Hollywood is about to have its biggest crossover yet.
Even though Netflix seemingly won the bidding war for Warner Bros. Discovery (WBD) back in December, Paramount Skydance has finally increased their bid to an unimaginable $110 billion (roughly $31 a share) to purchase all of WBD; that includes the studio itself, its library of intellectual properties (IP), its linear TV networks like TNT and the Discovery Channel, and multimedia news corporation CNN. Netflix declined to match Paramount’s bid, officially stepping out of the war and leaving Paramount as the last man standing to purchase Warner Bros. Discovery.
Netflix co-CEO Ted Sarandos gave a statement about the loss, explaining that, “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” Interestingly, Netflix never intended to purchase the entirety of the company like Paramount; instead, Netflix paid $82.7 billion to own just the studio and its library of IP’s. The reason Paramount had to pay so much more is because they were interested in the entire corporation.
The merger has seen an immense amount of opposition for several reasons; firstly, the merger will heavily affect available industry jobs. Now that two of the biggest and most prestigious studios are about to become one, there is about to be a drastic shrinkage of jobs in an industry where healthy, reliable income is already hard to come by. All jobs are affected by this, including camera crews, marketing, set design, and craft services. Paramount Skydance chairman and CEO David Ellison tried to settle these qualms recently in a call with Wall Street media analysts and explain his intent to cut as few labor roles as possible, saying, “It’s important to note that the majority of our synergy target comes from non-labor sources among the efficiencies we have identified.”
With such a powerful pair of studios suddenly becoming one, concerns about monopolies and federal regulations have also been raised. Paramount is currently under investigation by the US government to determine whether this merger would be unlawfully monopolistic; President Trump has made numerous comments on the merger, but his most recent statement indicated his preference to “stay out of it”. State governments, namely the Justice Department of California, have also begun to interfere in the name of monopoly prevention. Paramount may have defeated Netflix in the bidding war, but it still faces the uphill battle of regulatory scrutiny. The government’s concerns are perfectly valid; after all, if this deal were to go through, Paramount would be dangerously large and influential.
A major example of how much influence Paramount now has is the amount of news coverage it owns. As mentioned before, Paramount acquired CNN in this purchase, rendering the media company a sister corporation of the Paramount-owned CBS News. CBS News has recently faced allegations of biased news coverage in favor of President Trump, and this purchase now warrants a major concern that CNN will follow a similar path. Unless you’re standing next to a Captain’s Log newspaper stand, it can be difficult to find unbiased, high-quality journalism in this day and age; a common argument against the merger has been the amount of news and media that will suddenly be solely controlled by David Ellison. These concerns are definitely warranted, especially given the documented report that Ellison at one point intended to pay with funding from Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi’s L’imad Holding Company, and the Qatar Investment Authority (QIA). There’s no word on how heavily these companies are currently involved with the official $110 billion purchase.
The financial aspect of the WBD purchase has also come into question; Reuters estimates that WBD has debt in the ballpark of $29 billion, and since the purchase, Paramount’s debt is estimated to be around $79 billion. A company that was already dying from a catastrophic amount of debt was just purchased by a company with even more debt; it’s widely speculated that this deal could bankrupt both companies in a number of years, potentially allowing other corporations like Disney, Amazon, or even Netflix to eventually pick through the scraps and buy whatever they like for much cheaper prices. This could include not only any WBD-owned property from CNN to the DC Universe, but any Paramount property such as CBS or “Star Trek”.
In addition to the business and financial aspects of the merger, the general entertainment market will also see drastic changes; firstly, two major kids’ entertainment networks (Paramount-owned Nickelodeon and WBD-owned Cartoon Network) are now corporate siblings, hurting the health and job viability of a market that’s already on its last legs due to alternative child-oriented entertainment like YouTube. Ellison also announced his intention to merge WBD’s HBO Max with Paramount+ if the deal successfully closed; in doing so, he would be creating a streaming service that has both WBD-owned IP like “Friends”, “Harry Potter”, “The White Lotus”, “The Big Bang Theory”, “Game of Thrones”, and DC alongside Paramount content such as “Yellowjackets”, “Star Trek”, “Scream”, “Mission: Impossible”, and “South Park”. While there’s been no official word yet, there has been immense speculation that such a large, content-packed service could see a dramatic price increase.
As Netflix recently learned, WBD has no guaranteed future and everything is still very much up in the air; however, it’s entirely possible that a WBD-Paramount merger could devastate the industry, build an unfavorable monopoly, and bankrupt two of the oldest and most storied studios in Hollywood.
