The water that flows down irrigation canals to some of the West’s biggest expanses of farmland comes courtesy of the federal government for a very low price — even, in some cases, for free.

In a new study, researchers analyzed wholesale prices charged by the federal government in California, Arizona and Nevada, and found that large agricultural water agencies pay only a fraction of what cities pay, if anything at all. They said these “dirt-cheap” prices cost taxpayers, add to the strains on scarce water, and discourage conservation — even as the Colorado River’s depleted reservoirs continue to decline.

“Federal taxpayers have been subsidizing effectively free water for a very, very long time,” said Noah Garrison, a researcher at UCLA’s Institute of the Environment and Sustainability. “We can’t address the growing water scarcity in the West while we continue to give that water away for free or close to it.”

The report, released this week by UCLA and the environmental group Natural Resources Defense Council, examines water that local agencies get from the Colorado River as well as rivers in California’s Central Valley, and concludes that the federal government delivers them water at much lower prices than state water systems or other suppliers.

The researchers recommend the Trump administration start charging a “water reliability and security surcharge” on all Colorado River water as well as water from the canals of the Central Valley Project in California. That would encourage agencies and growers to conserve, they said, while generating hundreds of millions of dollars to repair aging and damaged canals and pay for projects such as new water recycling plants.

“The need for the price of water to reflect its scarcity is urgent in light of the growing Colorado River Basin crisis,” the researchers wrote.

The study analyzed only wholesale prices paid by water agencies, not the prices paid by individual farmers or city residents. It found that agencies serving farming areas pay about $30 per acre-foot of water on average, whereas city water utilities pay $512 per acre-foot.

In California, Arizona and Nevada, the federal government supplies more than 7 million acre-feet of water, about 14 times the total water usage of Los Angeles, for less than $1 per acre-foot.

And more than half of that — nearly one-fourth of all the water the researchers analyzed — is delivered for free by the U.S. Bureau of Reclamation to five water agencies in farming areas: the Imperial Irrigation District, Palo Verde Irrigation District and Coachella Valley Water District, as well as the Truckee-Carson Irrigation District in Nevada and the Unit B Irrigation and Drainage District in Arizona.

Along the Colorado River, about three-fourths of the water is used for agriculture.

Farmers in California’s Imperial Valley receive the largest share of Colorado River water, growing hay for cattle, lettuce, spinach, broccoli and other crops on more than 450,000 acres of irrigated lands.

The Imperial Irrigation District charges farmers the same rate for water that it has for years: $20 per acre-foot.

Tina Shields, IID’s water department manager, said the district opposes any surcharge on water. Comparing agricultural and urban water costs, as the researchers did, she said, “is like comparing a grape to a watermelon,” given major differences in how water is distributed and treated.

Shields pointed out that IID and local farmers are already conserving, and this year the savings will equal about 23% of the district’s total water allotment.

“Imperial Valley growers provide the nation with a safe, reliable food supply on the thinnest of margins for many growers,” she said in an email.

She acknowledged IID does not pay any fee to the government for water, but said it does pay for operating, maintaining and repairing both federal water infrastructure and the district’s own system.

“I see no correlation between the cost of Colorado River water and shortages, and disagree with these inflammatory statements,” Shields said, adding that there “seems to be an intent to drive a wedge between agricultural and urban water users at a time when collaborative partnerships are more critical than ever.”

The Colorado River provides water for seven states, 30 Native tribes and northern Mexico, but it’s in decline. Its reservoirs have fallen during a quarter-century of severe drought intensified by climate change. Its two largest reservoirs, Lake Mead and Lake Powell, are now less than one-third full.

Negotiations among the seven states on how to deal with shortages have deadlocked.

Mark Gold, a co-author, said the government’s current water prices are so low that they don’t cover the costs of operating, maintaining and repairing aging aqueducts and other infrastructure. Even an increase to $50 per acre-foot of water, he said, would help modernize water systems and incentivize conservation.

A spokesperson for the U.S. Interior Department, which oversees the Bureau of Reclamation, declined to comment on the proposal.

The Colorado River was originally divided among the states under a 1922 agreement that overpromised what the river could provide. That century-old pact and the ingrained system of water rights, combined with water that costs next to nothing, Gold said, lead to “this slow-motion train wreck that is the Colorado right now.”

