We’ve got the news about the next steps for the merger between Paramount Pictures and Warner Bros. Discovery. The US Justice Department has approved the merger according to Politico. They’ve signed off on the Paramount Skydance $111 billion bid for Warner Bros. Discovery. This clears out a regulatory hurdle that wasn’t expected to actually block the merger, considering the people involved on the Paramount side. Its easily the biggest merger of the Trump era in Washington.
This paves the way for Paramount to combine forces with the two titanic media companies that are behind CNN, Warner Bros. Pictures and HBO Max streaming. Here’s what Politico said about the merger.
“After an extensive review, DOJ officials determined the transaction did not pose a threat to competition and declined to challenge it, said the people, who were granted anonymity to discuss sensitive matters. The department approved the merger without requiring any divestitures, behavioral remedies or concessions, according to one of the people.“
The news comes after Netflix decided not to pursue a bid after Paramount kept upping their offer. Paramount CEO David Ellison was in a meeting with the Antitrust Division around two weeks ago. He was pressed during that session with questions about the transaction, its competitive effects, and other concerns they might have had. Ellison’s father, Larry Ellison, the CEO of Oracle, is a longtime friend and ally of President Trump.
This still doesn’t mean that the merger is done and finished though. There are plenty of hurdles that it’ll face going forward in the process. These include state reviews and lawsuits filed to stop the merger from happening by state AGs.
The THS Take – Any Merger Of This Size Is Bad For Business
Listen, some sort of company is going to buy Warner Bros. Discovery. That’s why David Zaslav was put in place when he took over the company, to sell it. It just depends at this point, who will buy it. Paramount buying the company is “better” for theatrical distribution over someone like Netflix. But merging two massive entertainment corporations has gigantic issues that go further beyond the theatrical experience. People are going to lose their jobs. These companies have MASSIVE amounts of debt from previous mergers, so like a bad relationship trying to rekindle it, they’re going to keep splicing together until that debt goes away.
There’s one company in Hollywood that doesn’t operate with a massive amount of debt: Netflix. They make money. These other companies do not technically. Streaming has poisoned the well and created a hole that they have to dig themselves out of. AGs from states like New York and California are going to fight this merger with all they can if they feel like it would be a bad thing for the industry.
Realistically, if the merger goes through and Paramount/WB Discovery is one company. there’s nothing stopping the massive amount of debt they have, and will have, from Netflix just buying them both. So we’ll have to see how this turns out.
Competition in anything is better than having only four or five companies that create entertainment like movies and TV. That doesn’t even count the ramifications of one company owning as many news and local broadcast stations as Paramount would after this.
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Source: Politico
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