There are simply too many companies in the world. Apple, Google, Amazon, Ryanair. I’m probably forgetting some. How could I not? There are so many companies. Thankfully, here in Hollywood, we’re culling the herd. My memory says thanks. My career, on the other hand, does not.
After Disney swallowing up 20th Century Fox (which is now just called “20th Century Studios”, making it sound like a company that makes gramophones), Discovery merging with Warner Brothers, and Skydance buying Paramount, you’d think the industry would be done kneecapping itself through strategic acquisitions. Wrong again, friend. Warner Bros Discovery – swimming in debt and loaded up with depreciating cable TV assets – put itself on the market only three years after its last merger. First they went to Netflix, then to Paramount, after Netflix realized they like profit too much. Now a Paramount-WBD merger is progressing. All of this means one less movie studio, inevitable redundancies and more consolidation of vision.
Paramount’s rather slim merger public relations website declares that this marriage will be a delightful romp for the film industry and for audiences. Makan Delrahim, Paramount’s chief legal officer (who conveniently served in the justice department’s antitrust department under the first Trump administration) told the LA Times in June: “Once you look at it, it’s incredibly pro-competitive. It increases output, it increases jobs, and it lowers the cost to the consumers.” It’s hard to see how combining two companies within the same industry, that do the same thing, won’t lead to job losses. A report from the LA county department of economic opportunity released last month estimated the potential job losses from a Warner/Paramount merger would total about 6,000, with 2,495 just in Los Angeles county.
All of these troubling stats led California and 11 other states to file suit against Paramount to block the merger, despite it sailing through federal review. The European Union is also looking skeptically at the deal, which could delay the merger from going into effect at the September target date. Oh, and the Writers Guild of America is also suing, alleging: “If Paramount succeeds in buying Warner Bros, the merged firm will be the largest buyer of original film and television programming in the United States, eliminating vigorous competition from a major film and television studio that has operated for more than a century.” This merger is looking about as popular as a cyclosporiasis outbreak on a cross-country flight.
Instead of taking the hint, Paramount is continuing to push back on claims the deal will cripple LA’s film industry by … considering another move that would cripple LA’s film industry. The Hollywood Reporter revealed that Tennessee’s deputy governor, Stuart McWhorter, sent a letter to the Paramount CEO, David Ellison, urging him to consider moving his entire operation to his state, citing a “favorable business climate”. An adviser to Ellison told the Hollywood Reporter that “everything is on the table.” A deliciously unsubtle threat.
Considering the sheer number of states filing suit, I don’t blame Tennessee for shooting its shot, like the last guy at closing time in the bar. I’m trying to imagine a bunch of so-called “west coast elites” moving to Tennessee and getting super into college football or something, but stranger things have happened. Consider 1) it would be retaining employment in a sour economy and 2) the cost of living in Nashville is significantly lower than in Los Angeles. Even I might be tempted, and I hate country music.
But the reality is, moving an entire media company across the country isn’t cheap, especially for an entity that would be $80bn in debt if the merger goes through. Just to survive long enough to hand over CNN to Bari Weiss, Paramount would need every dollar of revenue, plus the aforementioned cost-cutting. This all sounds like transporting a bloated whale carcass via UPS Ground. Someone’s going to have to shave off a bit of blubber to get it in the truck.
For months, this merger has felt inevitable to people here in Los Angeles. The die was cast, there was no turning back, and we all were braced for turbulence. Every scrap of news makes it feel less like a cursed inevitability and more like a precarious house of cards that could be blown over by a stiff wind at any second. Even if this doesn’t happen, a separate Paramount and Warner Bros will each be loaded with more debt than a Bravolebrity’s credit card. Both companies will be dragging a collection of moribund cable channels behind them, each one losing value every time someone cancels their traditional TV service. Nothing in this makes me optimistic for the future of the entertainment industry in LA.
Despite my personal pessimism, this is a battle that has to be fought. If this merger is consummated, where will it end? Will Apple finally merge with Disney? Will Google swoop up Comcast Universal? Will anyone buy Ryanair? This moment feels like our last chance to slow the collapse of an entire industry and a city’s economy. Film and TV production isn’t just a business here. It’s part of our cultural heritage, our identity and a lifeblood for thousands of people in the city. Beyond that, consolidation in any industry, in any city, leads to job loss, automation and economic ruin. If this merger is allowed to go through, we’re not just leaving LA behind, we’re leaving behind millions of skilled workers who are just one acquisition away from losing everything.
