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Warner Brothers Is For Sale (Again): Prepare For More Pointless, Disastrous Media Mergers
from the this-is-why-we-can't-have-nice-things dept
I’ve written a lot about the AOL–>AT&T–>Time Warner–>Discovery mergers simply because I think they perfectly encapsulate the pointless, destructive incompetence at the heart of modern media consolidation, and the cannibalistic nature of Wall Street’s obsession with illusory quarterly growth propped up by smoke, mirrors, and complex accounting.
Ever since the original AOL Time Warner merger back in 2001, an endless wave of pointless mergers promised no limit of innovative “synergies,” but instead resulted in more than 50,000 layoffs, shittier product, higher prices, the death of a ton of well-loved brands and IPs, decades of chaos, a decline in quality journalism, and a bottomless well of shit.
All so some overpaid execs could nab some tax breaks and short-term stock boosts and put “savvy dealmaker” on their resume — before failing upward to the next bad idea.
Mass U.S. media is the purest form of enshittification. And because nobody in this chain of dysfunction is financially incentivized to learn from experience, we’re about to do it all over again.
Time Warner has formally announced that it’s once again up for sale. The most likely buyer? Larry Ellison’s nepobaby son David, who just bribed the President so he could buy CBS and turn it into a right wing propaganda mill (he’s also likely a new co-owner of TikTok). If Ellison wants Time Warner, it’s estimated that it will cost somewhere around $60 billion:
“David Ellison’s mission: grab Warner Bros Discovery before it splits. The freshly minted media mogul behind Paramount is considering various options, including possibly bypassing the board of the HBO and CNN owner and going straight to shareholders instead. To tempt them will probably cost about $60 billion.”
Ellison is on an acquisition spree (CBS, CNN, TikTok) trying to build a major modern media giant with a decidedly right wing bent (see the whole Bari Weiss fracas). Which isn’t great for a media and journalism environment already dominated by right wing billionaires trying to blow smoke up their own asses.
I’d like you to play a little game with me. Pluck any of the hundreds of stories of Time Warner’s latest likely sale from the newswires, and see if they there’s any mention of the disastrous recent history of Time Warner Discovery and AT&T’s mergers under the leadership of CEO David Zaslav. Or the terrible real-world impact this sort of consolidation always has on market health, labor, or consumers.
You (usually) won’t see it because consolidation creates a media that’s too broken and feckless to honestly report on itself. Instead you get a lot of journalistic-simulacrum that kind of mimics the look and style of journalism, but is just as hollow as as a jack-o-lantern.
Time Warner will be sold, again. The resulting debt will result in all manner of cost cutting from the acquiring company to pay off unmanageable debt (see: CBS already firing employees en masse). The executives responsible will profit from short term stock boosts and tax breaks, but will be nowhere to be found when layoffs abound, prices, soar, customers flee, and the whole thing starts to unravel. Again.
But however bad past media mergers of this type have been, you should prepare for everything to get much, much dumber now that the U.S. government has eviscerated whatever was left of regulatory independence and our already flimsy dedication to antitrust reform.
Despite what Matt Stoller types promised during the last election season, The Trump administration isn’t even bothering with America’s usual half-assed pretense at caring about corporate power. His FCC is gutting whatever was left of media consolidation limits across all sectors. His courts are making it so serious corporate accountability (of any kind) is effectively now legally impossible.
That’s going to result in all manner of massive, harmful deals we couldn’t have imagined previously across telecom, media, and tech, as oligarchs try to goose earnings and dominate the entirety of modern media. With zero functional regulatory oversight. In a country controlled by unhinged zealots.
What could possibly go wrong?
Filed Under: consolidation, david ellison, david zazlav, journalism, larry ellison, layoffs, media, mergers, synergies
Companies: skydance, warner bros., warner bros. discovery
Comments on “Warner Brothers Is For Sale (Again): Prepare For More Pointless, Disastrous Media Mergers”
So HBO-Max-MAx-Super-Duper-HBO-Max-Again-Whatever-The-Name-Is-Now is going to get even worse?
Re:
I remember when I thought “Well, Discovery can’t possibly be as bad as AT&T; at least they’re a TV company, not the phone company.”
Sure learned my lesson from that one!
Re:
You almost ended up with “Supermax” in there, and that’d be kind of a funny name. Particularly if they make it very difficult to “get out”.
I wish I had a few billion laying around so I could buy it and just tell people to make good content and don’t worry about its political stance or who it offends.
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No group or single person should have that much power or concentrate that much wealth. That’s where the problems come from, sadly.
