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A veteran Hollywood exec thinks the impending combination of Paramount Skydance (PSKY) and Warner Bros. (WBD) could upend the business of movies for decades to come.
“I think the primary impact on Hollywood would be, although they say otherwise, … a reduction in the output but also a reduction in jobs just because there’s a lot of overlap between the two places. And real estate, a lot of overlap in real estate,” former Sony Entertainment and current Snap chairman Michael Lynton told Yahoo Finance’s Opening Bid Unfiltered podcast (video above; listen in below).
Lynton served as CEO of Sony Entertainment from 2012 to 2017. It was on Lynton’s watch that Sony got hacked, leaking sensitive emails about Hollywood’s biggest stars to the world.
Lynton added, “The only thing I would say is that every time technology does touch the media business, it has a dramatic effect. We’ve seen this now, not just with streaming, but prior to that DVDs and everything else … I think consolidation, whether it be on the news side of things or the film and television side of things, isn’t necessarily good for the output. It probably isn’t, but I think it’s unfortunately inevitable.”
The proposed acquisition of Warner Bros. Discovery by David Ellison-led Paramount Skydance is one of the largest media deals in recent years. The agreement is valued at roughly $110 billion and emerged after a months-long bidding war that included Netflix (NFLX).
Netflix ultimately declined to increase its bid in late February after being in the pole position, saying the transaction was no longer financially attractive. That decision cleared the path for Paramount.
If completed, the deal would combine iconic media assets, such as Paramount’s CBS, MTV, and Paramount Pictures with Warner’s HBO, CNN, and Warner Bros. film and television studios. It would create one of the largest entertainment companies in the world.
The transaction still faces significant hurdles, mostly on the regulatory side. The companies must secure regulatory approval in the United States, the European Union, and the United Kingdom, and antitrust scrutiny is expected given the size of the combined media empire. US approval is seen as likely, however, given the Ellison family’s close relationship with President Trump.
David Ellison is the son of billionaire Oracle founder and longtime Trump supporter Larry Ellison.