The utterly pointless, decade-long madness that was the Time Warner Discovery series of mergers has come to its pathetic conclusion. Basically announcing that the whole mess was a waste of time, company executives last week quietly announced they’d be untangling much of the partnership and try to pretend the whole thing never happened:
“The theoretical plan, as best as I can understand from the FT report, is to turn Warner Brothers Discovery into one “Goodco” — its (formerly known as HBO) Max streaming business and its Warner Bros. movie studio — and one “shitco” — all of its declining linear TV networks, including CNN, plus most or all of the $40 billion in debt WBD has taken on.
…the biggest takeaway is the seeming admission behind the trial balloon: That the WarnerMedia-Discovery deal — pitched at the time as a way to scale up to fight Netflix and Big Tech companies — hasn’t worked.”
These mergers were supposed to usher forth a wave of amazing synergies and create a new media juggernaut. Instead they resulted in madness and chaos. And the executives in charge of them, like fail upward Time Warner brunchlord David Zaslav, saw accountability in the form of massive compensation packages utterly untethered from any sort of actual competency.
It all began with the AT&T Time Warner and DirecTV mergers, which were a monumental disaster. AT&T spent $200 billion to acquire both thinking it would dominate the video and internet ad space. Instead, the company lost 9 million subscribers in nine years, fired 50,000 employees, closed numerous popular brands (including Mad Magazine), and stumbled around incompetently for several years before giving up.
But that was just the start.
After its tactical retreat, AT&T spun off Time Warner into an entirely new company, Warner Media. Warner Media then immediately turned around and announced a blockbuster merger with Discovery, resulting in the super-creatively named Warner Brothers Discovery.
Things only got worse. Executives there were so cheap they refused to pay residuals to creators, shuttered numerous popular programs they didn’t want to pay for, and engaged in round after round of additional layoffs to achieve promised “synergies” that never arrived. Hundreds of billions of dollars later and the end result is a shittier product and absolute chaos.
The whole mess is a wonderful example of the blistering stupidity of the “growth for growth’s sake” mindset, the perils of mindless consolidation, and our obsession with pointless megadeals that only benefit investors and higher level executives in the form of tax breaks, brief stock bumps, and outsized compensation package.
Everybody else, from artists and employees to consumers, gets screwed in the form of layoffs, higher rates, or lower quality product. It’s not clear how many times we have to repeat the process before we learn anything, in part because there’s no financial incentive for introspection by decision makers.
