Judging by how much jubilation was blowing up my timeline late yesterday afternoon, one thought have thought that actual progress had been made in what has increasingly become an issue for politicians and activists to attach themselves to. The NEW YORK TIMES’ Holy Trinity of Benjamin Mullin, David McCabe and Lauren Hirsch worked a slighly longer summer Friday afternoon shift to deliver this breaking news:
Paramount said on Friday that it had agreed to halt its merger with Warner Bros. Discovery until next June at the latest while a judge considers a lawsuit from state attorneys general who sued to block the deal. The delay is the latest curveball in a deal that would remake Hollywood.
In a legal filing, Paramount and the state attorneys general said that they had reached an agreement to freeze the $111 billion merger while the case works its way through court, extending a shorter pause imposed this week by a federal judge in California. The merger agreement expires on June 4, 2027, if the deal has not closed by that date.
The delay could be costly for Paramount. The company, run by the tech scion David Ellison, has agreed to pay Warner Bros. Discovery shareholders a fee of $650 million for every quarter that the deal does not close, beginning in October.
Immediately those who have inserted themselves into this like a barnacle on a turbulent ship began to take victory laps–or at least a few extra steps. The TIMES” troika threw this one onto the pyre:
The coalition of 12 states led by California includes New York, Connecticut, Oregon and Arizona. California Attorney General Rob Bonta, who led the states, said in a statement that the delay was “great news for audiences.” Letitia James, the New York attorney general, called the freeze “a crucial victory” in a statement….Norm Eisen, a lawyer who led opposition against the deal in Hollywood through his organization Democracy Defenders Fund, applauded the delay in a statement, saying that the merger was “anti-competitive, anti-consumer and anti-creator.”
And DEADLINE’s dynamic duo of Dade Hayes and Jill Goldsmith added some more details and underscorings:
Bonta hailed the agreement, under which Paramount pledged not close the $110 billion deal before June 1, 2027, or a legal determination of the suit’s merits, whichever comes first. The pact is “great news for audiences, movie theaters, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy,” he said in a statement. “We’re eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day.”
Peter Murrieta, secretary-treasurer of the WGA West, joined the briefing from Comic-Con in San Diego to decry the deal’s potential to “push down our compensation for writers” or cut the output of films and series.
“The power of many can beat the power of money when we organize – and this is not a done deal,” said Anjuli Kronheim Katz, executive director of the Committee for the First Amendment. “We’re not also being overly presumptive that we’re going to block this merger. It’s not a full victory, but it is an important indication of the power that we’ve built and what’s possible when we organize people. There’s a lot more to do. This is going to be hard, but it is not hopeless.”
I’m awfully glad the lobbyists and activists are happy. Curious–have any of them actually spoken to the actual people being impacted?
BUSINESS INSIDER’s James Faris did. Even the smidgen that emerged above their paywall was telling:
“I’m definitely worried about impending layoffs post-merger,” a Paramount research staffer said. “But I’m worried about the company as a whole if it doesn’t go through.”
And Goldsmith and Hayes reached out to a somewhat more even-handed expert for his take, which gave Faris’ quote some teeth:
Paul Nary, a management professor and M&A specialist at U. Penn’s Wharton School, posted on X that the situation will be a “more expensive adventure” given the delay. While the frustrations of Ellison; his father, Larry Ellison, the Oracle billionaire and deal backer; and others in the Paramount camp have taken center stage in recent days, WBD also faces a difficult path. Already preparing for its fourth corporate ownership change in the past decade, employees at the company will experience confusion and inertia in the coming months. And don’t forget, for a while they believed they were being taken over by Netflix after the streaming giant sealed a deal last December, outdueling Comcast and Paramount in the initial bidding rounds.
The company is “stuck in limbo for now,” Nary wrote. It “can’t make major changes to position themselves for survival if they believe the deal will fail, and can’t start the integration process/restructuring with $PSKY. From my perspective, I think this means WBD business may suffer either way, making it even more difficult for them to go back to being a reasonably well-positioned standalone firm if the deal doesn’t close, and also making Paramount’s already tough job of integrating, cost-cutting, and making this deal work if and when they do close even more of an uphill battle.”
And with the Ellisons now needing to factor in an additional line item expense their five-year plan didn’t necessarily account for, does anyone really think he’s gonna be in a mood to start greenlighting projects either?
I’d ask Mr. Murietta if he happened to have any pending business in front of either studio that might have been occupying his days when he wasn’t shuffling off to fanfests or deepening his resolve with his union. His last IMDB entry was the one-and-done Prime Video series PRIMO three years ago; you probably missed it, too. Before that it was 2009’s THE WIZARDS OF WAVERLY PLACE movie.
My own experiences with those more invested in trade organizations and bigger picture issues is that it’s a welcome distraction from the fact that they’re not actively working on anything else at the moment. My participation arcs mirrored the periods when my companies were in the process of being acquired and when I wasn’t sure if I was going to survive the regular rounds of layoffs. When you’re in limbo you tend to arrive early to the free screenings and make sure you’re there when the appetizer trays are first brought out. You tend to wind up schmoozing with folks with CVs like Murietta’s. It’s not a coincidence.
So one can’t help but cheer for someone like Pia Barlow, who made some headlines of her own yesterday courtesy of Hayes and Goldsmith’s boss, the intrepid Nellie Andreeva:
Warner Bros Discovery is waging legal war against Amazon, accusing the tech giant of “hurriedly seeking to pirate away a number of contracted employees” from multiple divisions.
The impetus for the complaint, filed July 21 in California Superior Court, is the hire by Amazon MGM Studios of …Barlow, EVP Originals Marketing for HBO Max, as VP and Head of Series Marketing. The appointment was announced by Amazon earlier today, three days after the lawsuit had been filed with Barlow’s case at the heart of it…While WBD has been in limbo for almost a year now, being the subject of a spinoff plan followed by a thwarted acquisition by Netflix and a pending one by Paramount, Barlow is the first known senior Warner Bros. executive to defect for another company. For many, there is a financial disincentive in cashing out stock options before the transaction is completed but WBD’s strict employment contracts are also said to be a deterrent.
“Amazon must be stopped,” WBD said in the suit, which plays on the old vs. new media “barbarians at the gate” narrative while throwing some arrows at the tech giant, which originated as an online book seller out of founder Jeff Bezos’s garage, calling it “the digital bull in a china shop.” “The one-time bookseller turned purveyor of (practically) everything under the sun, including, in roughly the last decade, original entertainment content, did not start out as a studio or production company,” the filing said. “And rather than build its entertainment-production workforce from the ground up, Amazon has chosen to ride on the coattails of other well-established Hollywood mainstays such as Plaintiffs by inducing contracted employees to breach their employment agreements.”
Grear Horneytoads. Barlow actually wanted to work at a company that isn’t staring down the barrel of a loaded pistol and hoping that legal maneuvering can stave off the inevitable. Lock her up.
And as for whomever on the WBD legal staff authored that complaint? I’d advise anyone looking for a writer on their next project to immediately reach out to that person and sign them to a first-look deal. Much sooner than I would take a flyer on the guy responsible for PRIMO. But more than likely, such an offer won’t be forthcoming from that person’s current employer. Limbo may look like it’s fun, but trust me, it ain’t.
Until next time…