from the repeat-the-same-mistakes-over-and-over-again dept
U.S. media mergers at all times observe the identical trajectory. Pre-merger, executives promise all method of fantastic synergies and deal advantages. Put up-merger, not solely to these advantages usually by no means arrive, the debt from the acquisition spree often ends in vital layoffs, decrease high quality product, and better charges for shoppers. The Time Warner Discovery catastrophe was the poster baby for this phenomenon.
After paying Trump his $16 million bribe, CBS and Skydance (Trump’s mates within the Ellison household) just lately finalized their $8 billion merger. And executives are already indicating that one of many first orders of enterprise will probably be to fireplace a big variety of workers.
On the intense aspect, at the very least new CBS President Jeff Shell (fired from Comcast after allegations of sexual harassment) is being up entrance concerning the truth the layoffs will probably be large and “painful”:
“We don’t wish to be an organization that has layoffs each quarter. So, it’s going to be painful. It’s at all times arduous, however we don’t wish to be an organization that each quarter is laying folks off. So, it will be important for us to get achieved what we’re doing in a single massive factor after which be achieved with it.”
The factor is, merger associated guarantees each earlier than and after the deal are at all times meaningless. The layoffs are pushed by debt from acquisitions, and the brand new CBS has been making loads of these, together with a brand new $7.7 billion deal to accumulate the unique rights to MMA fights. And a seemingly acquisition of Bari Weiss’ proper wing propaganda mill The Free Press.
When the brand new CBS inevitably faces headwinds, shoppers and workers are at all times first to bear the brunt of any real-world ache. These offers nearly by no means enhance product or markets or serve the general public curiosity. They exist to briefly goose inventory valuations, create large tax breaks by convoluted monetary transactions, and let fail-upward sort executives faux they’re “savvy dealmakers.”
This occurs each time there’s a serious merger of this kind. However not solely do U.S. regulators endlessly rubber stamp these sorts of offers, the U.S. press routinely fails to say any of this historic context of their protection. So the sample repeats itself again and again, with no one in any place of administration financially incentivized to study something from every expertise.
If the CBS deal follows previous mergers, they’ll hearth a complete bunch of individuals in a month or two. Then they’ll hearth considerably extra as soon as executives show they don’t actually know what they’re doing. Costs will soar, product high quality will deteriorate, and after a number of years of dysfunction the executives accountable will fail upward towards different corporations the place the method will repeat itself once more.
Filed Underneath: antitrust reform, consolidation, journalism, labor, layoffs, media, mergers
Corporations: cbs, paramount, skydance
