“Whenever media conglomerates consider gobbling up assets to become even bigger, their executives tout synergistic benefits that will result from the deal,” said Ross Benes, eMarketer senior analyst at Insider Intelligence. “Media executives with compensation tied to stock and buyouts like these big deals, but in the end, customers and company employees end up worse off.”
Benes noted that a Paramount and WBD merger would likely result in “increased layoffs, conflicting branding, confused customers and a giant company so beleaguered by debt that it’d stand little chance to thrive.”
Of course, Warner Bros. Discovery has already made headlines for shelving numerous creative projects and removing content from its streamers in the name of tax incentives, so the creative community (and Batgirl fans) haven’t been thrilled with the news on social media.
Though WBD could potentially take advantage of other tax incentives with the deal, when all is said and the clandestine lunch meeting merger talk is done, the timing might not be right.
“Given the declining prospects of traditional TV, investors should proceed with caution before they cheer on this merger, which would saddle the combined entity with albatross-levels of TV assets,” Benes said. “It’s also risky to push a deal of this size during a presidential election year when antitrust legislation is making a comeback.”
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