Larry Ellison has succeeded in fusing Paramount and Warner Brothers in a $110 billion merger that will culminate in mass layoffs, higher prices, lower-quality product, and news outlets like CNN becoming even more friendly to corporate power and the U.S. right wing.
This enshittification will arrive despite endless promises by the Ellisons that none of these things are happening or will happen.
They’ve renamed the entire giant company Skydance. The bigger Skydance will be born with a giant weight tied around its neck in the form of $82 billion in debt. The Ellisons, who are incredibly over-extended on AI, have to manage that debt load while trying to adapt to a quickly shifting entertainment industry that isn’t being kind to traditional broadcast TV or the brick-and-mortar film industry:
“Those challenges will pose a major test for Mr. Ellison, 43, who until last year had never run a public media company. He and his team must convince Wall Street that the new company can manage those challenges while it pays down $82 billion in debt, a staggering sum for a traditional media company. He must also rally tens of thousands of employees at Warner Bros. and Paramount; both companies have undergone nearly annual layoffs in recent years.”
It’s simply not going to end well. We know this because gigantic “growth for growth’s sake” mergers never end well. Particularly when Warner Brothers is involved. Every single major deal involving this company, from 2000’s superunion with AOL to AT&T’s 2016 acquisition of Warner Bros to Discovery’s 2022 acquisition of Warner Bros, resulted in mass layoffs and shittier overall product.
Generally when I talk about media consolidation, people’s eyes glaze over. Paramount’s acquisition of Warner Brothers was somehow different. I’m not sure if it’s because Trump BFF Larry Ellison was involved, the company engaged in such sleazy tactics to get the deal approved, the Saudi investment and influence angle, or the fact we just lived through a disastrous master class in incompetence by AT&T.
But somehow people generally seemed to understand this deal was particularly bad. This time around, people seemed to understand that these sorts of deals always result in a giant mountain of debt that’s always borne by consumers in the form of higher prices, labor in the form of mass layoffs, or the public and markets in the form of corner cutting and lower-quality overall product.
And yet it still didn’t matter.
Despite a last-ditch attempt by a weak-coalition of 12 state AGs to actually enforce antitrust law for once, the Democratic deal opposition lacked the backbone to stand up to Larry Ellison’s relentless lobbying.
Establishment Republicans love the deal because it cements more of the media into the hands of the right wing. Democrats, once again demonstrating they’re a decorative opposition party, couldn’t muster enough consistent opposition to fight back against the deal; buckling at the last minute to Ellison’s threat that he’d move Paramount out of California if they dare try to protect markets, labor, and consumers.
I’ve covered more major telecom and media mergers than I can even remember, and here’s what happens next:
- Larry Ellison and his Nepobaby son David spend the next 6-12 months pretending that the deal is already delivering all manner of exciting new synergies and innovations as they pretend they have what it takes to “become a tech company.”
- But it won’t take long for thousands of layoffs to drop, as redundancies are eliminated (AT&T’s acquisition of Warner Bros and DirecTV resulted in, you may recall, 50,000 layoffs).
- From there, as we saw with AT&T, you’ll start to see all manner of promising projects cancelled by the kind of folks who only care about lowest-common denominator cack (Stephen Colbert’s Lord Of The Rings movie appears to be an early casualty already).
- You’ll also quickly see even higher prices and new and annoying restrictions imposed on the companies’ streaming video platforms.
- CNN will steadily become shittier and even more friendly to corporate power and right wing ideology, while pretending to be doing “fair and balanced” journalism.
- Ellison will likely move more film and TV production overseas anyway, because that’s been the general trend regardless of his “take my ball and go home” threat.
- In two to three years, after the extraction class has extracted any remaining value, the disastrous mess will be offloaded to some other media giant (Netflix, Disney, Amazon) for a song, resulting in even more layoffs.
We know this, again, because this is what always happens. And while this happens, all the folks that pushed so hard for the merger — including weak-kneed Democrats like Gavin Newsom, Karen Bass, and gubernatorial nominee Xavier Becerra (who all heavily pressured state AGs to back away from enforcing antitrust law) will be nowhere to be found. They’ll simply memory hole the entire experience.