Hollywood has spent the past few years insisting that everything is fine while cancelling films, removing shows from streaming platforms and laying off the people who actually make the entertainment. So naturally, the latest solution is to combine two enormous media companies into one even larger company. Paramount’s $81 billion acquisition of Warner Bros. Discovery has cleared one of its final major obstacles after the company reached a settlement with 12 US states that had sued to block the merger.
The deal will bring together two of Hollywood’s five remaining major film studios. It also places CBS, CNN, HBO Max, Paramount+ and a rather intimidating collection of franchises under one corporate roof. We are talking about everything from Harry Potter and DC to Top Gun, Mission: Impossible and Star Trek. That is less a content library and more a very expensive argument over who gets the good shelf. The states originally challenged the merger for several reasons. They believed it would reduce competition, hurt cinemas, increase prices and give audiences fewer choices. All fairly reasonable concerns when two companies that previously competed for films, subscribers and creative talent decide that competing is terribly inconvenient.
But Paramount has now made several promises to secure the settlement.
According to the California Attorney General’s office, the company has agreed to spend at least an additional $1.5 billion on US film production over five years. But wait, there’s more, a $47.5 million fund will also be established. All in the name of supporting workers affected by the merger and as a commitment to increasing its film output. And these aren’t polite gestures either. These commitments will be enforceable by a court. So if Paramount fails to meet its annual film requirements, it could face financial penalties and may even have to sell Miramax. Finally, something driven by real consequences.
Paramount CEO David Ellison described the settlement as the final clearance needed to complete the merger and said the combined company would “build a stronger Hollywood”. But California Attorney General Rob Bonta made it clear that the settlement did not represent support for the merger, even though the states had negotiated protections they believed would soften some of its effects. That’s one way to curb enthusiasm, I suppose. Now that’s a strange agreement if you ask me.
Because, if we understand this correctly, what is happening is that Paramount is promising to make more films. Why?….well, because it is buying one of the studios that used to make films against it. The company is creating a fund for displaced workers because ….yes, because that’s how mergers work. They displace people. It is also offering protections for cinemas because combining two major distributors could leave cinemas with less bargaining power.
Now for the big question: will these commitments help? The answer is unfortunately not a resounding yes. It’s more of a maybe. Because more domestic production means more jobs for writers, actors, and crews. And a guaranteed increase in film output also sounds encouraging at a time when studios have become very comfortable shelving completed projects. But a promise to produce more content does not automatically give Hollywood more variety.
Paramount and Warner Bros. may release the same number of films they would have produced separately, but one leadership team will now decide which stories receive funding, which projects reach cinemas and which franchises deserve another sequel. That is a lot of creative power concentrated in one place.
And we have already seen what usually follows a large entertainment merger. Executives talk about “efficiencies”, departments begin overlapping and thousands of employees discover that efficiency sometimes means their job now belongs to someone across the road. The $47.5 million worker fund practically admits that pain is coming. It may provide valuable training and career support, but it will not necessarily replace the jobs that disappear.
Teaching someone new skills is useful. But giving them an industry with enough employers to use those skills would be even better. And in time
audiences may eventually feel the change too. HBO Max and Paramount+ currently compete for subscribers, just as Warner Bros. and Paramount compete for attention at the cinema. Once those businesses belong to the same company, there is less pressure to offer different prices, take creative risks or convince viewers that one service provides something the other does not.
Perhaps the agreement will work exactly as intended. Paramount may make more films, protect theatrical releases and use Warner Bros.’ enormous library to build a healthier entertainment company. I would be very happy to discover that corporate consolidation had finally produced something other than layoffs and a newly redesigned streaming app. But it is worth remembering why these promises became necessary.
The merger raised enough concerns that 12 states tried to stop it. The settlement does not make those concerns disappear. It simply gives Paramount rules to follow while becoming one of the most powerful entertainment companies in the world.
Hollywood may get stronger as a result. The question is whether that strength will belong to the people making films, the audiences watching them or just the company that now owns almost everything.
