It’s been only a couple of months into this back and forth battle between two media titans in Hollywood over the ownership of another media titan.  After declaring it’s intent on taking ownership of Warner Brothers last fall, the new Paramount media empire under the leadership of Skydance opened up a pandoras box that may likely change the make-up of Hollywood and movie-making in general forever.  Paramount’s intentions were ambitious, but ultimately they found themselves out maneuvered by Netflix, which put in the more lucrative bid for Warner Brothers CEO David Zaslev.  Netflix’s intentions were to bid as high as Paramount was in their first pitch, but say that they only were looking into buying the parts of Warner Brothers that weren’t connected to television broadcasting.  Since the merger with Discovery Networks in 2022, Warner Brothers has struggled to keep their massive media empire in top form, so they were looking to re-split the company up and sell each part for profit to new owners.  Warner Brothers would retain it’s movie production infrastructure, it’s studio lot, and it’s legendary library, while Discovery would be bundled together with all of the cable channel assets that Warner Brothers already held, such as networks like TBS and TNT, as well as the new channel CNN.  Paramount’s new owners, the Ellison family who had created Skydance Entertainment, were intent on collecting the entire package of both Warner Brothers and Discovery, but Netflix’s very huge offer to buy just the WB side of the business perhaps may have put Paramount out of reach.  They may still be able to purchase the spun off Discovery side, which will be worth significantly less, but from the actions that the Ellison family has taken in the wake of their dismissed offer indicates that they are still intent on winning the entire thing.

David Ellison, the new CEO of Paramount Skydance, and son of Oracle founder Larry Ellison, escalated things pretty heatedly by trying to circumvent David Zaslev’s agreement with Netflix, and go directly to the Warner Brothers Discovery shareholders in what is known in the business world as a hostile takeover.  But there’s still the flaw in their overall plan as they try to appeal to the shareholders with new bids to buy out the company with an assessment that still falls short of the value that Netflix has put on the Warner Brothers side of the business alone.  As it currently stands, Warner Brothers shareholders seem to be backing Zaslev’s plan to split the company up and secure two profitable sales instead of just the one.  Paramount may soon try to double up their offer if they truly want to gain the whole thing, but by that point, they may put themselves so deep in a debt hole that it could thwart any long term plans they have in building up their business.  This is the same situation that Disney has found itself in after they bought (and some would say overpaid) 20th Century Fox.  Disney beat out Comcast for the ownership of the legendary movie studio, but the cost was so high that it has put Disney into a debt whole that they’ve been trying hard to dig themselves out of.  Disney isn’t suffering too much, but having to deal with Covid on top of paying down the debt they accumulated from the acquisition of Fox led to many severe cut back over the last decade, and it’s led to a loss in quality control with many of their properties like Star Wars and Marvel.  Also, they own the massive Fox library of movies and shows, and have barely done anything with it.  Eventually things will be sorted out at Disney, and signs have recently shown that they are balancing out already for the studio, but it was after years of cost cutting, layoffs, and damage to the brand.  Whoever ends up getting Warner Brothers in the end will likely have to deal with some of the same problems, and it’s a symptom of one of the larger problems facing the industry as a whole, which is the trend of media consolidation negatively affecting the artform of movie-making.

Much like the banks, communications, and airlines, Hollywood is an industry that has fallen into the trend of consolidation as a means of generating profits for shareholders at the expense of the consumers.  This isn’t something new to the business however.  Movie studios have risen and fallen, and sometimes it was the regulating power of the government that had to step in to make the movie studios play more fair.  Ironically, one of the biggest regulatory smackdowns that affected Hollywood for years also involved Paramount Pictures.  The Paramount Decision delivered by the Supreme Court in 1948 broke up the monopoly that movie studios had over distribution in the early years of cinema.  Before the decision, the studios owned the movie theaters that their films played in, meaning that they had completely control over the programming.  It was great for the Studio system, but bad for the consumer, because depending on the market, your access to the movies would be limited by who owned the theaters in your area.  It also shut out independent theater owners from having access to movies that were in high demand.  So, recognizing that the movie studios wielded too much power over the access to the movies they made, the Supreme Court broke up their monopolies, which in turn led to the rise of the movie theater industry that ran independently from the studios.  This led to new exhibition innovations over the years that would in turn help to revolutionize Hollywood, such as the creation of multiplexes and large formats like IMAX being used for blockbuster films.  Had the Paramount Decision not been laid down, cinema would be very different today, and likely wouldn’t have proliferated like it had and become consumer driven.  For an industry to survive, it needs competition, and the more of it the better.  Monopolies only end up stifling innovation, because when fewer and fewer companies own a giant percentage in the market, they have less incentive to make changes that lead to improvement in their industries.

