Warner Bros. Universal?

In 2017, Disney purchased, and merged with, 20th Century Fox. In the years since, the latter’s been restructured, rebranded and consolidated into Disney’s empire. While a solid move for Disney financially, creatively it’s been mixed. Marvel was now whole, having brought X-Men and Fantastic Four back into their fold, but the lack of healthy competition meant that Disney had less incentive to be kept in-check. This could be seen even within the company, as the merger led to the dissolution of Blue Sky Studios and the near-death of Nimona.

I mention this because a merger of this calibre might be happening again soon. Warner Bros. Discovery, led by CEO David Zaslav, has been struggling financially for years, while Universal has been experiencing tough times too. The companies have been in talks to combine for months, and it looks like a deal could happen within two years. While a big deal, it raises some questions and concerns. Particularly, it raises them in my own mind.

I’m mixed on this deal. Corporate mergers happen all the time, but that doesn’t always mean they’re good. Many mergers have been antitrust nightmares, causing mass-layoffs and forcing out smaller competition. These mergers have also stifled creativity, which is bad for consumers. So while there’s not much I can do, it worries me.

So that I’m not accused of being a complete downer, here are potential benefits to a merger between WB Discovery and Universal Studios:

Let’s start with costs. Both companies are struggling financially. WB Discovery’s been bleeding for a while, having been sold and purchased by various other companies repeatedly. They have mountains of debt, and this merger could levy some of it. In particular, it could give them an out to share the load. In that sense, this is a wise move.

Moving on, having two movie studios combine might allow them to bankroll bigger projects. If you want proof, look at Titanic. That movie was so massive for its time that it required two studios to fund it. It also paid off, with both studios benefitting. I know the movie landscape’s different now than in the 90’s, but this, in principle, could still work the same. Especially when both studios are owned by the same people.

Next, management. David Zaslav’s currently Warner Bros. Discovery’s CEO, while Universal’s run by CEO Bob Bakish. I can’t say much for the latter, but the former’s been heavily criticized for mass deletions and cancellations for tax write-offs. Among these include Batgirl, which, despite early screenings being positive, is now lost media. Assuming the merger goes through, there’s a possibility management could change. And that’d please Zaslav’s detractors.

Finally, there’s streaming. Contrary to initial promises, streaming hasn’t been the cash cow studios hoped. Disney+, for example, has reported massive losses since relinquishing the streaming rights to cricket in India, and they’re not the only ones. Max, Warner Bros. Discovery’s service, has seen many losses resulting from content deletion and poor management, such that they’ve shopped off projects to other platforms. By combining Max and Paramount+, it could allow both services to share streaming losses. Not to mention, it’d give consumers more options on one service.

My problem, however, comes with how this is corporate dilution long-term. Keep in mind the points I mentioned above: corporate restructuring. Corporate rebranding. Lay-offs. Mass-cancellations of projects. Antitrust violations. Factor in stifling creativity in the name of profit, and you have a recipe for more bad than good!

In fact, one need look at Disney’s acquisition of 20th Century Fox. First, they laid off thousands of employees. Next, they cancelled plenty of projects they deemed non-profitable. Then they rebranded 20th Century Fox as 20th Century Studios, making it yet another branch of Disney. To top it all off, any remaining projects, with few exceptions, were given next-to-no promotion, chief among these a Wes Anderson and a Guillermo del Toro movie respectively.

 

I know it’s hard to care about this, especially when corporate politics is complicated and confusing, but none of this is healthy long-term. And yet, the WB Discovery + Universal merger, assuming it happens, could see a repeat of the above. Sure, it wouldn’t be 1:1, no merger ever is, but the baseline problems are worrisome regardless. Never mind that people’s livelihoods are at stake!

Look, I don’t think the Disney + Fox merger was 100% bad. Ignoring the influx of Fox’s backlog to Disney+, I’ve enjoyed a lot of the Star Wars content that’s come out. I’m also excited for The X-Men to debut in The MCU, even if the franchise has been struggling qualitatively recently. But while I have personal reasons for liking that merger, they’re also selfish. On a strictly-creative level, the merger wasn’t great.

And there’s no reason to believe WB Discovery merging with Universal, even if it makes sense, won’t be a repeat of that. Especially given how creatively-choked the movie industry is. I know it’s fun to mock the X-Men IP under Fox, but they gave us Logan. That’s the kind of ambitious storytelling we’d never get under Disney. It’s not within their creative wheelhouse.

Ultimately, this reinforces how Hollywood needs to change. If the pandemic and strikes were indicative, the current model’s not working anymore. It’s hurting even the big players, which is why mergers like these are happening. If we want better, healthier and more-creative storytelling, then something’s got to give. Unfortunately, I don’t know how, or when, that’ll happen.