The biggest media merger since the disastrous US$165 billion AOL-Time Warner deal in 2000 just cleared its first major hurdle, but the corporate drama is only accelerating.
Warner Bros. Discovery shareholders overwhelmingly approved Paramount Skydance’s AU$156 billion (US$111 billion) takeover bid during a special virtual meeting on Thursday.
According to reports, investors happily took the cash but delivered a spectacular rebuke to outgoing leadership. Shareholders explicitly voted against a monumental exit pay package for Warner Bros. Discovery CEO David Zaslav. The proposed “golden parachute” would have handed Zaslav more than AU$700 million (US$500 million) in equity awards and tax reimbursements.
However, the vote is entirely advisory, meaning the board of directors can legally ignore the shareholders and cut Zaslav his massive check anyway.
The Hollywood resistance quadruples
Wall Street might love the merger, but the creative community is officially going to war. Just weeks ago, a coalition of 1,000 actors and directors published an open letter opposing the consolidation. That petition on BlockTheMerger.com has now swelled to more than 4,000 signatures.
Hollywood heavyweights Robert De Niro, Sofia Coppola, and Holly Hunter recently added their names to the rapidly growing list of dissenters. The coalition argues the merger will inevitably slash jobs, crush mid-budget filmmaking, and reduce the American studio system to an oligopoly of four major players.
The resistance movement is taking the fight from the internet directly to the streets.
Organizers staged a massive rally outside Warner Bros. Discovery headquarters in Manhattan ahead of the shareholder vote. They also coordinated protests in Washington, D.C., directly outside a private dinner hosted by Paramount Skydance CEO David Ellison.
Robert De Niro, Sofia Coppola, and Holly Hunter recently added their names to the rapidly growing list of dissenters. Image: Variety
Washington holds the final keys
Ellison secured the shareholder vote and finally locked out rival bidder Netflix. He recently promised theater owners that the combined superpower will release at least 30 films a year.
However, his AU$156 billion victory lap remains premature.
The ultimate fate of the Paramount and Warner Bros. mega-merger now rests entirely with regulatory authorities. The United States Department of Justice and the Federal Communications Commission have both launched rigorous reviews.
Regulators are demanding information on how the consolidation will impact streaming competition, movie theaters, and content rights.
Paramount expects the deal to close in the third quarter of this year. If regulators drag the process past September 30, Paramount must pay shareholders a quarterly “ticking fee.”
If antitrust regulators block the deal completely, Ellison faces a crippling AU$9.8 billion (US$7 billion) termination penalty.
Ellison finally convinced Wall Street to sell him the studio. Now he just has to survive 4,000 angry actors and the federal government.
Feature image- AI generated.