Unfortunately over the years, the regulatory restraints that helped to keep Hollywood in a competitive nature for a while have lessened, and we are seeing a renewed push to consolidate our media landscape again so that more power is in the hands of fewer people.  One of the biggest moves that has caused this in recent years is the rise in streaming.  Streaming offered Hollywood a new way of distributing their products; one which faced fewer regulatory restrictions than distributing through movie theaters and home video.  Netflix jumped on board this new technology early and it has grown them to such a level that they are now making a play to buy a big chunk of the old Hollywood with Warner Brothers.  All the other studios tried to jump in to compete, but Netflix has still managed to outpace them all.  Unfortunately, it’s all coming at a cost, with the movie theater industry suffering a significant reduction in revenue as they have had to adjust in this new streaming dominated environment.  In many ways, Netflix and streaming’s rise in general is Hollywood’s way of clawing back some of that monopoly like power they had before the Paramount Decision was thrust on them.  And indeed, the Paramount Decision has been defanged over the years, to the point where it no longer is enforced.  Movie studios have been able to own individual theaters across the country in years past, such as Disney buying up the El Capitan and Netflix buying Grauman’s Egyptian Theater (both in Hollywood), but in the last couple years we saw one major studio buy up an entire chain of theaters when Sony Pictures became the new owners of Alamo Drafthouse.  On the plus side, an institution as beloved as the Alamo Drafthouse has been save from bankruptcy, but on the other hand, they are now beholden to a mega corporation like Sony.  Is it possible that we might see more studios buying up more theater chains.  Alamo Drafthouse doesn’t quite have the same reach as say Regal or AMC, but it’s not that far off to think of a media conglomeration like Apple or Amazon buying up those chains just like Sony did.

That’s the other big fear being cast over Hollywood; the groups that are coming in to buy up these legacy studios.  It’s not unusual for the big Hollywood studios to have been part of some larger conglomerate.  At one point, Paramount Pictures was owned by an oil company called Gulf+Western, and this was during a time when Paramount was experiencing it’s Golden Age in the 60’s and 70’s, with movies like The Godfather (1972) coming from their studio.  Warner Brothers at one point was owned by AT&T and Columbia Pictures of course is now just referred to as Sony Pictures.  Out of all the major movie studios in Hollywood, only one has managed to retain it’s own independence throughout it’s whole history, and that’s Disney, which in a way has become a conglomerate in it’s own right.  One way or another, Hollywood has done what it need to do to keep the showbiz rolling along, including many of it’s most storied studios having to sell to outside interests.  The only hope that we can get from this shuffling around of ownership in Hollywood is that the studios themselves will manage to maintain an identity through all of it and still deliver for audiences.  Gulf+Western managed to succeed with Paramount during it’s time because they had someone like Robert Evans in charge of production; a guy who could pick all the right films to make.  But, when a bad leadership team is in place, one that usually is put in by a corporation that doesn’t know how to run a movie studio, it leads to some disastrous results.  A major reason why Warner Brothers is in the position of being bought out now is because of poor management in the past, especially after the disastrous launch and re-branding of HBO Max and the Project Popcorn initiative that saw them suffer heavy financial losses.  But bad management alone is not the only worry.  A lot of the new suitors that are trying to consolidate power in Hollywood are making changes that will fundamentally change Hollywood, and not always for the better.

Coming back to Paramount Skydance again, there are some troubling signs about what might happen to both Paramount and Warner Brothers if both were to come under the control of the Ellisons.  Larry Ellison is a major figure in the world of big tech, and one of his most recent business ventures has been to invest heavily in the field of AI.  This has boosted his net worth making him one of the richest men in the world as his Oracle data centers and cloud services have been instrumental in building the rise in AI.  And with his son David now calling the shots at Paramount, it’s very possible that AI is going to be integrated into the productivity of that studio to a very invasive degree.  It’s something that we are already seeing being played out at another massive data driven company that also now owns a legacy studio.  Amazon became the owners of MGM 2021, which itself was already a heavily diminished brand from it’s heyday, and in the years since people have noticed that they’re movie output has leaned very heavily on Amazon product placement.  The notorious straight to streaming remake of War of the Worlds (2025) was ridiculed heavily for it’s shameless incorporation of Amazon branded products, but it doesn’t just stop at the things we buy off their website.  Amazon is also a web hosting platform for much of the internet, and they are very much trying to jump on that AI bandwagon.  Their most recent action film release, Mercy (2026) starring Chris Pratt and Rebecca Ferguson, is just straight up pro-AI propaganda, and that is a tad bit concerning.  It’s also very sad given that it’s an MGM release, further tarnishing that legendary brand.  At this moment, we don’t know what the Ellisons may end up doing with Paramount because they have only just started there.  And it’s not a good sign when David Ellison’s first action as a studio head is to aggressively pursue the acquisition of another studio.  He should honestly prove himself at Paramount first before we think he would do a good job of running Warner Brothers as well.  The meddling from Larry Ellison is also not a great bode of confidence, given his shady ties with fellow financers.

