see the movie and then go, ‘That couldn’t happen to me,’” No One Will Save You filmmaker Brian Duffield previously told THR.
Now the studio will now allow director Dave Green to shop the project, though it’s not yet clear what price Warner Bros. will set for the title given its potential value as a tax write off that would help offset the movie’s $70 million budget.
Coyote vs. Acme follows the speechless and hapless Wile E. Coyote as he teams up with a lawyer (Will Forte) to fight the ACME corporation. Just like in the cartoons, Coyote buys ACME devices to try and kill Road Runner, but they never work properly, causing him to embark on a quest to take down the company instead.
Is what they’re doing illegal under existing tax code?
No?
So what. This is a stupid distraction and makes Republicans look foolish to waste time like this.
No Republican involvement so rest easy.
Thanks, that’s even better! ROFL
Just like commercials now where virtually every couple is mixed. I don't care about mixed couples. Works for them, works for me. What I do care about are the clymers who make these commercials because they think we're such troglodytes—unlike their enlightened selves, of course—that they have to slam mixed couples down our throats at every opportunity.
Hollywood is infamous for “Hollywood accounting”, where they make even wildly successful movies appear to have lost money, in order to stiff people who are owed a share of profits.
These same techniques can likely produce hugely inflated tax writedowns.
Thanks for the explanation…
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