We are now at the most critical point in the potential sale of Warner Bros. Discovery to Paramount. And as such, we are also at the most critical juncture for the future of the American film industry.
In recent weeks, Warner Bros. Discovery shareholders voted in favor of the sale to Paramount. The merger has also been approved by the Department of Justice. Paramount CEO David Ellison has said the deal could be done as early as mid-July.
This isn’t happening without a fight. An online petition opposing the merger has been signed by over 5,500 film industry workers including actors, writers, directors, producers, editors, and cinematographers. Legal actions opposing the merger are taking shape. The European Union has announced an investigation into the deal. The United Kingdom’s Competition and Markets Authority has also started an investigation into the merger. And in the United States, a bipartisan coalition of state attorneys general are preparing a legal challenge.
It’s increasingly clear that state governments and other elected officials are our best hope to stop this merger. It is up to citizens to lobby their representatives, their state film commissions, and their state attorney general. Tell them to stop the merger.
I’ve been talking about the Paramount-Warner Bros. Discovery merger for months and I keep on this story because I believe this deal is an existential threat to the television and motion picture industry.
The vast majority of our media is controlled by just a handful of companies. This merger would combine two of Hollywood’s legacy studios including all of their cable networks and streaming platforms which includes HBO, DC Studios, New Line Cinema, Turner Classic Movies, CNN, CBS, TBS, TNT, Pluto TV, Nickelodeon, Comedy Central, MTV, and BET, and put them all under one corporate roof.
This merger will cause massive job losses and filmmakers will have fewer places to pitch their projects. Consumers will see their choices narrowed. Reduced competition between streaming services will probably result in higher subscription prices. Theaters are not going to be able to negotiate for exhibition deals and the combined studio will almost certainly produce fewer movies.
Paramount’s $111 billion dollar offer for Warner Bros. Discovery is largely funded by foreign money. The merged company would be almost half owned by non-U.S. investors. Furthermore, 38.5% of the merged company would be held by three Middle East investment funds. This merger amounts to a foreign takeover of what would be the largest media conglomerate in the United States. That means foreign entities will own a large stake of our entertainment but also our news outlets. And some of the countries involved, namely Saudi Arabia, do not have respect for freedom of speech the way we do in the United States. Paramount insists that these foreign partners will not have a say in content decisions but the idea that $24 billion does not buy influence is utterly fanciful.
And if this merger goes through, it’s entirely likely that the company will fail. The combined Paramount-Warner Bros. Discovery would be $79 billion in debt. It’s estimated that the company will be at a leverage ratio of seven times its earnings. Paramount’s credit rating has already been downgraded to junk status and S&P Global has said it will further downgrade Paramount’s credit if the merger goes forward. It’s unlikely that the company will be able to pay its debt. And if the merged Paramount and Warner Bros. Discovery collapses, it will take the rest of the motion picture industry down with it.
Here’s the sad truth of it all: I’d bet that the people behind this merger do not care. They don’t care if the merger results in massive job losses, they don’t care if it destroys two of Hollywood’s legacy studios, they don’t care if it cripples one of America’s most successful industries.
The Paramount-Warner Bros. Discovery merger is a private equity deal. Callous disregard for workers, for industries, for communities—even the entire economy—is central to the way they do business. Private equity is not interested in generating wealth by providing goods and services. It’s about extracting wealth by strip-mining successful businesses. Private equity is fundamentally parasitic and it destroyed companies such as Toys ‘R Us and Joann Fabrics by saddling them with enormous amounts of debt, declaring bankruptcy, and then selling the company off for scrap. Private equity isn’t interested in building a business. It’s a white collar chop shop.
And that could be the real endgame. Paramount absorbs Warner Bros. Discovery by taking on a massive amount of debt. It becomes the biggest company in the United States film and entertainment industry. Paramount is unable to pay its debt and the company goes bankrupt. The executives and the shareholders walk away with their pockets full. Meanwhile, everyone else is unemployed. With Hollywood’s biggest business gone, there won’t be enough movies playing at the cinemas and the theatrical industry dies. And that’s the end of the American film industry.
This does not have to happen. The deal can be stopped. But we need everyone to act now. The next few weeks are going to determine the future of the American film and television industry.
I want to take a minute to single out the online film commentators so active on YouTube and social media. A lot of you are not talking about this. We need you to show up. If you care about motion pictures at all, start making videos and posts opposing the Paramount-Warner Bros. Discovery merger and encourage your audience to start making noise.
For everyone else, contact your state attorney general, your legislators, and your state film commissions. You can find contact information for all of those groups below. I’ve also created a draft of a letter you can use as a basis for those messages. When you do reach out to these politicians, please be concise, impassioned, and respectful. We need to persuade, not to bully.
Contact resources:
Find your state attorney general.
Find your state film commission.
Find your state legislators.
Find your congressional legislators and your senators.
Here is a sample letter you can use to contact government officials and anyone else who might be influential in stopping the Paramount-Warner Bros. Discovery merger.
Dear [TITLE/NAME],
I’m writing to you regarding the possible sale of Warner Bros. Discovery to Paramount. This merger would be a disaster for consumers, for workers, and for the film and television industry and it should be stopped.
The sale of Warner Bros. Discovery to Paramount will result in mass layoffs, cripple the theatrical industry, and create a monopoly that will hurt workers and consumers. Filmmakers will have fewer options to get their projects financed or distributed. Theaters will have no leverage to negotiate exhibition deals. Consumers will suffer from reduced competition between streaming services.
The merger should also be stopped because it amounts to a foreign takeover of what would be the largest media conglomerate in the United States including entertainment and news outlets.
We need the government to protect the film industry and the public from this unnecessary, monopolistic, and illegal merger.
I hope you will lend your efforts to stop the Warner Bros. Discovery sale.
Sincerely,
[Signature]