Chapter 1: What was the significance of David Ellison's acquisition of Warner Brothers?
All right, what's the craziest thing your daddy ever bought you? For David Ellison, son of Ora Clary, the answer would be Warner Brothers. Not the actual brothers. Larry Ellison bought his best boy David the studio. Larry had already bought David Paramount the studio, and Paramount the studio just beat Netflix out in a long, drawn-out saga to acquire... The WB!
The debt-ridden studio that owns Batman, Bugs, Harry, Carrie, Mad Max, The Matrix, Tony, Tyrion, all six friends, the Lego Cinematic Universe, and the . Oh, and CNN, you just bought Wolf Blitzer. The biggest night in Hollywood is around the corner, but we're gonna talk about the biggest deal in Hollywood and why it's probably gonna be bad for you on Today Explained.
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You would think, given what everyone said about us, that we would be the guys that would be doing the worst now. We're kind of the guys doing the best now.
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Chapter 2: How does the consolidation of studios affect Hollywood jobs?
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Today Explained. Joe Adalian is the West Coast editor for Vulture, where his piece on the mega deal between Paramount and Warner Brothers was titled, Paramount Wins, Everybody Loses.
I think the Ellisons sort of went for this in the short term, but even then, I do think you can break down the whole sort of idea that in the end, everybody could lose. Because People who are at Warner Brothers now are going to go through yet another merger, the third in about a decade. We are going to move now to this breaking news from Washington.
A federal judge there has approved without any conditions the $85 billion merger of AT&T and Time Warner.
Meanwhile, AT&T just announced a multi-billion dollar deal that combines its media unit, which is WarnerMedia, with Discovery Communications.
which means another round of layoffs, another round of divisions getting consolidated into other divisions. It means what was already a lean operation there, as so many places in Hollywood are now much leaner than they were 10 years ago, gets even leaner.
We are continuing to monitor some of those layoffs coming out of Warner Brothers' discovery.
Paramount Skydance is laying off more than 1,000 employees as the entertainment industry continues to struggle.
It means that for the next year, year and a half or so, rather than just focusing on making shows, people are going to be distracted about new bosses, new ways of doing things. Colleagues going away, new colleagues coming in to take their place or to do their jobs.
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Chapter 3: What challenges do creatives face after the Warner Brothers merger?
So Warner Brothers sort of loses.
So employees at Warner Brothers right out the gate lose. looking straight down the barrel of layoffs. Right.
People who are creatives, people who write and produce and direct TV shows and movies will be losers too because there's one less independent voice deciding whether their project can get made. You know, you can't have a bidding war now against Warner Brothers and Paramount for the same project. You know, Paramount Plus and HBO Max...
for the most part, don't actually compete right now for shows, but it means that for big movies, there is less of a battle that could go on. And even though Ellison has said that he will continue to do a full, robust supply of big feature films for both studios, as many as 30 a year, Almost nobody believes them.
And even if they make that same number of movies, they're going to pay talent a lot less because they can, right? There's less competition. So that means big things might not get made. Or if they do get made, people will make a lot less money of it. So from that sense, consolidation is bad.
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Chapter 4: Why might fewer movies be produced after the merger?
When people think of Warner Brothers, they probably think about movies. They probably think about Batman. I'm Batman. They probably think of Sinners.
These I hate.
They're vampires. And one battle after another from last year. I've had a few.
A few what?
A few small beers. Why is it, despite Ellison's promises here, you say that we won't be getting as many movies as we previously did?
Because they simply don't need to fill the pipeline as much as they did. They don't need to compete as much. Right now, you know, the studios compete against each other for every weekend, and they want to have the movie that's going to win. And that doesn't mean that you can't have Disney.
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Chapter 5: What impact does David Ellison's leadership have on Paramount and Warner Brothers?
Sometimes we'll have two movies in the marketplace. It does happen. But it means that you're not going to take as much risks because you're not going to want to cannibalize your bigger picture, your bigger project. And you only need so much to fill your pipeline, too, because one of the reasons studios make movies is to fill their television pipeline.
So Warner Brothers now is making movies with the eye on what's going to play on HBO Max. and what they can sell in the secondary market. Paramount for Paramount Plus. When you have one consolidated platform, you probably don't need as many movies. And had this deal gone to Netflix, by the way, there also would have been fewer movies.
