from the merge-ALL-the-things! dept
If you recall, AT&T spent nearly $200 billion on megamergers thinking it was going to dominate the online video advertising space. But after spending a fortune on DirecTV and Time Warner, laying off 50,000 people, killing off popular properties like Mad Magazine and DC’s Vertigo imprint, it quickly became clear that AT&T executives had absolutely no idea what they were doing.
After stumbling around drunkenly for a while, AT&T returned to what it’s best at (running broadband networks and lobbying the government to crush broadband competition), and spun off Time Warner into an entirely new company, Warner Media. Warner Media immediately then turned around and announced a blockbuster merger with Discovery, creating the creatively named Warner Brothers Discovery.
If you’re a consumer or employee at any of these brands and companies, the last few years have proven to be a befuddling mess. Remember that the AT&T acquisition of HBO and Time Warner resulted in so many different brands it even confused employees at AT&T. Despite efforts to consolidate content, it’s somehow only gotten dumber since then.
Managers at the new company have taken a hatchet to HBO’s offerings in particular, culling a wide variety of popular content to cut costs. That includes roughly 200 episodes of popular shows like Sesame Street and dozens of films and shows overall. Why? In part because the new consolidated company doesn’t want to pay residuals in a bid to make deal financials make sense:
While HBO Max already paid for the production of these shows, it’s still on the hook for residuals, including so-called back-end payments to cast, crew and writers, based on long-term viewership metrics.
By removing these films and shows, especially the ones HBO Max created rather than licensed, executives can cut expenses immediately. Warner Bros. Discovery has promised at least $3 billion in synergies stemming from the merger of WarnerMedia and Discovery, announced in May.
Ah, megamerger synergies.
There’ve been several new additional casualties thanks to this latest series of mergers, including TBS’s Full Frontal With Samantha Bee (Turner and TBS merged with Warner Brothers way back in 1996). With the merger of HBO Max and Discovery+, they’re hoping to “declutter” what’s now just a discordant parade of content, much of which executives didn’t really even want. There’s also been just a steady parade of layoffs of employees they didn’t want either.
HBO employee John Oliver went so far as to call this final form version of HBO Max little more than a “series of tax write offs”:
Again, this is just another example of the U.S.’ harmful obsession with megamergers, consolidation, purposeless (outside of stock fluffing) deal making, and growth for growth’s sake. All of these deals make perfect sense to the executives, lawyers, and accounting magicians exploiting them for tax breaks and various financial benefits, but that doesn’t make this whole saga any less preposterously pointless.
Employees and consumers certainly didn’t benefit from this idiotic parade of events that began with AT&T wasting hundreds of billions of dollars to buy companies it was too incompetent to run. And somehow the saga has only gotten dumber since then.