I get that the announcement late last week that Netflix was acquiring the sexier assets of Warner Brothers Discovery is a BIG deal. It’s not every day when a century-old media brand gets somewhere between $72 and $83 billion thrown at it by an upstart that didn’t even exist in the 20th century–and that price doesn’t even cover the whole damn thing.
The problem I and apparently a growing number of grousers have with all of this is that at least at the moment it’s much ado about nothing. As we’ve mused, the legal hurdles both domestic and international that this needs to clear before it becomes a reality are considerable. The sheer size and complexity assures that we’re likely looking at late 2027 at the earliest before the exodus of moving vans between 5800 Sunset and Burbank Ranch begin in earnest. Not to mention the undeniable reality of these times that politics will ultimately factor into all of this, especially since we’re heading into midterms and somebody’s bound to piggyback onto Elizabeth Warren’s seemingly insatiable desire to play Chicken Little and try to curry favor with the panicked rank and file that will inevitably be impacted.
All that said, we’re already starting to see signs that in spite of the collective consternation of the brave warrior from Massachusetts and just about every union leader who has ever impacted a production some of those supposedly insurmountable obstacles are already on the way to being overperched. The farter-in-chief, in the role he was arguably best suited for as host of the Kennedy Center Awards taping last night, gushed over our friend Teddy Bear in a way we’ve not seen since Zohran Mamdani paid him a visit. DEADLINE’s Jill Goldsmith and Ted Johnson were apparently doing their best impression of Joan and Melissa Rivers and gave us this insight last night:
President Donald Trump gushed over Netflix co-CEO Ted Sarandos calling him “fantastic” and more but also noted that a combined Netflix-Warner Bros. would “have a very big market share.” That’s “for some economists to tell. And I’ll be involved in that decision too,” he told Deadline’s Ted Johnson on the red carpet ahead of the Kennedy Center Honors in Washington, D.C. tonight. “He came up. He was in the Oval Office last week. I have a lot of respect for him. He is a great person,” Trump said of Sarandos. “Ted has really done a legendary job.”
You almost have to feel a little sorry for David Ellison et al–who were on hand because CBS, as they have for nearly half a century, was recording the event for a holiday week special. More than likely he felt the same way I did in high school when I saw the girl I thought made a commitment to me was seen in the park making out with my friend–who most of thought had thought was gay (and in later years our hunches were eventually proven to be correct).
And such sympathy is augmented by the burdgeoning preponderance of evidence that the Netflix-WBD coupling is simply not a great idea. As he is so often want to do, ESNAP’s Evan Shapiro weighed in with his cutesy graphics and blunt force opinion in his MEDIA WAR AND PEACE newsletter that dropped yesterday:
Some will say it’s hard to predict how this deal might turn out. To that I say: Bullshit. We have a motion-picture-perfect case study to gauge how this merger will play out – the Disney acquisition of FOX in 2019. There are myriad reasons why these deals are uber-appropriate comps: The prices are similar; the acquisition targets are almost identical; the need-case of the buyers are eerily alike; the post-deal debt loads are comparably monumental; and the strategic imperatives of all four companies involved bear striking resemblances.
(W)hen we combine the $71 billion acquisition price, the $25 billion in incremental value generated, and the loss from the interest on their debt, over the last six years, the FOX acquisition has actually destroyed more than $58 billion in value for Disney. This is why Disney is actually worth less now than it was in 2019…Despite my love for Deadpool & Wolverine, the combination of Disney & FOX has been as successful as the Titanic – the boat, not the movie. 
But much like so many others in my life–myself included at many times–despite these flashing red alerts the allure of something we think is sexy still has us rushing into the light at the end of the tunnel, ignorant to the fact that light is eminating from an oncoming train. Which then begs the question–what’s next? Especially since there’s still something left of Warner Brothers Discovery even after Moby Dick swallowed Jonah.
I offered up what to many was a snarky and dismissive solution when I suggested somewhat tongue-in-cheek that the Ellison and Trump clans should join forces and make a business out of those remnants, if for no other reason then they’d be able to indulge their fantasy of having direct control of CNN. That said, neither of them really has a great track record with that, or for that matter any traditional linear assets. And honestly, I’m not all that sure they have the stamina to work that hard.
But then I was passed along this surprising revelation from FTV LIVE’s Scott Jones that he dropped early this morning:
Fox Corporation is pursuing a strategic deal with Paramount Skydance to effectively control a large group of CBS owned-and-operated local TV stations without having to formally buy them, a move that would bypass federal media ownership limits. The core of the deal is a proposed joint venture, a business arrangement that would allow Fox to operate and manage the stations while Paramount retains official ownership. This structure is a long-standing tactic in the media industry, often utilizing agreements like Shared Services Agreements or Local Marketing Agreements, which grant significant operational control and revenue-sharing rights without triggering the Federal Communications Commission’s ownership caps.
It sure looks like there’s another combination of aging oligarch and nepobaby heir out there that actually do want to get down and dirty, and the fact it’s the one that already sold what they considered be the “middle of the paper” to a monolith in pursuit of strategic “hand” at the expense of tangible profitability makes this latest chess move all the more intriguing.
Which then sent my mind off. Hmmm–maybe Rupes and Foxy Lachsie might be a more viable landing place for the balance of WBD than Mar-A-Lago?
There’s obviously the allure of melding FOX News and CNN together–something Sir Keith has desired ever since he meandered his way here from Australia more than a half-century ago. But there’s also the potential to reignite their slimmed down portfolio with a host of still-profitable linear entities that include the Discovery franchises that never were dumb enough to get into the expense and failure rate of scripted TV. And FOX also already has an ad-supported digital infrastructure called Tubi that could house and augment those franchises–both via a more robust bundle of channels than FOX One is putting out there as well as take the more successful unscripted series and devote additional FAST channels and tiles to them. Tubi is actually making more money for the Murdochs than are their traditional networks, and it’s a helluva lot more successful than anything Discovery has tried to do before and after Yosemite Zas stuck his nose into their biz.
And hey–don’t get your panties in a bunch over yet another round of legal wranglings. This alliance could also be accomplished via a joint venture. If Paramount is open to it, why not Discovery Global? Especially since the joint they’d be venturing with has actual experience successfully coping with the unloading of its legacy content and production companies?
It’s most def not a perfect shidduch. But it does solve one hanging chad out there that will otherwise have the industry in limbo potentially longer than even the more doom-scrolling among us are fearing. And it might just offer a somewhat rosier picture for relative success than the megadeal that it’s increasingly looking like is gonna happen no matter how much anyone doth protest.
Wanderlust has ruled us ever since Eve couldn’t quite quell her urge for an apple. All we can do is do the best we can with what we’re left with. That’s a lesson I learned the hard way in high school. Perhaps this may the time for the jilted whiners out there to follow suit.
Until next time…