Research has shown that the last 25 years were likely the driest quarter-century in the American West in at least 1,200 years, and that global warming is contributing to this megadrought.

The Colorado River’s flow has decreased about 20% so far this century, and scientists have found that roughly half the decline is due to rising temperatures, driven largely by fossil fuels.

In a separate report this month, scientists Jonathan Overpeck and Brad Udall said the latest science suggests that climate change will probably “exert a stronger influence, and this will mean a higher likelihood of continued lower precipitation in the headwaters of the Colorado River into the future.”

Experts have urged the Trump administration to impose substantial water cuts throughout the Colorado River Basin, saying permanent reductions are necessary. Kathryn Sorensen and Sarah Porter, researchers at Arizona State University’s Kyl Center for Water Policy, have suggested the federal government set up a voluntary program to buy and retire water-intensive farmlands, or to pay landowners who “agree to permanent restrictions on water use.”

Over the last few years, California and other states have negotiated short-term deals and as part of that, some farmers in California and Arizona are temporarily leaving hay fields parched and fallow in exchange for federal payments.

The UCLA researchers criticized these deals, saying water agencies “obtain water from the federal government at low or no cost, and the government then buys that water back from the districts at enormous cost to taxpayers.”

Isabel Friedman, a coauthor and NRDC researcher, said adopting a surcharge would be a powerful conservation tool.

“We need a long-term strategy that recognizes water as a limited resource and prices it as such,” she wrote in an article about the proposal.

The sale of Warner Bros. — whether in pieces to Netflix or in its entirety to Paramount — is stirring mounting worries among Hollywood union leaders about the possible fallout for their members.

Unions representing writers, directors, actors and crew workers have voiced growing concerns that further consolidation in the media industry will reduce competition, potentially causing studios to pay less for content, and make it more difficult for people to find work.

“We’ve seen this movie before, and we know how it ends,” said Michele Mulroney, president of the Writers Guild of America West. “There are lots of promises made that one plus one is going to equal three. But it’s very hard to envision how two behemoths, for example, Warner Bros. and Netflix … can keep up the level of output they currently have.”

Last week, Netflix announced it agreed to buy Warner Bros. Discovery’s film and TV studio, Burbank lot, HBO and HBO Max for $27.75 a share, or $72 billion. It also agreed to take on more than $10 billion of Warner Bros.’ debt. But Paramount, whose previous offers were rebuffed by Warner Bros., has appealed directly to shareholders with an alternative bid to buy all of the company for about $78 billion.

Paramount said it will have more than $6 billion in cuts over three years, while also saying the combined companies will release at least 30 movies a year. Netflix said it expects its deal will have $2 billion to $3 billion in cost cuts.

Those cuts are expected to trigger thousands of layoffs across Hollywood, which has already been squeezed by the flight of production overseas and a contraction in the once booming TV business.

Mulroney said that employment for WGA writers in episodic television is down as much as 40% when comparing the 2023-2024 writing season to 2022-2023.

Executives from both companies have said their deals would benefit creative talent and consumers.

But Hollywood union leaders are skeptical.

“We can hear the generalizations all day long, but it doesn’t really mean anything unless it’s on paper, and we just don’t know if these companies are even prepared to make promises in writing,” said Lindsay Dougherty, Teamsters at-large vice president and principal officer for Local 399, which represents drivers, location managers and casting directors.

Dougherty said the Teamsters have been engaged with both Netflix and Paramount, seeking commitments to keep filming in Los Angeles.

“We have a lot of members that are struggling to find work, or haven’t really worked in the last year or so,” Dougherty said.

Mulroney said her union has concerns about both bids, either by Netflix or Paramount.

“We don’t think the merger is inevitable,” Mulroney said. “We think there’s an opportunity to push back here.”

If Netflix were to buy Warner Bros.’ TV and film businesses, Mulroney said that could further undermine the theatrical business.

“It’s hard to imagine them fully embracing theatrical exhibition,” Mulroney said. “The exhibition business has been struggling to get back on its feet ever since the pandemic, so a move like this could really be existential.”

