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A veteran Hollywood executive believes the pending merger of Paramount Skydance (PSKY) and Warner Bros. (WBD) could upend the movie industry for decades to come.
“I think the main impact on Hollywood, even though they say otherwise, is going to be … less production, but also less jobs because there’s a lot of overlap between the two places. And real estate, there’s 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 below).
Linton served as CEO of Sony Entertainment from 2012 to 2017. It was during Linton’s tenure that Sony was hacked, leaking sensitive emails about Hollywood’s biggest stars to the world.
Linton added, “The only thing I would say is that every time technology does touch the media business, it has a huge impact. We’re seeing that now, not just with streaming, but before DVD and everything else… I don’t think consolidation, whether it’s in news or in film and television, is necessarily good for output. Probably not, but unfortunately, I think it’s inevitable.”
David Ellison’s Paramount Skydance’s proposed acquisition of Warner Bros. Discovery is one of the biggest media deals in recent years. The deal, worth about $110 billion, came after a months-long bidding war that included Netflix (NFLX).
After taking the lead, Netflix ultimately declined to raise its bid in late February, saying the deal was no longer financially attractive. The decision clears the way for Paramount.
If the deal is completed, Paramount’s iconic media assets such as CBS, MTV and Paramount Pictures will be merged 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 deal still faces significant hurdles, mainly regulatory ones. The companies must obtain approval from U.S., EU and U.K. regulators and are expected to come under antitrust scrutiny given the size of the combined media empire. However, U.S. approval is considered possible given the Ellison family’s close ties to President Trump.
David Ellison is the son of billionaire Oracle founder and longtime Trump supporter Larry Ellison.