Paramount Set to Absorb Warner Bros. Discovery – What Happens Now?

After Paramount’s insane $31/share offer for Warner Bros. Discovery, Netflix decided that price was too rich and they exited the white hot bidding war. Now, we’re on the verge of a mega-merger that will flip Hollywood on its side and lead to chaos on TV, at the movie theater, and in the streaming world.

While this deal still has to clear regulatory hurdles, it’s the equivalent of a nuclear bomb in the entertainment industry.

What Properties Will Merge?

This merger is absolutely massive if you consider the TV implications alone. Here are all the things that are going to end up in the same company.

There’s also a lot of real estate. Warner Bros. has a 62-acre studio with 31 stages in Burbank. Paramount has 65 acres of space with 30 stages. Warner Bros. Studios Leavesden is 200 acres overall with 19 stages and a 79-acre backlot.

Warner Bros. Discovery also owns several video game companies like NetherRealm Studios, Rocksteady Studios, Portkey Games, Avalanche Software, and TT Games.

The Streaming Fallout

We can expect Paramount+ may straight-up absorb HBO Max. This would surely result in a price increase, but likely not the combined price of both services as they stand today ($32.48 to go ad free!).

Pluto TV should get significantly better. Warner Bros. has 100 years of movies and TV treasures that would fit in well with the Pluto ecosystem.

Paramount+ will become slightly more attractive for sports fans, but aside from owning all of March Madness, there’s not an enormous benefit. WBD has a weird assortment of NHL and MLB games.

The Losses

This combined company would have an absolutely insane number of TV channels. It seems unlikely Paramount would want to keep them all. They can’t create enough content for the channels they currently have.

Paramount could try to sell some of these channels, but it’s hard to imagine what company may want them. The Nickelodeon name may have value, but it’s essentially worthless unless Paramount gives up control of the associated IP. MTV exists only as a placeholder in people’s memories. Comedy Central only exists for two shows at this point.

Invariably, many people will lose their jobs. The combined payroll is somewhere in the neighborhood of 53,000 employees.

One person who will lose his job is incompetent boob David Zaslav. The Warner Bros. Discovery CEO who fell ass-backward into the job thanks to a golf game will exit the company with an enormous golden parachute. Let us never speak of him again.

I would wager Disney kills off its HBO Max bundle whenever the deal closes. They probably won’t want to team up with a company that has that much library overlap. HBO Max was a good fit because Hulu doesn’t really do HBO-style drama. But would Disney want to expose their young viewers to competing IP like the Nickelodeon shows or superheroes from a different company?

Although David Ellison talks a tough game about keeping the studio-to-theater pipeline humming, you have to imagine the output would drop from what the two companies have been producing independently. Disney produces far fewer films today than the pre-merger output of Disney and Fox combined.

Call Human Resources

Though it’s only been about 6 months, Paramount’s new owners have proven themselves sloppy with their important talent.

Walking TV goldmine Taylor Sheridan was so annoyed at Ellison’s meddling, he took a huge bag of cash to leave for NBCUniversal/Peacock.

Anderson Cooper fled “60 Minutes” after right-wing kook Bari Weiss undermined the legendary show. He’ll find himself back in her clutches if she’s put in charge of CNN.

Unless Ellison throttles back on his tendencies, he’s liable to run off even more talent. He can have a giant library and studio ecosystem, but relationships matter in Hollywood. Christopher Nolan famously fled Warner Bros. after a mid-pandemic fight. Artists who lean liberal may not want to use their talents to prop up a company that pushes a skewed news operation.

Waiting Game

This merger will take a fair amount of time and there are many questions left unanswered. But this deal will have a significant impact on sports, movies, TV, streaming, and news. When news breaks, we’ll be sure to bring it your way.

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