But the Writers Guild also has issues with Paramount’s bid, Mulroney said, noting that it would put Paramount-owned CBS News and CNN under the same parent company.

“We have censorship concerns,” Mulroney said. “We saw issues around [Stephen] Colbert and [Jimmy] Kimmel. We’re concerned about what the news would look like under single ownership here.”

That question was made more salient this week after President Trump, who has for years harshly criticized CNN’s hosts and news coverage, said he believes CNN should be sold.

The worries come as some unions’ major studio contracts, including the DGA, WGA and performers guild SAG-AFTRA, are set to expire next year. Two years ago, writers and actors went on a prolonged strike to push for more AI protections and better wages and benefits.

The Directors Guild of America and performers union SAG-AFTRA have voiced similar objections to the pending media consolidation.

“A deal that is in the interest of SAG-AFTRA members and all other workers in the entertainment industry must result in more creation and more production, not less,” the union said.

SAG-AFTRA National Executive Director Duncan Crabtree-Ireland said the union has been in discussions with both Paramount and Netflix.

“It is as yet unclear what path forward is going to best protect the legacy that Warner Brothers presents, and that’s something that we’re very actively investigating right now,” he said.

It’s not clear, however, how much influence the unions will have in the outcome.

“They just don’t have a seat at the ultimate decision making table,” said David Smith, a professor of economics at the Pepperdine Graziadio Business School. “I expect their primary involvement could be through creating more awareness of potential challenges with a merger and potentially more regulatory scrutiny … I think that’s what they’re attempting to do.”

Businessman Brian Kahn has pleaded guilty to conspiracy to commit securities fraud in a case that brought down a hedge fund, helped lead to the bankruptcy of a retailer and damaged West Los Angeles investment bank B. Riley Financial.

Kahn, 52, admitted in a Trenton, N.J., federal court Wednesday to hiding trading losses that brought down Prophecy Asset Management in 2020. The Securities and Exchange Commission alleged the losses exceeded $400 million.

An investor lawsuit has accused Kahn of funneling some of the fund’s money to Franchise Group, a Delaware retail holding company assembled by the investor that owned Vitamin Shoppe, Pet Supplies Plus and other chains.

B. Riley provided $600 million through debt it raised to finance a $2.8-billion management buyout led by Kahn in 2023. It also took a 31% stake in the company and lent Kahn’s investment fund $201 million, largely secured with shares of Franchise Group.

Kahn had done deals with B. Riley co-founder Bryant Riley before partnering with the L.A. businessman on Franchise Group.

However, the buyout didn’t work out amid fallout from the hedge fund scandal and slowing sales at the retailers. Franchise Group filed for bankruptcy in November 2024. A slimmed-down version of the company emerged from Chapter 11 in June.

B. Riley has disclosed in regulatory filings that the firm and Riley have received SEC subpoenas regarding its dealings with Kahn, Franchise group and other matters.

Riley, 58, the firm’s chairman and co-chief executive, has denied knowledge of wrongdoing, and an outside law firm reached the same conclusion.

The failed deal led to huge losses at the financial services firm that pummeled B. Riley’s stock, which had approached $90 in 2021. Shares were trading Friday at $3.98.

The company has marked down its Franchise Group investment, and has spent the last year or so paring debt through refinancing, selling off parts of its business and other steps, including closing offices.

The company announced last month it is changing its name to BRC Group Holdings in January. It did not immediately respond to requests for comment.

At Wednesday’s plea hearing, Assistant U.S. Atty. Kelly Lyons said that Kahn conspired to “defraud dozens of investors who had invested approximately $360 million” through “lies, deception, misleading statements and material omissions.”

U.S. District Judge Michael Shipp released Kahn on a $100,000 bond and set an April 2 sentencing date. He faces up to five years in prison. Kahn, his lawyer and Lyons declined to comment after the hearing.

Kahn is the third Prophecy official charged over the hedge fund’s collapse. Two other executives, John Hughes and Jeffrey Spotts, have also been charged.

Hughes pleaded guilty and is cooperating with prosecutors. Spotts pleaded not guilty and faces trial next year. The two men and Kahn also have been sued by the SEC over the Prophecy collapse.

Bloomberg News contributed to this report.