Not for the reason that everyone thinks because, oh, Netflix doesn't want to do movies. I think Netflix would have continued, would have gotten into the theatrical business. I really do. But they probably would have made fewer Netflix original movies that were really expensive. A movie like The Rip, for example, with Affleck and Damon. Hey, what's in this attic, Desi?
Chapter 6: How is HBO's future affected by these industry changes?
What's up there?
Come on.
Don't know, never been. I already told you, I don't have any drugs.
Dog doesn't alert for drugs, alerts for money.
You know, do you really need to spend $200 million to get that sort of blockbuster feel? If Warner Brothers is already doing that kind of movie and you can monetize it in theaters, you maybe don't need to do, you can make your Netflix original films more like the kissing booth.
Um, truth be told, I've never kissed anyone before.
Something that costs $20 or $30 million and still does a big audience are K-pop demon hunters. Ah!
an acquisition that becomes the biggest movie netflix has ever had it's funny how a conversation about the movies invariably leads to conversations about streaming because of course so many people are experiencing movies through their streaming services people directly associate warner brothers with hbo uh what's gonna happen to what used to be like the marquee premium cable service hbo is it gonna have a name change again joe
Well, look, in fairness, and I've covered this before, HBO has always been HBO and is still HBO and never changed, right? But the bigger point is, does HBO survive? Is that I feel confident in saying some form of HBO as we know it will. The HBO that has a team that does shows like The White Lotus.
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Chapter 7: What are the potential winners and losers from this merger?
Piper, no! Which I know you love, Sean.
Who told you that?
Yeah. A little birdie. I just guessed.
I'm more sad about Chris Fleming live at the palace, personally.
I recently disgraced myself in front of Lin-Manuel Miranda.
This new company needs a premium brand, and they're going to get the godfather of all premium brands, no pun intended, with HBO. And if HBO can survive the barbarians at the gate of AT&T and David Zaslav from Discovery Networks, I think they can probably survive Paramount. David Ellison actually does like movies.
Okay, so don't worry so much about your HBO, but what about if you love CNN? Should you be worried that CNN's about to get CBS'd, if you know what I mean?
CBS News, America's newest place to see BS news.
Yeah.
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Chapter 8: What does the future hold for David Ellison in Hollywood?
I mean, well, look, if you love CNN as it is, you probably like really mainstream centrist news. I'm just going to say it. Because it's certainly over the last couple of years under David Zaslav, who is also in his own way and with his own masters sort of tried to... His corporate masters has tried to make CNN more middle of the road and a little more MAGA friendly. Democrats, they are for things.
Illegal aliens. You're for boys and girls sports. I do think... There's some reason for concern, yes, at least in the short term. There have been reports, credible reports, that people close to Paramount have assured the White House that we are going to change up CNN and make it better for you. How much of that is simply the messaging that now has to go on with so many of these big companies?
Once the deal closes, they're less beholden to the government, at least on the CNN side, because CNN is cable and the FCC doesn't directly control cable. The real worry is who runs this combined, almost certain to be combined news operation of CBS and CNN.
If it's Barry Weiss, the woman who is now in charge of CBS News, then yeah, there's probably reason for some people to be afraid of CNN going the way of CBS News and tilting further rightward, not just centrist, but center-right. Marco Rubio, we salute you. You're the ultimate Florida man.
Okay, so to review here, we've got a lot of losers. Potentially all of us because we're getting less stuff. Well, right. But surely there are some winners here, right? Because a bunch of people just made a ton of money.
Well, you know, let's talk about the consumer part of it. In the short term, though, there are some wins for consumers because let's face it, people are frustrated as it is now of trying to find the shows they want across multiple platforms and keeping track of too much TV and what's it on and when. If you get...
the consolidation where by themselves Paramount Plus and HBO Max are sort of second rate services. But if what Ellison wants to do works, if he thinks that by getting this sort of big scale, he can more effectively compete at the level of Netflix,
uh at the level of disney plus hulu there is some win for consumer in that you know you will be able to more easily access the shows you want you might be able to get track keep track of them and maybe in the short term you might even pay a little bit less depending upon what you already subscribe to other winners you know in the short term
Oddly enough, Netflix, even though Netflix lost this deal, in a way, they've won because as part of losing the deal, David Ellison has paid Netflix almost $3 billion, sort of as a consolation prize. And they've also gotten a look inside Warner Brothers books. They've sort of gotten a better sense of how Warner Brothers businesses worked. It's certainly an ego loss for them.
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