Op-Ed: Andrew Langer: Paramount and Warner Bros. shows how to make media work for Americans
Andrew Langer lays out the potential benefits of a Paramount merger with Warner Brothers.
One of the country’s best-known entertainment companies is up for sale. Where it ends up will reshape not only the future of Hollywood, but even more importantly, who controls the news and information Americans receive and how they get it.
After months of speculation and a tumultuous years-long attempt to right course, Warner Brothers Discovery put itself up for sale. The announcement plants a critical juncture for consumers.
The “info-tainment” industry has been beset by consolidation, and should one of the Big Tech or media conglomerates swoop in and buy up Warner Brothers’ assets, it would likely produce even fewer choices for ordinary families — which is generally a precursor to price gouging, censorship, and service reductions.
Fortunately, Warner Brothers has a suitor that could avoid a scenario that pits consumers against potential buyers, one that promises to add more competition and establish Warner Brothers as a bigger player in a news and entertainment industry that has been pocked by conglomeration.
Weeks before Warner Brothers Discovery put up a “for sale” sign, it received an attractive offer from Paramount-Skydance. Under the leadership of David Ellison, Paramount has since raised its bid three times, Under the leadership of David Ellison, Paramount has since raised its bid three times, most recently to nearly 90 percent above Warner Brothers’ stock price before news of the bidding started.
Warner Brothers owns one of Hollywood’s largest entertainment catalogues and one of the top streaming platforms, HBO Max. Not surprisingly, those assets have drawn many of the county’s biggest conglomerates into the bidding frenzy.
Paramount’s offer stands apart from the other interested buyers because of its promise to foster competition, not stifle it. As such, it appears to be the only option on the table likely to get past antitrust regulators — a reality that surely should factor into Warner Brothers’ decision-making.
A senior Trump administration official didn’t mince words when warning: “The Warner board needs to think very seriously not just on the price competition but which player in the suitor pool has been successful getting a deal done. And that points to [Paramount].”
A merger with Paramount would establish the resulting company as a serious contender in the streaming wars. The companies’ combined market share would amount to about seven percent of streaming subscriptions. While still well behind the sector leaders, Netflix and Amazon, which both control about 20 percent of the market, a Paramount-Warner Brothers duo would help continue to close the viewership gap and drive better products and services to consumers, rather than giving more control to those already at the top of the pile.
Paramount’s recent track record also bodes well for consumers. Its efforts to turn down the partisanship within the ranks of CBS and win back the trust of jaded viewers has been a breath of fresh air among legacy news institutions. Under Paramount-Skydance, CBS hired an internal ombudsman from the conservative Hudson Institute to help keep its journalists honest.
Installing Bari Weiss, the New York Times columnist turned Free Press founder, as editor-in-chief at CBS attracted backlash from the liberal elite, but irrefutably the move infused the news organization with newfound credibility among centrists.
Those recent actions matter because they hint at Paramount’s plans for Warner Brothers, which owns CNN. If Paramount’s past performance is any indication, a Paramount-Warner combo offers a blueprint for restoring competition and consumer choice in not only news, but also the broader entertainment and culture industry that shapes American living rooms.
Federal antitrust enforcement has often devolved into partisan witch hunts that don’t have consumers in mind. But in an industry already consumed by consolidation and that largely determines the news and entertainment users receive, Warner Brothers’ sale will have vast implications. Regulators shouldn’t be afraid to step in, if needed.
As Rep. Darrell Issa (R., Calif.) recently raised in a letter to the Trump administration’s antitrust leaders, a Warner Brothers acquisition by one of the major tech and entertainment titans would “diminish incentives to produce new content” and “undermine opportunities for the full range of industry professionals.” One might add that it will also affect how and where Americans get their news, which matters today more than ever.
Competition is good for consumers. It produces more choice, foster innovation, and helps keep prices low. Warner Brothers has a bid from Paramount that delivers exactly that, and, not to mention, a reasonable price for shareholders. With a decision from Warner Brothers expected as soon as next month, consumers should hope the company’s executives give Paramount’s offer full consideration. No doubt, federal regulators will be ready to step in if they don’t.
Andrew Langer is President of the Institute for Liberty.