Netflix being the other top contender isn’t ideal either.  If their streaming business model were to be applied to a studio like Warner Brothers, it would be Armageddon for the movie theater and home video industries.  Netflix Productions CEO Ted Serandos has publicly put it out there that he would honor the same theatrical window that Warner Brothers already has for all their future projects, but what guarantee do we have that he’ll keep that promise?  Netflix is also another mega corporation that’s built on collecting data, and they are not opposed to incorporating more AI technology into their platform.  One of the more disturbing ideas that has been floated around with regards to places like Netflix and Paramount is a thing called User Generated Content.  The movie studios basically want to turn their streaming platforms into another YouTube space, with more of the platform being devoted to short videos made with AI to boost the content available on their platforms.  It’s one of the reasons why Disney allowed OpenAI to use their IP characters for their video generating AI software Sora.  Disney at some point wants to host these AI videos on their streaming platform, creating more user engagement similar to the traffic that YouTube sees on a regular basis.  Unfortunately, it minimizes what makes streaming worthwhile in the first place, which is to have movie and TV shows on demand.  By turning these platforms into YouTube clones, with lower quality AI videos as their main draw, it continues to devalue media in general.  It’s already bad enough that movies and shows have been reduced to being called content.  Now they’ll have to compete for attention with AI shorts, which by the way the users on the platform will never be able to own for themselves, because these streaming giants will own all the rights.  That’s one of the disturbing realities of tech companies starting to move in an take over Hollywood.  It’s a further erosion of the things that made movies special.  You just know that this AI driven stuff is what will be boosted by the algorithms, and the movies that were made by hand and employed hundreds of people are going to be push into obscurity.

In any case, the most immediate problem is that Hollywood is going to feel a lot smaller.  No matter who ends up with it, Warner Brothers will no longer be independent, and it may end up loosing it’s identity in the process, like how 20th Century Fox has now just become 20th Century Studios, a subsidiary of the Disney Company.  Every time there is one of these consolidations in Hollywood, it makes it all the harder to get anything made because one more buyer has been taken out of the market.  But, it’s something that can’t be stopped at this point.  By law, Warner Brothers must be sold to the highest bidder in order to please their shareholders.  The fact that such a transaction is so insanely expensive that only the biggest corporations in the world would have the kind of capital to make it happen is itself another troubling aspect of all this.  More and more money is in fewer hands these days, and the ones with the kind of capital to buy a legendary, 100 year old studio like Warner Brothers are also the ones with not the greatest intentions for running a studio the way it should be run.  A lot of these acquisitions usually leads to a loss over time in the original studio’s identity.  MGM is a shell of it’s former self, and Amazon is not exactly helping to restore it to glory.  We don’t even know how Paramount will be under the Ellisons because all they’ve done is try to buy more of the pie that is Hollywood.  Netflix could have kept growing to become a competitor with all the other major studios, but instead they’re using their capital to move into a legacy studio.  In the end, whoever gets Warner Brothers will then have ownership of one of the greatest movie libraries in Hollywood, if not the greatest one.  But the cost will be severe for the industry, as many people will be laid off due to redundancies and the competition between studios will be reduced.  Like I said before, industries see better innovation when there is competition.  When the number of studios in Hollywood is reduced by one, we get less needs from those remaining studios to improve on their own output.  Eventually, prices will rise while the “content” becomes less appealing, because there is less care put into them.  That push for User Generated Content is one of the most troubling new trends, though hopefully the failure of Quibi showed that consumers are not interested in paying premium prices for short form content.  It’s up to us the consumer to keep the standards up with our demands of the studios, and let’s hope that we’ll make our demands heard depending on who ends up with Warner Brothers in the end, because that’s what a studio with it’s great legacy of making our lives better with it’s movies deserves.