from the do-not-pass-go,-do-not-collect-$200 dept

So Netflix has introduced that it’s shopping for Warner Brothers Discovery (together with HBO) for a whopping $82.7 billion. As we’ve well covered, it’s the newest in an extended sequence of pointless Warner mergers stretching again to the 2001 AOL acquisition, which all resulted in oodles of chaos, worth hikes, layoffs, and usually a gradual erosion in product high quality.

Netflix’s deal features a $5.8 billion breakup price and guarantees to keep up Warner Bros. present operations, “together with theatrical releases.” The deal doesn’t embrace Warner Bros Discovery’s struggling linear networks enterprise (CNN, TNT, HGTV and Discovery+) which Netflix correctly needed nothing to do with. These are scheduled to be spun out subsequent 12 months into their very own sagging sub-company.

Netflix is, after all, making all method of pre-merger guarantees about how the deal will be great for everyone, especially creatives:

“Netflix additionally made its pitch to filmmakers and creatives, writing that “by uniting Netflix’s member expertise and world attain with Warner Bros.’ famend franchises and intensive library, the Firm will create better worth for expertise — providing extra alternatives to work with beloved mental property, inform new tales and join with a wider viewers than ever earlier than.”

However as we’ve seen the final three or 4 instances Warner Brothers has been acquired, pre-merger guarantees imply completely nothing. The large debt created by these acquisitions inevitably ends in panicked price reducing, which often entails mass layoffs, (even greater) worth hikes, and a basic cannibalization of name and product high quality. It occurs time and again.

Of the suitors that would have purchased Warner Brothers Discovery (Comcast/NBC and Larry Ellison/CBS/Paramount), Netflix might be the “greatest” possibility. They’re (for now) the least up Trump’s ass of the three bidders; and usually might retain extra of the core Warner Brothers Discovery infrastructure and workers on account of fewer present redundancies.

That’s to not say the deal shall be good, essentially. If we lived in a non-corrupt nation with functioning regulators, the federal government doubtless wouldn’t enable any extra consolidation in mainstream company media, because the outcomes up to now have been nothing however dangerous for labor, customers, and markets. These corporations’ journalism arms, should you haven’t seen, prefer to downplay or ignore this truth in protection.

Play just a little recreation with me at dwelling: should you’re studying a narrative about this deal, cease and spot if the journalist and outlet, at any level, mentions the truth that the many years’ value of previous variants of Warner offers had been totally disastrous for labor, customers, creativity, and wholesome markets. As a result of that’s type of essential context in case your job is informing the general public of the reality!

The bungled AT&T acquisition of Warner and DirecTV alone resulted in a massive layoff spree including 50,000 people. However when the consolidated company press covers the newest merger, that’s not talked about. Why is that selection made editorially, do you wager?

In the meantime Netflix nonetheless has a hurdle to face: the bizarre zealots on the Trump DOJ and FCC. Paramount and/or the Trump administration has spent the final week seeding complaints in Republican-friendly media that the bidding process was unfair to Larry Ellison and CBS/Paramount, and that the Trump administration is concerned about the antitrust impact of a Netflix Warner Brothers combination.

The Trump administration couldn’t give any much less of a shit about antitrust or consolidated company energy; they simply need leverage over Netflix and/or to ensure their buddy Larry Ellison can purchase HBO and CNN. And so they’re mad at Netflix as a result of they put some gay people in shows about the military. The Ellisons might purchase the spun off TV belongings, however they could additionally nonetheless wish to leverage Trump to get far more.

So I might not be shocked that if in just a few weeks or so that you see Trump’s FCC lackey Brendan Carr launch some type of pretend inquiry into “irregularities within the bidding course of,” the place he talks quite a bit about Netflix’s consolidated energy “not being within the public curiosity.” The aim shall be twofold: to pressure possession over to Ellison, or a minimum of to (as we’ve seen with CBS mergers) pressure Netflix to kiss Donald’s ass.

The press (and the usual assortment of useful idiot pundits) will doubtless then assist Trump faux these inquiries are professional “populist” antitrust actions.

When you recall, the primary Trump administration sued to cease the AT&T Time Warner deal. That was heralded as a uncommon instance of the administration really caring about consolidated company energy by the press; nevertheless it turned out it was principally as a result of Rupert Murdoch had his personal acquisition provide for CNN rejected and wanted to scuttle the deal.

Maintain your eyes peeled for regulatory shenanigans. Even when the Trump administration doesn’t abuse FCC and DOJ energy to assist Ellison, they’ll actually abuse regulatory merger approval energy to try to pressure Netflix to kiss their asses in new and problematic methods (see: CBS, Verizon). And Netflix, no stranger to throwing ethics under the bridge when convenient, will very doubtless be pleased to oblige.

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Firms: netflix, warner bros. discovery


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