Welcome to a new episode of “How the Hollywood Money Go-Round Turns.”
For those of you who haven’t been keeping up, in 2022, dashing explorer Discovery Networks swooped in to rescue Warner Media (owner of DC Comics, among other things) from an abusive marriage with that brute AT&T, who just wanted the old girl for her money and family connections.
But after a whirlwind romance, Discovery decided that it just wasn’t working out. Sorry my dear, it’s not you, it’s me. You know how it goes. Before you know it, WB was back on Tinder, looking for a new match among a select pool of well-heeled suitors (see “Another Year, Another Possible Owner for DC and Warner Bros.“).
The usual suspects lined up to make their pitches. Speculation ran rampant and bettors laid odds.
Rancor! Clarity! Drama! Last week, it looked like we got some movement. On Thursday, Paramount Skydance, who for several reasons seemed like the frontrunner, stormed off in a huff, announcing that “the Discovery process [presumably the internal process Discovery, the current owner of WB, not the legal requirement to disclose relevant information ahead of a transaction, though possibly that too] has been tainted by management conflicts” and the company was withdrawing its bid.
On Friday, Netflix, having elbowed its rivals out of the way, announced it would be assimilating one of the last old-line Hollywood properties into its data-driven content collective for a mere $83 billion (see “Netflix Buys Another Comics Company“). There are several reasons to think that might be the least-bad alternative for both DC and the other valuable cultural institutions wrapped up under the WB banner, although not without its problems.
But then, shocker! Skydance Paramount, with Presidential son-in-law Jared Kushner and a sled full of Saudi money in tow, shows up at the ceremony banging on the glass, hoping to run off with the bride before the nuptials are even consummated!
Good news, bad news. In some ways, a bidding war can be good for shareholders. The new Skydance offer is either a little bit or a lot higher than the reported $83 billion that Netflix is planning to cough up, depending on what reporting you read.
However in this case, Skydance Paramount’s move includes both the carrot of a slightly better offer, and the stick of causing some real mischief in a deal that has to get government approval to move forward. President Trump announced his intention to involve himself in the transaction, and while he is not the last word on the subject (the AT&T acquisition of Warner Bros. in 2017 went through over his objections), it is not helpful for Netflix to have his stubby finger on the scale for the Ellisons (owners of Skydance Paramount) and his favorite daughter’s husband.
It doesn’t sound like Netflix is going to give up without a fight. The company clearly sees value in the acquisition. Whether that value comes from the original IP, the physical distribution network that the streamer has always lacked, the Hollywood cache, whatever data WB entities own about its customers and the market, or something else, it apparently adds up to $83 billion, plus whatever it’s going to cost to make the Trump administration look the other way.
The bad news for companies and employees under the WB umbrella, including DC Comics, is that anyone who drops that kind of money, whether Netflix, Skydance Paramount, or some heretofore unknown party that comes out of the woodwork at the last minute, will be looking for “operating efficiencies” and “corporate synergies” to offset some of those costs.
Groundhog Day for WB. Of course this won’t be the first, or even the second, time WB has been through the wringer. Both AT&T and Discovery did their own restructuring, eliminating jobs, consolidating departments, and putting a bunch of projects including the legendary Batgirl movie into the “burn bag” of one-time merger-related expenses.
Presumably anyone left standing at DC or Warner Bros. has survived multiple rounds of these processes. They’ll have to repeat familiar dances with new partners to keep doing what they do, but at least they know the steps.
Considering that DC appears to be doing as well as it has in decades and DC IP in the form of James Gunn’s rebooted DCU and the current Batman franchise are bright spots on the company’s balance sheet, one would hope that the new bosses would look for their first cuts elsewhere, but who can say? Maybe the new owners will see no value in any of it and just shut it down or spin it off.
Collateral damage. The most depressing part of this whole saga going back decades is that Warner Bros. is the keeper of legitimately important cultural capital: not just DC, but the 80-year output of the movie studio, Looney Tunes and CNN, to name a few. With the exception of the latter, which occupies an outsized plot of free real estate in the imagination of Boomer political leaders who still see value in cable TV news, I doubt whether any of this matters at all in the financial calculation that throws 11-digit bids around like loose change.
It is possible to see the value of WB to Netflix if you squint. But for Skydance Paramount, which just bought another studio earlier this year, it feels like a notch on the bedpost. The only value to that kind of scale is the ability to squeeze others out of the market, to own the conversation, and to dictate the cultural agenda. There may be commercial value to those things, but they are not mere business goals. They are something else. Luckily we have government regulators to keep an eye on… oh, wait.
The worst is yet to come. It’s possible there will be a neat and clean resolution to all of this before long, but I wouldn’t bet on it. This has all the makings of a situation made for people who thought the Diamond Comic Distributors mess was insufficiently opaque, corrupt and destructive, and was much too small time to command attention.
This conflagration may have started in Hollywood, but it will be settled on Wall Street, and in Silicon Valley and Washington. None of those places inspires much confidence if your rooting interest is seeing DC and the rest of Warner Bros. cultural legacy landing somewhere it will be valued and invested in.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
Rob Salkowitz (Bluesky @robsalk) is the author of Comic-Con and the Business of Pop Culture, a two-time Eisner Award nominee, and a proud longtime contributor to Eisner-nominated ICv2.
Source: ICV2
