Paramount Skydance and Warner Bros. Discovery sign deal for highly-contentious merger
After months of a bidding war, Netflix abandoned its desire to purchase Warner Bros. Discovery, paving the way for a troubling merger
It’s official. Paramount Skydance has won the bidding war over Warner Bros. Discovery. It wasn’t because Paramount Skydance delivered the best deal. Netflix decided to pull out of the running to acquire the legacy Hollywood entertainment brand, which is good news for Netflix and terrible news for us. Not only is entertainment and news being further consolidated under one conservative family, but a lot of jobs are going to be at risk. Let’s get into it.
Warner Bros. Discovery is moving forward with Paramount Skydance
After one of the most publicized and highly-anticipated entertainment bidding wars in Hollywood’s history, Paramount Skydance will be acquiring Warner Bros. Discovery. Before the acquisition was confirmed, Paramount Skydance already owned CBS, MTV, Nickelodeon, Comedy Central, and BET, among others. This consolidation was already a major red flag since so much entertainment was now under the umbrella of one family with strong ties to the current administration.
There was already drama when the Paramount and Skydance merger was approved. Leading up to the final negotiations, CBS announced that “The Late Show with Stephen Colbert” was not being renewed. The cancellation caught Hollywood off guard and sent fear through media organizations and studios. People called out the decision as politically motivated to appease President Donald Trump after Stephen Colbert was critical of the president. It is still considered an infringement on the First Amendment to help usher in a new conglomerate in entertainment.
Netflix walked away from the deal and became the real winner
Netflix was originally supposed to be the media organization to acquire Warner Bros. Discovery. The company had already made an offer that was accepted by Warner Bros. Discovery when Paramount Skydance, in a tantrum, launched a hostile bid to undercut Netflix. David Ellison offered more money for the studio and got public support from the president. It was not a veiled attempt at tipping the scales in favor of a media empire that would be friendly to the president.
Ellison’s aggressive bid to buy Warner Bros. Discovery backed Netflix into a corner where the only way to win was to buy by losing. The overinflated price offered by Paramount Skydance would have forced Netflix to commit a ruinous purchase of the studio and its streaming assets.
Seeing the deal, Netflix, in a savvy business move, backed out of the drama and paved the way for Paramount Skydance to claim victory. News of Netflix pulling out of the drama caused stocks for the media company to soar. In fact, Netflix’s original idea to offer Warner Bros. Discovery an eye-watering $83 billion forced the stock price to dip significantly. However, now that Netflix has walked away, with their cash still in hand, the stock price is up.
The decision by Netflix gives the company the cash to turbocharge its own production and content creation. Netflix is already the industry leader in streaming, with no other platforms coming close. Despite the age of the company, it has remained fresh by tapping into stories and content creation around the world, something Paramount Skydance can’t beat, even with Warner Bros. Discovery.
The merger could spell disaster in two ways: indoctrination through content and mass job losses
Now, the deal between Paramount Skydance and Warner Bros. Discovery could still fall through. While the companies signed the deal, it will have to be approved by the federal government. It is now on Paramount Skydance to prove to the Department of Justice that the merger will not hurt customers.
Politically, it is left to see how unbiased the Department of Justice, headed up by Trump loyalist and stock market enthusiast Attorney General Pam Bondi, can be. In the past, President Trump has given his blessing for Paramount Skydance to acquire all of Warner Bros. Discovery. Netflix only wanted some of the assets.
The concern is that giving Paramount Skydance such power over Hollywood could cause real harm to customers. This merger could give the conglomerate power over movie prices and streaming subscriptions. (Now would be a good time to reconsider all of the streaming subscriptions you have.) Furthermore, if history has taught us anything, this kind of consolidation of entertainment and news can be disastrous.
One family controlling so much of the entertainment landscape means that soon all creative work will have to start filtering through a certain lens. Stephen Colbert is an example of what could happen in the future with more control by Ellison.
The other concern is mass job loss. Larry Ellison, David’s father, is the co-founder of Oracle. Larry believes that there should be an “AI-everything” approach to data from private businesses to the United States government. We are talking about mass AI surveillance, government data collection, healthcare, and autonomous policing.
David is taking pages out of his father’s book to implement them in Hollywood. He has a vision that makes AI the cornerstone of content creation through his growing studio empire. At the surface, it seems like a fine idea. Implement AI to help boost creation and try to make the studio competitive with Netflix. However, in practice, things are rarely as straightforward or positive. Money talks, and money is screaming right now.
The AI-everything approach is a terrible idea
The human cost adds up. The more AI is integrated into Paramount Skydance’s operations, the less they need humans to do certain roles. Creative jobs in Los Angeles are already drying up due to the limited use of AI-powered technology. David’s dream would supercharge the practice of sacrificing human creatives, market executives, and sales in the name of efficiency.
This isn’t a hyperbolic statement. We have already seen how quickly David will move to eliminate roles to feed into his AI-powered fantasy. When Skydance acquired Paramount, 1,000 people were immediately laid off in favor of AI. Taking the reins of Warner Bros. Discovery will likely lead to even more layoffs, over-saturating the pool of unemployed creatives in Los Angeles, and further straining the job market.
Additionally, Jack Dorsey recently announced that Block would be laying off 40 percent of its workforce in favor of AI. That is more than 4,000 people in favor of AI efficiency.
Now, utilizing AI is not inherently bad. There are great uses of the technology that are advancing human knowledge in places like medicine. Where this deviates is that the AI is not working to move anything forward. It would be used to create content.
AI is known for being sycophantic and doing what the user wants to do, regardless of whether or not it is a good idea. Understanding AI’s desire to please its human counterparts paints a dystopian future for media, news, and entertainment under David. If the family’s ideological beliefs start to seep into the creative work with AI, there is no stopping them from creating content focused on amplifying these worldviews.
There is a lot we still don’t know about what the future of Hollywood looks like if the merger is approved by the federal government. As of now, the picture isn’t great. The unknowns create uncertainty for jobs, indoctrination, and expanded state-run control. David has already shown that he is a Trump fan and is willing to do what is asked of him to get what he wants. This will be a pivotal point in Hollywood’s history, and all eyes are on David.