from the do-not-pass-go,-do-not-collect-$200 dept
So Netflix has introduced that it’s shopping for Warner Brothers Discovery (together with HBO) for a whopping $82.7 billion. As we’ve effectively coated, it’s the newest in a protracted sequence of pointless Warner mergers stretching again to the 2001 AOL acquisition, which all resulted in oodles of chaos, worth hikes, layoffs, and customarily a gentle erosion in product high quality.
Netflix’s deal features a $5.8 billion breakup payment and guarantees to take care of Warner Bros. present operations, “together with theatrical releases.” The deal doesn’t embrace Warner Bros Discovery’s struggling linear networks enterprise (CNN, TNT, HGTV and Discovery+) which Netflix correctly needed nothing to do with. These are scheduled to be spun out subsequent 12 months into their very own sagging sub-company.
Netflix is, after all, making all method of pre-merger guarantees about how the deal will probably be nice for everybody, particularly creatives:
“Netflix additionally made its pitch to filmmakers and creatives, writing that “by uniting Netflix’s member expertise and international attain with Warner Bros.’ famend franchises and in depth library, the Firm will create better worth for expertise — providing extra alternatives to work with beloved mental property, inform new tales and join with a wider viewers than ever earlier than.”
However as we’ve seen the final three or 4 occasions Warner Brothers has been acquired, pre-merger guarantees imply completely nothing. The large debt created by these acquisitions inevitably ends in panicked price reducing, which normally includes mass layoffs, (even greater) worth hikes, and a common cannibalization of name and product high quality. It occurs time and again.
Of the suitors that might have purchased Warner Brothers Discovery (Comcast/NBC and Larry Ellison/CBS/Paramount), Netflix might be the “greatest” choice. They’re (for now) the least up Trump’s ass of the three bidders; and customarily might retain extra of the core Warner Brothers Discovery infrastructure and workers on account of fewer current redundancies.
That’s to not say the deal will probably be good, essentially. If we lived in a non-corrupt nation with functioning regulators, the federal government possible wouldn’t permit any extra consolidation in mainstream company media, because the outcomes thus far have been nothing however dangerous for labor, shoppers, and markets. These corporations’ journalism arms, when you haven’t observed, wish to downplay or ignore this truth in protection.
Play a bit sport with me at dwelling: when you’re studying a narrative about this deal, cease and spot if the journalist and outlet, at any level, mentions the truth that the many years’ price of previous variants of Warner offers have been totally disastrous for labor, shoppers, creativity, and wholesome markets. As a result of that’s sort of essential context in case your job is informing the general public of the reality!
The bungled AT&T acquisition of Warner and DirecTV alone resulted in an enormous layoff spree together with 50,000 folks. However when the consolidated company press covers the newest merger, that’s not talked about. Why is that selection made editorially, do you wager?
In the meantime Netflix nonetheless has a hurdle to face: the bizarre zealots on the Trump DOJ and FCC. Paramount and/or the Trump administration has spent the final week seeding complaints in Republican-friendly media that the bidding course of was unfair to Larry Ellison and CBS/Paramount, and that the Trump administration is anxious concerning the antitrust impression of a Netflix Warner Brothers mixture.
The Trump administration couldn’t give any much less of a shit about antitrust or consolidated company energy; they only need leverage over Netflix and/or to ensure their pal Larry Ellison can purchase HBO and CNN. And so they’re mad at Netflix as a result of they put some homosexual folks in exhibits concerning the army. The Ellisons might purchase the spun off TV property, however they might additionally nonetheless wish to leverage Trump to get way more.
So I might not be shocked that if in just a few weeks or so that you see Trump’s FCC lackey Brendan Carr launch some sort of pretend inquiry into “irregularities within the bidding course of,” the place he talks quite a bit about Netflix’s consolidated energy “not being within the public curiosity.” The objective will probably be twofold: to power possession over to Ellison, or not less than to (as we’ve seen with CBS mergers) power Netflix to kiss Donald’s ass.
The press (and the standard assortment of helpful fool pundits) will possible then assist Trump faux these inquiries are professional “populist” antitrust actions.
When you recall, the primary Trump administration sued to cease the AT&T Time Warner deal. That was heralded as a uncommon instance of the administration truly caring about consolidated company energy by the press; but it surely turned out it was largely as a result of Rupert Murdoch had his personal acquisition supply for CNN rejected and needed to scuttle the deal.
Maintain your eyes peeled for regulatory shenanigans. Even when the Trump administration doesn’t abuse FCC and DOJ energy to assist Ellison, they’ll definitely abuse regulatory merger approval energy to attempt to power Netflix to kiss their asses in new and problematic methods (see: CBS, Verizon). And Netflix, no stranger to throwing ethics beneath the bridge when handy, will very possible be glad to oblige.
Filed Beneath: competitors, consolidation, doj, larry ellison, media, mergers, video
Firms: netflix, warner bros. discovery
