Angst turns to anger in Hollywood as Netflix hooks Warner Bros.

Los Angeles -- In October, when Warner Bros. Discovery hung a "For Sale" sign on itself, Hollywood was sad. Megaproducer Larry Gordon likened the feeling to a death in the family. In group WhatsApp chats, screenwriters used words like "heartbreaking" and "tragic."

Now that a sale has been announced, with Netflix striking an $83 billion deal for the Warner Bros. studio and its sibling streaming service, HBO Max, a different emotion is washing through the entertainment capital: Hollywood is mad.

Jane Fonda raged against a deal in a letter to an entertainment trade news publication, calling the end of a stand-alone Warner Bros. "an alarming escalation in a consolidation crisis that threatens the entire entertainment industry, the public it serves and -- potentially -- the First Amendment itself."

Michael O'Leary, CEO of Cinema United, a trade organization that represents 30,000 movie screens in the United States, called the Netflix acquisition "an unprecedented threat" and vowed to fight it. "Theaters will close, communities will suffer, jobs will be lost," O'Leary said, noting Netflix's policy of giving movies only "token" releases in theaters. (Shares in publicly traded theater chains, including AMC Entertainment, IMAX and Cinemark, fell as much as 8% Friday.)

"This merger must be blocked," the Writers Guild of America, which represents more than 12,000 screenwriters, said in a statement. "The world's largest streaming company swallowing one of its biggest competitors is what antitrust laws were designed to prevent." The Teamsters' motion picture division also demanded that "all levels" of government "reject this deal."

Netflix insisted Friday that it would honor the Warner Bros. business model -- that it would continue to release movies in theaters for exclusive runs. "It's not like we have this opposition to movies into theaters," Ted Sarandos, Netflix's co-CEO, said on a conference call with investors.

"Right now, you should count on everything that is planned on going to the theater through Warner Bros." to "continue to go to theaters," Sarandos added.

But many people in Hollywood viewed his comments with extreme skepticism. ("Key words: 'right now,'" one agent said.) As recently as April, in response to a question at the Time100 Summit about declines at the overall box office, Sarandos said: "What is the consumer trying to tell us? That they'd like to watch movies at home." He also called theaters "an outmoded idea" for most people.

Entertainment workers in Los Angeles -- camera operators, producers, hairstylists, writers, actors, set designers, editors -- have already been struggling with a contracting job market. As a result of the coronavirus pandemic, two union strikes, an exodus of production to cheaper locales and the rise of artificial intelligence tools, tens of thousands of workers have been laid off by Hollywood companies since 2020.

So on Friday, there was a keen understanding that "consolidation" was just another word for "job loss." It happened in 2019 when Disney bought 21st Century Fox assets from Rupert Murdoch for $71.3 billion. And it happened this year when Skydance Media, led by David Ellison, took over Paramount as part of an $8 billion merger. In October, Paramount began laying off more than 2,000 workers across its movie and television businesses to cut $3 billion in costs.

"Repeated consolidation in this industry has already cost so many film and television jobs, and any merger should be evaluated on its impacts on competition and employment," Rep. Laura Friedman, a Democrat whose Burbank congressional district includes many of Southern California's major film institutions, said of the Netflix agreement. "I'll be watching this deal closely to make sure it supports workers in LA."

In Los Angeles, where the local political establishment is overwhelmingly Democratic and pro-labor, leaders were cautious.

"Los Angeles' range of production studios contribute to its status as the shining creative capital of the world," Mayor Karen Bass said in a statement. "As Los Angeles continues fostering an environment that drives our signature industry, we will continue to boost local production and create more jobs and small-business opportunities right here at home."

Katy Yaroslavsky, a Los Angeles City Council member whose district includes the offices of the Writers Guild, the Screen Actors Guild-American Federation of Television and Radio Artists and several production studios, said she was focused "on what this deal means for production in Los Angeles."

"Netflix has been a strong partner to our city, and the entertainment industry supports tens of thousands of good jobs here," she said in a statement. But, she added, "LA's entertainment sector is in crisis, and the question is whether this deal strengthens production here or sends more work elsewhere."

Austin Beutner, a longtime business and civic leader who is challenging Bass for reelection, was even firmer. "I'm concerned about the impact further consolidation will have on jobs in our community," he said.

Privately, City Hall denizens were less guarded.

On one hand, there was some relief in the liberal city that Ellison and his father, Larry, a well-known supporter of President Donald Trump, would not acquire yet another landmark Southern California studio. The Ellisons had been bidding against Netflix for Warner Bros. and HBO Max. (The Ellisons also wanted to buy CNN from Warner Bros. Discovery, but the cable news channel, at least for now, will remain part of a separate corporate entity.)

On the other hand, they noted, the deal is subject to federal regulatory approval and the Trump administration is likely to play a role in any consideration.

Netflix has a lot of jobs here, said a high-level aide to one City Council member, speaking on the condition of anonymity because he did not have the authority to comment publicly on the merger. But, he said, the Federal Communications Commission would have to approve the deal, and the worry would become what Netflix needs to do to appease Trump.

That angst was only magnified on the city's entertainment-heavy Westside, where the news hit like a morning matcha.

Chris Perez, an entertainment lawyer whose firm represents independent and documentary film producers, said his phone had been buzzing nonstop since word of the deal broke. "This is literally the only thing people have been talking about," he said.

A significant concern, Perez said, is the potential impact of an even smaller marketplace for independent and boundary-pushing films. "Where you only have a few buyers, they'd rather have something that's less risky, and you get safer, less controversial content and less experimentation," he said. "Consolidation has the potential to kill creativity."

Michele Mulroney, president of Writers Guild of America West and a screenwriter, called the proposed merger "a disaster." "Netflix's core business relies on all of us sitting on our couches consuming their content, which we already do in large numbers," she said.

"These mergers always promise benefits, but they always deliver diminished competition, lower pay and fewer jobs for workers," she added. "It's a very dismal day."