James Cameron Sounds Alarm Over Netflix-WBD Deal In Letter to Lawmaker

James Cameron is going to bat for Paramount in the bidding war for Warner Bros. Discovery.

In a letter sent to Sen. Mike Lee (R-Utah), Cameron argues that allowing Netflix to purchase the studio will deal a disastrous blow to movie theaters and weaken an essential cog of the Hollywood machinery in a way that will lead to substantial job losses.

The letter, dated Feb. 10, amplifies concerns from lawmakers and the Justice Department that the potential sale will result in fewer films being released in theaters. While the government’s main focus has been Netflix’s dominance in streaming, it’s also pressed Netflix on what will happen to Warner Bros. movies if it were to acquire the company.

Cameron nods to prior remarks from Netflix CEO Ted Sarandos calling movie theaters an “outdated concept” and an “outmoded idea.”

“The business model of Netflix is directly at odds with the theatrical film production and exhibition business, which employs hundreds of thousands of Americans,” he writes in the missive, first published by CNBC. “It is therefore directly at odds with the business model of the Warner Brothers movie division, one of the few remaining major movie studios.”

Warner Bros. releases roughly 15 movies per year in theaters. Cameron, and others in Hollywood, are concerned that Netflix will lower that figure. “It will be a blow to the exhibition community (theater owners and their tends of thousands of employees) at a critical time to have this production output redirected to streaming,” the letter states.

If movie theaters see less business, the entire industry will suffer, Cameron says. If tentpoles are “no longer green-lit because the market contracts further,” he writes, “then many jobs will be lost.” He adds, “Theaters will close. Fewer films will be made. Service providers such as VFX companies will go out of business. The job losses will spiral.”

Testifying before the Senate subcommittee on antitrust earlier this month, Sarandos committed a 45-day theatrical window when asked by lawmakers of the deal’s impact on theaters.

Color Cameron skeptical. He argues Netflix will likely change course in a few years since theatrical releases fundamentally clash with its business model. The letter states, “What are the teeth in the deal? What administrative body will hold them to task if they slowly sunset their so-called commitment to theatrical releases? But once they own a major movie studio, that is irrevocable. That ship has sailed.”

Cameron also says the pledge doesn’t mean anything unless Sarandos specifies the number of theaters where Warner Bros. movies will be displayed. “Netflix has done only a handful of theatrical releases, and only then under pressure from prestigious filmmakers,” he writes. “But these are usually in a token number of theaters, and are mostly done to qualify for Academy Awards. These releases do not represent the bread-and-butter of the exhibition business.”

Cameron positions Netflix acquiring Warner Bros. as a bad deal for both consumers, who will get to see fewer movies, and filmmakers, who will see fewer choices for studios interested in investing in their projects. One avenue the government could pursue to block the deal is a monopsony theory, or whether the combined company would have too much power over creators and talent.

“I am but a humble movie farmer,” Cameron writes. “And I see my future creativity and productivity directly threatened by this proposed sale.”

In an interview last year on The Town podcast, Cameron endorsed the David Ellison-led company’s bid for Warner Bros. “I think Paramount’s the best choice,” he said. “Netflix would be a disaster. Sorry, Ted, but geez. Sarandos has gone on the record saying theatrical films are dead. ‘Theatrical is dead.’ Quote, unquote.”