About 100 years ago, the great Calvin Coolidge famously announced that “the business of America is business” (or words to that effect). Of course, nowadays, we’d have to say, “the business of America is business, unless you lose, then you can manipulate the government to get what you want.”
Late last year, Netflix announced its intent to buy Warner Bros. for $83 billion, which would gain them the Hollywood mainstay’s library of intellectual properties ranging from Batman and Harry Potter to CNN and Discovery. When I opined about this here a few months ago, I argued in favor of Netflix because it was a sign that the free-market David upstart had slain Hollywood’s outdated Goliath.
But then in late February Paramount Skydance came along with $110 billion and thereby won the studio’s affections. Because 110 is more than 83, and in business the goal is to get more money. Paramount came through with a better deal – which Warner Bros.’s shareholders have accepted – that’s a sign that the free market had decided in their favor.
However, rather than just accept that they were outmatched, Netflix has changed course – if the sources quoted by Eriq Gardner in Puck are to be believed – hiring lobbyists and public affairs shysters to get the government to block the deal.
Right now there is a “Block the Merger” campaign going on, trying convince the public (and more importantly, government regulators) that this deal is somehow immoral. “The proposed Warner Bros. Discovery–Paramount transaction would combine two of the largest entertainment companies in the world, further concentrating control over content libraries, television networks, streaming platforms, and the pipelines for content development, production, and distribution,” their website reads.
There is a Block the Merger open letter circulating through Hollywood, signed by more than 4,000 actors and others to fight this horrible injustice. The campaign has drafted high-profile stars like Jason Bateman, Joaquin Phoenix, J.J. Abrams, Florence Pugh, Denis Villeneuve, Ben Stiller, Kristen Stewart, and Pedro Pascal.
It used to be that drafting prominent actors could help a campaign, but I don’t think it does anymore. Let’s keep in mind that actors are good-looking liars who make ridiculous amounts of money to read what other people have written. Notwithstanding that if Pedro Pascal puts his name on something, we should take the opposite side of whatever – but how does Ben Still have time to engage in politics but still make us wait another three years for the next season of Severance?
High-stakes public affairs efforts don’t just happen. At this point, after the last 10 years of paid protests and staged photo ops, we’ve all figured out that this kind of political activity is highly organized. The backers of this aggressive campaign include the Democracy Defenders Fund, the Future Film Coalition, and the Committee for the First Amendment – that last one was created to protect communists in Hollywood while communists abroad were slaughtering people by the tens of millions.
As was, this coalition of entitled, out-of-touch mega-millionaires is planning a protest outside CBS during the network’s White House Correspondents’ Dinner party. Apparently, there are also rumors that Netflix is trying to delay the deal so the Ellisons have to pay Warner Bros. shareholders about $650 million per quarter if the closing drags past September 30.
The same Puck article points out that the Democracy Defenders Fund is run by veteran far-left Washington operative Norm Eisen, who of course denies that Netflix is meddling behind closed doors. It continues that Netflix has retained economist Nicholas Hill to lobby regulators about the Paramount–WBD merger.
For Netflix to try to use backdoor, crony capitalist shenanigans to try to manipulate the deal is a dirty strategy that should not be rewarded. If Netflix wants to change Paramount’s mind, maybe the company should just offer more money. The streaming giant’s market cap hovers near $400 billion, so I think they can probably afford to throw some more money Warner Bros.’s way if they’re serious about the deal.
This reminds me of the Cleveland-Cliffs battle over US Steel, where Nippon Steel offered a better deal so CC started playing politics instead of improving their deal. The business of America should be business, not crony capitalism. Netflix achieved its wealth thanks to innovation, creativity, and hard work – if it wants to stay on top, it should keep doing that rather than engaging in political stagecraft like this.