Opinions are mixed, but concerns about a Warner Bros. merger abound.
“Warner Bros. Discovery, holy cow, to buy something like a huge library, and that raises all kinds of questions about future strategy,” says Kathryn Harrigan, the Henry R. Kravis Professor of Business Leadership at Columbia Business School.
Further, she says, Paramount’s decision to go direct to shareholders is interesting. “Whether it’s an attractive proposition remains to be seen,” Harrigan says.
What the merger could mean for workers and creators
If the deal goes to Netflix, which continues largely on theatrical releases, cinephiles fear it could mark the beginning of the end of the movie theater business.
There are also labor concerns: Whether Netflix or Paramount prevails, company layoffs or restructuring could mean significant layoffs. Consolidation will likely mean fewer bidders for creative projects or a shrinking landscape of TV shows and movies. Translation: fewer and fewer theatrical releases, and less daring projects overall (a la Severance or Seinfeld).
“What you’re seeing is that only certain streaming services can really make prestige TV or push the envelope,” says Anthony Plumba, assistant professor of business administration at the University of Virginia’s Darden School of Business and an entertainment industry expert. “Artists now have fewer places to create new material.”
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Regulatory and political constraints
In both cases, regulators must approve the final deal. For Netflix, at least, the deal is expected to close in 12 to 18 months.
A wild card: President Trump, who has said he’ll probably be involved in the decision, and that in terms of Netflix vs. Paramount, he “has to see what percentage of the market they have.” He also said it was “imperative” that CNN be sold.
“It remains to be seen who eats it now,” says Plumba. “All the bidders are tech and media and this could result in a protracted war.”
Takeaway for consumers
When Netflix made its announcement, Harrigan says, “what everyone wanted to know was, ‘Does this mean I’m going to get this Netflix subscription where I can watch all this stuff?’ And I said, ‘Don’t count on it.’
Harrigan says the legal reality is that video properties have clauses that dictate how much it costs to display them in your content menu, and those costs can vary greatly. “So it will be very interesting to see what happens,” she says.
“It feels like we’re going to have lower quality content for a higher price,” Plumba says. “I’m really worried for the artists and I’m really worried for the consumers, no question about it.”
