Is Warner Bros. Going To Be Sold Again? A Hollywood Disaster In The Making
The entire media landscape feels like it has been in turmoil for the last few years as streaming, the pandemic, uncertainty at the box office, and the decline of traditional TV have all forced seemingly constant change in Hollywood. It has felt, at times, like the studios are trying to blindly shoot at a target that is moving unpredictably. What remains certain is that change is coming and coming fast. One thing that most people seem to agree on is that in order to survive, many of these big companies will need to consolidate in order to stay competitive. Well, it seems like another mammoth merger may be on the horizon and, once again, Warner Bros. will be at the center of it.
We should carefully note that nothing is certain right now and much of what is about to be discussed is hearsay for the time being. But it's come up often enough that it's certainly worth taking a look at. Most recently, Variety ran a piece regarding the allegedly very messy production of "Aquaman and the Lost Kingdom," which is due to hit theaters in December. "Some on the lot are convinced that another company, most likely Universal, will buy Warner Bros. within two years, making recent DC subplots and upheavals feel quaint," the outlet added towards the end of the article. And that brings us to the probable trainwreck to come.
We are talking about a company that has already been through two massive, messy corporate acquisitions in the last five years. First, AT&T spent years and $85 billion to acquire Time Warner, with that deal finally going through in 2018. Then, after only spending three years in the business of Hollywood, AT&T said to hell with it and sold off WarnerMedia to Discovery for $43 billion. It may not happen right away, but there is a growing sentiment that the company — now called Warner Bros. Discovery — will be sold once again in the coming years.
One big mess after another
In the last year and change, Warner Bros. Discovery and its CEO David Zaslav have been at the center of a lot of discussion, much of it not flattering. Zaslav has been ruthless in his efforts to save billions to help ease the company's massive debt load, which included axing more than $2 billion worth of movies and TV shows. We're also talking about a company that scrapped finished movies, most notably DC's "Batgirl." Sadly, this trend caught on, and other studios have begun purging stuff from streaming services and canceling projects, even projects that are already filmed.
This has helped to illustrate just how messy the streaming wars have become in the aftermath of the pandemic. Everyone went all-in on streaming in an attempt to emulate Netflix's success and, during the pandemic when everyone was trapped at home, that worked out okay. Now though, streaming growth has largely halted and the long-term realities of surviving in this business have changed. Not every streaming service that currently exists will make it in the long term. Others will join the media scrap heap alongside the ill-fated Quibi in the coming years. Nobody wants to be the next Quibi. So, what's the solution?
The prevailing belief is that more high-profile media consolidation will come in 2024 and beyond. Even though Warner Bros. Discovery is scarcely more than a year old, it's easy to see why an acquisition could be on the horizon. NBCUniversal, in particular, makes sense as we're looking at two slightly smaller studios, compared to a giant like Disney, joining forces to survive in the long run. Peacock is losing billions annually and seemingly has no path to becoming a real player in the streaming game. Max — formerly HBO Max — may be better positioned but is still struggling to find an identity. Their powers combined? That's a company that feels like it would be too big to fail, the massive pile of debt that would result from such an acquisition notwithstanding.
Consolidation is coming, one way or another
Maybe it won't be NBCUniversal buying Warner Bros. There is some evidence to suggest that Paramount is also putting a for sale sign on the lawn. So maybe it's Universal and Paramount that merge, leaving WBD to fend for itself until another, bigger fish tries to scoop them up. There have been consistent rumblings that Apple might make a play for a studio and, for a tech giant of that size, buying Warner Bros. probably wouldn't require taking on mountains of debt. Heck, there have even been rumblings regarding Apple buying Disney in recent months, even if Disney CEO Bob Iger says that's not going to happen. Similarly, Zaslav has said WBD is "not for sale." But CEOs can't just come out and say "Hey, my company is for sale."
At this stage, it's not super important to get caught up in the minutia of what it might mean if Universal and Warner Bros., specifically, were to merge. The thing worth understanding is that more likely than not, more of these big companies are going to combine forces. It's been happening for several years now. Expect it to keep happening. That means there will be more turmoil at the corporate level. More jobs will be lost. Streaming services will disappear in favor of bigger (and likely more expensive) combined offerings. More big franchises and classic movies will be housed under fewer roofs.
Disney's acquisition of Fox has been messy and has resulted in a legacy studio all but exciting the marketplace. 20th Century Studios now pretty much provides movies to Hulu with a few releases hitting theaters per year. More consolidation means less competition, which is probably a bad thing for those of us who love movies and TV. On a longer timeline, it's hard to say how this all ends, or what the media landscape will look like. What feels assured is that the ride will be messy. Arriving at this new normal — whatever it may be — will be bumpy and not exactly ideal for consumers.