Jon Allsop writes on the possible merger between Paramount Skydance and Warner Bros., and the involvement of the Trump Administration and Netflix.
Years passed. A.T. & T. and Time Warner fought and broke up; the latter’s assets were spun off and merged with Discovery. Last summer, Paramount Skydance, itself a newly merged media company chaired by David Ellison, the son of the tech billionaire and Trump ally Larry Ellison, put in a bid to buy the combined Warner Bros.
Discovery. It said no, thanks, but the interest did ultimately trigger a sales process, and a bidding war. Trump was, by now, back in office, and the issue of CNN again reared its ugly head. Paramount Skydance, which already owns CBS News, had courted controversy by pulling the network in a Trumpward direction; according to the Guardian, Ellison père dangled the prospect of similar changes at CNN, including the ouster of specific anchors—Brianna Keilar; Erin Burnett—whom Trump is known to dislike. By December, the Ellisons were on their heels: Warner Bros. accepted a rival bid from Netflix. Trump didn’t sound pleased. “They have a very big market share,” Trump said, of Netflix. “I’ll be involved in that decision.” Fast forward to this month, and Trump was telling NBC that, actually, “I’ve decided I shouldn’t be involved” in the merger, and that “the Justice Department will handle it.” Given that Trump and his D.O.J. have themselves merged—see the new, giant Trump banner on the building’s façade—this claim seemed dubious. Sure enough, by this past weekend, Trump was bashing Netflix again, calling on the company to remove Susan Rice, a former top Obama official, from its board after she predicted future “accountability” for corporations that have bent the knee to Trump. Meanwhile, Paramount, which never gave up on its pursuit of Warner Bros., was given the opportunity to submit a final, improved offer, and did so. Yesterday, Ted Sarandos, the co-C.E.O. of Netflix, met with officials at the White House for talks that were reportedly cordial, yet ominous for the company’s deal prospects. Around the same time, Warner Bros. announced that it had deemed Paramount’s latest bid to be superior. Netflix had four days to counter it. An hour or so later, however, it announced that it was walking away, stunning the media world. Netflix projected insouciance. “We’ve always been disciplined,” Sarandos and Greg Peters, the other C.E.O., said in a statement. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” Investors and Wall Street analysts seemed to agree; various observers suggested that a tie-up doesn’t look great for either Paramount or Warner Bros. Others freaked out, not least at the prospect of the Ellisons controlling CNN. Mark Thompson, the network’s current chairman, warned staff not to jump to conclusions, but many quickly did. Many looked at the Ellison-era CBS News as proof of concept; indeed, it’s very possible that that unit will somehow be fused with CNN under the stewardship of Bari Weiss, the anti-woke TV-news neophyte whom David Ellison tapped to lead CBS News in the fall, with results that have, variously, been cringe-inducing, icky, and democratically concerning. “It’s hell over here,” a CBS source told Justin Baragona, a media reporter at the progressive news site Zeteo, last night. The freakout, they added, was justified. In a general sense, I’d agree. Weiss has not exactly turned CBS News into Pravda—and, as I’ve written before, she appears to be less a Trump lackey and more a standard-bearer for a tedious, adjacent strain of billionaire-class faux-contrarianism. But, at minimum, her corporate overlords clearly appear drunk on some cocktail of cowardice and greed, and the concentration of multiple major news organizations in their hands is precisely the sort of thing that people meant when they warned against the United States turning into Viktor Orbán’s Hungary. Indeed, as I see it, no one should get to own two powerful national news networks, regardless of their politics. Similar logic applies—or applied, anyway—to the prospect of Netflix taking over Warner Bros., even without CNN. Given the ghoulishness of the Ellisons, it might have been tempting to cheer Netflix on, as the Good Suitor. But their takeover would have represented an even greater consolidation of corporate power, albeit one set to the jaunty string-pop of “Bridgerton” rather than “The Imperial March.” As Richard Brody observed in December, many Hollywood people saw the prospect as “existential, perhaps portending the end of mainstream moviegoing.” Trump may have been acting disingenuously when he highlighted the resulting market share. But his words weren’t wrong. This week, I wrote about a much smaller, yet still highly consequential, media merger—a proposed deal for Nexstar, already a prolific owner of local TV stations, to grow further by taking over a rival, Tegna—and how it is contingent on Trump officials doing away with an obscure federal law barring such companies from reaching more than thirty-nine per cent of households nationwide. Brendan Carr, the chair of the Federal Communications Commission, is supportive of the Nexstar deal, and of nixing the cap. Other proponents of the deal have sought to assuage concerns about unconstrained broadcast conglomerates by pointing out that D.O.J. antitrust enforcers will still get to weigh in. For opponents, such reassurances might have carried more weight a year or so ago. Initially, on the subject of antitrust, Trump’s second term looked contiguous with the Biden Administration, which aggressively went after big mergers; Trump’s new antitrust chief, Gail Slater, was plucked from the growing corporate-skeptic wing of the G.O.P., and won praise from many progressives. This impression, however, was always complicated, and as time passed, the enforcers started to look more like enablers. There were growing allegations that MAGA-aligned lobbyists for big corporations were effectively navigating around Slater. This month, she found herself out of a job. Various observers concluded that MAGA’s turn against big business was over, if it was ever sincere to begin with. The Administration appears, increasingly, to favor not only big businesses that Trump likes but big business, period—even if he clearly favors the former much more. Paramount’s bid now appears to be on a glide path, at least at the federal level. There are still antitrust hurdles to clear: European regulators could object, as could U.S. state officials. But the former hurdle looks easier for Paramount to clear than it would have been for Netflix. And, as Matt Stoller, a researcher who opposes monopoly power, noted prior to yesterday’s news, the last time that states challenged a federally approved merger—between Sprint and T-Mobile, during Trump’s first term—they lost in court. I’ve found myself thinking back, for now, on that first Trump term. I recall being irritated at the time by media coverage of the proposed A.T. & T.–Time Warner deal, much of which focussed on the outrageous apparent premise of Trump’s opposition without really engaging with the substantive reasons to criticize the deal—and these were very real. In a speech in 2018, Delrahim, Trump’s antitrust chief, described his legal fight against the Time Warner merger as “potentially historic,” and his broader goal as “protecting American consumers through enforcement of the antitrust laws.” These days, Trump may be back in office, but Delrahim isn’t. He now works for Paramount Skydance, where he is accelerating its merger with Warner Bros. ♦
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