You can set your watch to it.
Major media companies insist they simply have to merge to create all manner of amazing new “consolidative synergies.” The debt from the acquisitions then result in brand and company cannibalization as labor and consumers are forced to carry the load. The net result is mass layoffs, higher prices, and shittier products from corner cutting. Typical enshittification.
It used to be that after a major acquisition, executives would spend six months to a year at least pretending there were no labor downsides to consolidation. Now they don’t even bother.
The Ellison family and Paramount/Skydance/Warner Bros executives are already warning staff of major impending layoffs as “redundancies” are eliminated and workers are forced to pay off $82 billion in debt.
But worry not, in a memo to staff by Skydance CEO David Ellison and co-CEO Ynon Kreiz, the duo states that coming mass terminations will be conducted “thoughtfully and respectfully:”
“Integrating two companies will bring change, including difficult decisions that affect our workforce,” the execs wrote in the memo, a copy of which was obtained by Variety. “We are committed to handling this process thoughtfully and respectfully.”
The mass firings are, employees are told, part of “building a culture” where people feel “supported” and “empowered:”
“We must never lose sight of what matters most: our people. We will build a culture where people feel respected, empowered, supported and proud of the work they do.”
It’s important to recall that Skydance was first created years ago by Larry Ellison as an avenue that would allow his son David to pretend he was an actor. Like most extraction-class brunchlords, David has just failed upward ever since, to the point where he’s now in charge of most of Hollywood’s biggest studios.
Paramount execs say they’re aiming to create more than $6 billion in annualized cost savings over three years, most of which will come from layoffs (despite claims to the contrary by deal architect and RedBird Capital Partners boss Gerry Cardinale). Recall that when AT&T bungled its dual, doomed acquisitions of DirecTV and Time Warner, more than 50,000 employees ultimately lost their jobs.
This comes after numerous rounds of layoffs caused by the previous merger between Paramount and Skydance. Further layoffs will come next year as bumbling Paramount execs struggle to adapt to shifting demand across traditional film and television. We know this because this is literally what happens every single time major media companies (especially Warner Brothers) pursue “growth for growth’s sake” consolidation.
The risks here are so bad, even normally pro-consolidation and pseudo-growth obsessed Wall Street is getting cold feet about how this all ends:
“TD Cowen analyst Doug Creutz wrote in a note Wednesday that investors should hold their shares of Skydance as the firm remained “quite cautious on the ability of the company and its management to avoid integration and execution problems that have bedeviled other major media mergers.”
“The risks (leverage, integration) of the combination with WBD are high; we remain skeptical that SKYD management will be able to create value from this deal when so many other major media deals have failed,” the note read.”
And again, this could have been potentially prevented if California Democrats like Gavin Newsom, Karen Bass, and gubernatorial nominee Xavier Becerra hadn’t pressured state AGs to settle their antitrust lawsuit against the company. What’s worse is they couldn’t even be bothered to affix meaningful conditions to the deal; most were simply empty gestures Paramount suggested itself.