Yesterday was a big day in Hollywood, but not necessarily in a good way. In quick succession, we got the news that Warner Bros. had accepted the latest bid from Paramount, and that Netflix was declining to beat it. That means that although Warner Bros. and Netflix had a deal, Paramount will be the ultimate winner, assuming antitrust regulators don’t stop it, which seems unlikely. Now, Warner Bros. employees are reportedly preparing for a "blood bath."
While the outcome is a shocking one, considering how much Netflix acted like their deal was done, for many in Hollywood, the Warner Bros. situation was seen as a choice between bad options. Both mergers were seen as bad news for Warner Bros. as a studio, and for Hollywood in general. An unnamed Hollywood agent spoke to Page Six and said the only thing that was truly being decided was the method of execution. The agent said…
It was guillotine or firing squad. For 100 years, no studios were allowed to merge. It’s terrible for our business, terrible for Southern California.
The reason it’s terrible for the industry and the area is that, almost certainly, a large number of people are going to find themselves out of a job as the two companies merge and "redundancies" are eliminated. Thousands lost their jobs after Disney purchased Fox, and that merger could be a model for what is about to happen here.
Now, one might expect that major layoffs and corporate changes were going to happen regardless of who won out. However, according to Page Six, the Paramount merger is likely to be much worse than a Netflix deal would have been from a layoff standpoint.
The issue is that since Paramount and Warner Bros. are both 100-year-old legacy media companies, they are going to have essentially identical org charts, as they’re in the same business that is run in the same way. The result is what one employee expects will be a “blood bath” of layoffs. Another employee said…
There are so many overlapping departments, I can’t even wrap my head around it.
By comparison, since Netflix’s theatrical distribution business is much smaller and it doesn’t have a TV network or cable channels, there likely would have been more opportunities for Warner Bros. people to keep their jobs if they started working for Netflix. Warner Bros. employees were reportedly stunned by the news yesterday, with at least one person responding simply, “holy f-----g shit.”
It’s likely to be several months before we ever get to the layoff portion of this deal, as the merger still needs regulatory approval. However, once that point comes, we can be sure that many people, likely those who are currently part of both companies, will find themselves looking for work in a Hollywood that simply has fewer jobs available than it did just a few years ago.
