As Democrats scrambled to shore up support for Kamala Harris, two megadonors openly challenged one of the core tenets of Joe Biden’s agenda, to rein in corporate power, in a move that could prove to be bitterly divisive within the party if Donald Trump is defeated in November.
On July 25, LinkedIn co-founder Reid Hoffman went on CNN to call for the vice president, if she is elected, to oust Federal Trade Commission chair Lina Khan, who he said is operating “outside the scope” of her job. “Antitrust is fine,” said Hoffman, who has donated $7 million to a Democratic super PAC and sits on the board of Microsoft, a tech giant whose acquisition of Activision was challenged by the FTC. “Waging war is not.”
A day later, IAC media mogul and former Ticketmaster chair Barry Diller offered another glimpse into corporate America’s perspective on merger regulation under Khan. Asked on CNBC if he would lobby Harris to replace her, he replied, “Yeah, I would. I think she’s a dope.” His answer speaks to the distaste of Wall Street and Silicon Valley for contraction and heightened scrutiny of dealmaking over the past four years — an issue that has divided Hollywood’s unions and studios over concerns related to media consolidation. Quietly operating within that schism are Hollywood lobbyists, who have been blitzing lawmakers amid a contentious dispute that could spill over into the next administration and shape the future of the industry.
In candid conversations with The Hollywood Reporter, representatives familiar with lobbying efforts of writers, directors, producers and actors say the groups are vocal about the state of competition in Hollywood. At the top of their concerns: tech monoliths blurring the separation of studios and distributors that have encroached upon the industry. Recently, the Directors Guild convened with the antitrust division of the Justice Department, headed by Jonathan Kanter — another target of ire by some ultrarich M&A-friendly Democrats. “We’re concerned,” says DGA executive director Russell Hollander. “For some reason, antitrust has not applied to the tech companies.”
The 12-year period between 2009 and 2020 saw more than $400 billion in media and consumer telecommunications megamergers. Five transactions make up a bulk of that figure — Comcast and NBCUniversal (2011); AT&T and DirecTV (2015); AT&T and Time Warner (2018); Charter, Time Warner Cable and Bright House (2016); and Disney and Fox (2018). This wave of consolidation, as well as deregulation, has eroded talent-side leverage, the Writers Guild has said.
Producers, who have seen their profit participation and salaries chipped away during negotiations with studios that are increasingly distributing their own content, are similarly frustrated. The Producers Guild has created an internal task force exploring competition issues in the industry, according to people with knowledge of the situation. It also hosted antitrust activist Matt Stoller for a conversation with president Donald De Line that was attended by representatives of other guilds and unions.
Some of these groups, namely the WGA, have been pushing lawmakers to consider reinstitution of a new version of Financial Interest and Syndication Rules, which were aimed at preventing the major TV networks from monopolizing the broadcast market by barring them from owning the content they aired during primetime hours. (They were eliminated in 1993 during a wave of deregulation directed years earlier by then-President and ex-SAG chief Ronald Reagan.)
“We have and continue to call for that type of action in our industry,” says Laura Blum-Smith, the Writers Guild of America West’s director of research and public policy. “These are the kinds of conditions where the government has previously intervened.”
For the unions, longtime allies and staunch supporters of Biden, antitrust acts as a medium to address labor issues. The WGA and SAG-AFTRA last year backed changes to merger guidelines that account for a proposed deal’s impact on working conditions and welcomed Khan to their picket lines when they were on strike. Unions are positioned to take on even more significance in keeping Khan as head of the FTC and how Harris responds to efforts to reject some of Biden’s more populist policy positions. A drift away from the pillar of this administration’s antitrust policy — and toward big-money interests — could hurt her candidacy with labor unions.
Guilds may have reason for concern. Harris’ inner circle of advisers includes her sister, Maya Harris, whose husband, Tony West, is an influential voice in Silicon Valley as a fundraiser for Democrats and engineered Uber’s campaign against organized labor; Eric Holder, who represents corporations at white-shoe firm Covington & Burling and is vetting her running-mate pick; and Karen Dunn, an Obama administration alumnus with ties to Google, Amazon and Apple. Financial Times reported July 27 that unnamed “outside campaign advisors” for Harris have teased the possibility of de-escalating competition enforcement.
The Motion Picture Association, the trade group representing studios, have clashed with Hollywood’s unions and guilds on antitrust and labor issues. In June, it wrote to the Federal Communications Commission that competition in the market is robust. The interests of at least one of its members, Warner Bros. Discovery, have largely been directed toward electing a business-friendly president.
“We just need an opportunity for deregulation, so companies can consolidate and do what we need to to be even better,” WBD boss David Zaslav told Bloomberg while in Sun Valley. The company may be looking for buyers with the expiration of its two-year lockup period preventing it from engaging in larger deals, but the scale of such a merger would almost certainly draw a lawsuit from competition enforcers unless they are ousted.
And the question of whether Trump will take a more lax approach to merger enforcement has emerged as a talking point. J.D. Vance, his running mate, has previously split from his Republican colleagues and backed Khan, who he said in February is “doing a good job.” Notably, Trump’s Justice Department sued to block AT&T’s $85 billion takeover of Time Warner in the first lawsuit challenging a vertical merger — when two companies that don’t compete directly against each other but are in related industries (think a manufacturer and distributor) — in more than 40 years.
As Hoffman, Diller and other Silicon Valley and Wall Street megadonors circle the wagons to influence Harris’ policy positions, there may be more of a push by Hollywood unions and studios to leverage their political capital to advance their interests in merger enforcement. There’s anxiety on both sides. “Under this administration, the FTC is making bold comments,” SAG-AFTRA general counsel Jeffrey Bennett says. “Are those the same comments we’ll get from a different one? I don’t know. It could change everything.”
This story appeared in the July 31 issue of The Hollywood Reporter magazine. Click here to subscribe.