Merger Promises Are Worthless

It's hard to find something more worthless than pre-merger promises. And in a country where #manfluencers exist, that's really saying something.

Time and time again executives promise their latest giant merger will create untold jobs, synergies, and various public and labor benefits.

Time and time again the press parrots these claims as if history and our collective memory of past empty promises don't exist.

And time and time again those promises are revealed to be completely hollow lies to (temporarily) goose stock values, generate tax breaks, and prop up the "savvy dealmaker" personas of unremarkable knobs shuffling fake financials around in exchange for compensation disproportionate to any actual competence.

Nobody in this bizarre kayfabe has any financial incentive to learn from experience. And even before Trumpism, U.S. regulators, with only the scattered occasional exception, abandoned any pretense that they care about protecting the public interest when it comes to unchecked corporate power.

That's been especially true in a U.S. media sector mercilessly lobotomized by consolidation at the hands of billionaires. Billionaires that not only love pointless consolidation, but are engaged in an unsubtle ideological crusade to destroy journalism and informed electoral consensus.

For example, Trump-allied billionaire Larry Ellison recently gifted his nepobaby son not one but two major Hollywood studios to play with. The dad wants to build an oligarch-dominated autocratic media system akin to Victor Orban's Hungary; the kid desperately wants people to see him as a savvy media mogul.

The Skydance/CBS/Paramount merger announcement last year promised no limit of amazing creative synergies:

In the near-term, Paramount will leverage strategic investments to capitalize on identified synergies and opportunities to streamline its business, with a focus on forward-thinking approaches to content creation and storytelling, as well as providing value and stability for shareholders. Supported by RedBird Capital's business building and financial acumen, the newly combined entity will rely on best-in-class leadership and tech-enabled innovation to revitalize and position one of entertainment's most storied enterprises for long-term success.

Indeed.

Press outlets at the time parroted snippets from the announcement, failing to inform readers that media consolidation always results in high debt loads, higher prices, shittier products, and mass layoffs.

Right on cue, CBS "leadership" last week announced they'd be firing around seven percent of the company's staff and shutting down CBS radio after 100 years of operation to try and pay down merger debt. This was after many CBS journalists had already fled due to the company's effort to censor stories critical of Trump.

In a statement last week, CBS News boss Bari Weiss insisted this pointless butchering was somehow an act of innovation:

It’s no secret that the news business is changing radically, and that we need to change along with it.  New audiences are burgeoning in new places, and we are pressing forward with ambitious plans to grow and invest so that we can be there for them.  That means some parts of our newsroom must get smaller to make room for the things we must build to remain competitive.

Except Weiss' pursuit of "new audiences" at CBS has primarily involved pandering to the right wing with a bunch of lazy autocrat-friendly propaganda neither viewers nor advertisers are actually interested in. Weiss was hired to make ratings-grabbing agitprop, and it's very clear she's not very good at it.

While Weiss was hired by a billionaire to create autocrat-friendly state television, it's also clear she has genuinely deluded herself into believing she somehow has the magic sauce to not only fix the entirety of media, but to bring CBS into the viral social media era. But it's just increasingly obvious that's not true.

Weiss' past experience at her weird little troll blog Free Press (acquired by Paramount for $150 million in yet another pointless merger) hasn't translated to the mainstream with any sort of coherence. And I'd suspect she'll be replaced by someone decidedly worse by the end of the summer.

But wait, there's more.

With the blood barely dry from their last transaction, the Ellison family is promising lawmakers than their next big deal, the $111 billion acquisition of Warner Brothers, will result in a new golden age for Hollywood.

Here too you'll notice the same familiar pattern; namely a bunch of lies about how pointless consolidation will result in vast new Utopian outcomes, broadly parroted by a consolidated corporate press without much in the way of fact checking.

This was David Ellison's recent statement to California lawmakers, worried that the deal will bring significantly more layoffs to a Hollywood production system that's already reeling from COVID, past consolidation, and a massive migration of production overseas:

“I firmly believe that uniting Paramount and Warner Bros. Discovery presents a unique opportunity to build a true champion for the creative community, one that can and will bring more stories to life, support filmmakers and talent with real scale, and compete effectively on the global stage as an independent media leader. That is the true legacy of Hollywood, and my promise to you is to build a stronger Hollywood, by keeping both of these legacy studios operating separately, thereby preserving and potentially increasing jobs.”

There is zero evidence any of this is true.

The combined debt between the Paramount and Warner Brothers deals won't initially be paid for by Larry Ellison and his Saudi and Chinese backers. It will, as always, be paid for by consumers and labor in the form of mass layoffs, price hikes, corner cutting, eroded product quality, and generalized dysfunction.

There is also no indication Paramount execs are any more competent than the last folks that tried this same deal (including AT&T). In fact you could argue, looking at Bari Weiss and the bizarre recent legal troubles of Paramount President Jeff Shell, this is the most bumbling group of malcontents to attempt this gambit to date.

In addition to debt, Larry Ellison and Oracle are massively overleveraged with the AI hype cycle; if when the AI bubble pops the combination of interwoven potential disasters (including Donald Trump's mass lobotomization of all public safety and corporate oversight guardrails) could prove positively lethal.

The Ellisons not only have to deal with massive debt and a rising disinterest in traditional theaters and broadcast television, they have to somehow avoid a mass revolt among discerning shoppers that still have some agency in their media consumption habits (and are increasingly disgusted by Trumpism).

MAGA folks aren't interested in watching CBS because they already have countless other sources of right wing propaganda to choose from. Past viewers no longer trust CBS and are fleeing to the exits so quickly, CBS last quarter saw the worst ratings in a quarter century. What amazing, stable synergies.

Even under a worst case scenario where CBS and CNN implode, Larry Ellison still wins because he's destroyed another avenue for actual journalism (though the decline of journalistic quality at CNN and CBS began long before Trumpism).

U.S. journalism, a direct victim of this same consolidation, is financially incentivized to ignore history to protect the interests of sources, advertisers, and ownership. So we get a weird sort of pseudo-journalistic cosplay that likes to downplay or ignore the fact these deals are never in the public interest.

You could pluck any story off the newswires about these or any other major mergers and find consolidation's impact downplayed or ignored. AT&T's Warner Brothers merger, for example, resulted in 50,000 people losing their jobs, but you'll rarely see any coverage of this latest merger mention that.

Any unpleasant memories are just memory holed, like some drunk pedophilic disowned uncle.

U.S. business leaders generally enjoy a press that's completely captured and exists primarily as a direct extension of their interests, yet still routinely whine about how unfairly they're treated. U.S. business would be utterly inconsolable if we had a real business, tech, or political press with any lasting interest in the truth.

For the time being, the federal government is too corrupt to function, and is guaranteed to rubber stamp the Ellisons' Warner Brothers deal (despite a lot of populist bad faith election season prattle by MAGA about how much they loved antitrust reform and issues of "affordability").

That leaves a looming lawsuit by a handful of states s as the last line of defense against right wing media domination, higher prices, and thousands of new layoffs. If that fails, we'll have to find cold comfort in the fact that nobody involved in any of these companies appears to have absolutely any idea what they're doing.