Re:
But you’ll go out of business because Netflix makes crap and is hogging the audience. Turns out people love crap. I have no faith that “quality” will lure them away. If that were true, why doesn’t AppleTV have 300M subscribers and Netflix have 40M instead of the reverse?
Re: Re:
People have been saying that about other networks for a very long time, such as Fox in the 1990s (“Fox turned into a hard-core sex channel so gradually I didn’t even notice”). And about “reality” television in general, shortly thereafter.
But, at least, for all the talk of “disaster” and so on, probably nobody’s gonna die from this, and there aren’t gonna be billions of dollars in insurance payouts. It seems like an exaggeration when we’re only talking about entertainment; specifically about one shitty company getting a little shittier. In my view, we might as well let them all merge into Consolidated Shit Inc.; delaying their death doesn’t actually help the public, and the people working on shows might do better once the current monopsonistic market is obviously defunct.
Re: Re: "it's the economy, stupid"
Convenience beats quality most of the time for most people.
Slop content is convenient in that it takes less brainpower to digest.
The USA has created for itself a long-running epidemic of precarity, this means many fewer people have the education and/or time and/or mental bandwidth for more complex art.
So,
A more robust middle class would create more demand for higher quality content, more demand; more supply.
Or,
In other words, you’re fucked USA, enjoy your overabundance of braindead slop.
Re: Re: Re:
Why does this require a class in between two (or more) other classes? “Higher” classes would presumably have more time and mental bandwidth, plus more money. But, really, it seems that all that needs to be done is to move people out of “precarity”.
Re: Re: Re:2 "a rising tide lifts all boats"
LOL
The USA has hollowed its middle class so much an average fellow doesn’t understand anymore what it is.
Your lives are so precarious because of that tale of bootstrap rugged individualism sold to your country.
Never looked at numbers of inequality and economic mobility to compare?
Hey USA many of your peer countries enable the “American Dream” for their people much better than you for yours!
And,
That was before Trump.
Re: Re: Re:3
Just the word “middle” should remind people that maybe they could aim higher. So, if “middle” is literally the best remotely-realisitic outcome they can think of, and even that remains stubbornly out of reach for most, then yeah, there’s something wrong.
That phrase was popularized by James Truslow Adams, who defined it thusly: “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. […] It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable […] regardless of the fortuitous circumstances of birth or position”.
In other words, classlessness. One oughtn’t be dreaming of positioning oneself atop a lower class (nor below a higher one).
Idiocracy
Wasn’t this already done in Idiocracy? Well, if we are going that way, I’m looking forward to seeing the next supreme court case!
If this merger happens, Ellison is going to burn thru a lot of daddy’s money and end up with a mess in a few years.
The issue is, Warners is sketchy but salvageable while Paramount-Skydance is just badly off. A loser in the streaming wars, IP is mediocre, all those cable and broadcast assets are losing value fast.
Jamming sketchy and beyond-sketchy companies together is just going to result in a very sketchy company. You can’t synergy your way past the basic problem, that Netflix changed all the rules, destroyed the lucrative cable and broadcast businesses, helped make the theatrical business a lot tougher (only the top blockbuster franchises need apply), and destroyed physical media.
Meanwhile, social media and YouTube have destroyed the old Discovery type middling “documentary” content business as well as news. So Ellison is going to have two albatrosses on his hands: CBS and CNN. I bet he blows it with both because it’s unclear whether there’s a way to save any of the old broadcast or cable news businesses. The audience has evaporated except for old people headed for the boneyard and the advertisers don’t want them.
The upside is, maybe he’ll blow daddy’s money making a lot of entertaining content for us but nobody should be investing in this very iffy plan.
Re:
“When” not “if”.
To be fair, Matt Stoller no longer thinks the Trump administration will do any kind of antitrust.
On the negative, he is dumb enough to think there was originally and then there was an internal coup at the FTC rather than the intention all along.
Accounting
Man, Warner Bros is up for sale again. It’s wild how these media giants keep merging, splitting, and selling the same assets like they’re flipping houses, except every time, thousands of people lose their jobs and the product gets worse.
It’s all “synergies” and “growth” on paper, but really it’s just balance sheet magic, shifting debt around, chasing tax breaks, and inflating short-term earnings so execs can cash out before it all crashes. As an accountant, it’s kind of funny and sad at the same time, you can see the numbers look good for a quarter or two, but the underlying business keeps rotting.
Honestly, it’s less about running a company and more about playing accounting Tetris with people’s livelihoods.