Dem
47
GOP
53
Short quiz: Which of these is different from the others: Pravda, Xinhua, CNN and CBS News? Sometimes oligarchs and authoritarians are aligned, but for different reasons. It's complicated. Keep reading for the answer.
David Ellison, the son of the second richest person in the world, Larry Ellison, wanted to be an actor. He failed miserably, so he formed a company called Skydance with Dad's money, and began producing (reasonably) successful movies. Earlier this year he bought Paramount and its vast film library. Owning Paramount made him a serious Hollywood movie mogul.
Separate from Ellison, In 2022, Warner Bros. bought Discovery and its other channels, using a ton of borrowed money. The merged company, Warner Bros. Discovery (WBD), is struggling under a debt load of $35 billion. Management decided to sell the company. Netflix agreed to buy it for $83 billion. While nobody says this out loud, it is obvious that Netflix wants to kill off the movie theater business. If the deal goes through—and this will require government approval (foreshadowing!)—then Netflix will be able to stream all of Paramount's giant film library. Furthermore, Paramount is actively producing many new films. In Netflix' vision, all of those will go directly to streaming, largely putting movie theaters out of business. Netflix wouldn't mind this at all. In fact, it rather likes the idea.
Now here is where it gets complicated. WBD also owns CNN. CNN is a microscopic speck of the company and is losing money. From a financial standpoint it is lost in the weeds. Now Ellison fils has made a hostile bid for WBD. With the financial help of Jared Kushner and a bunch of Arab sheikhs, Ellison is offering $30/share for a total of $108 billion in cash. He doesn't give a hoot about CNN, but wants all of Warner's old and new movies. This would make him King of Hollywood. In the end, the WBD stockholders will get to decide which bid to accept. It is rare for stockholders to oppose management's position, and management wants to sell the company to Netfix. It sees streaming as the future and wants to be part of it. Here is the WBD stock price since 2021:
For Ellison fils, this is just a business deal. But now, consider Donald Trump's view. He doesn't care much about the movie business and Netfix is kind of neutral to him, but he cares enormously about CNN. Ellison père is a huge Trump supporter. Trump understands that he can tell Ellison père that he supports Skydance-Paramount's purchase of WBD and would make sure it is approved quickly, provided that Ellison fils then fires all the CNN anchors Trump dislikes and replaces them with Trump-friendly ones. Ellison père has already lobbied Trump and discussed firing the CNN anchors to grease the skids for the deal. Erin Burnett and Brianna Keilar will be the first to go, followed by more later. Although Ellison père doesn't have a management role in Paramount, he owns quite a bit of its stock and he knows the CEO (Ellison fils) quite well. Then CNN would become a state-run media company, like Pravda, Xinhua, and CBS News (the latter now run by Trump-friendly Bari Weiss). So the answer to the quiz above is that at the moment, CNN is not a state-run media company, but it could soon be if Paramount buys WBD.
Netflix has no particular interest in owning CNN or any of WBDs other television stations and would probably sell them to the highest bidder.
So here we see the alignment of the oligarchs and the authoritarians. The Ellison oligarchs want Paramount for business reasons. They don't care at all about CNN. Trump wants CNN to be owned by his cronies. He doesn't care at all who owns the movies. It is a perfect fit. Vladimir Putin is probably thinking: "Trump is a better businessman than I thought. Even I couldn't have engineered a better deal."
In the PR war for the stockholders' votes, the Ellisons will say that want to keep movie theaters alive as a going business so you can go to the movies with your family and friends. They will claim (possibly correctly) that if Netflix buys WBD, movie theaters are doomed but if Paramount buys it, there will be lots of new (and old) movies at a theater near you. On the other hand, Netflix will say: "Don't you want to watch Warner Bros.' great movies from the comfort of your living room, which is much cheaper and more convenient than going to a theater full of rude, noisy, germ-ridden people?"
If Paramount wins and turns CNN into Fox Lite, many viewers will decamp for greener pastures elsewhere. Then advertisers will leave, leaving less money for reporting, which will cause more viewers to leave. The end game could be Paramount simply closing down CNN. Trump might well be happy with that outcome.
To make things more fun, Comcast is also interested in buying WBD. It owns NBC News and just got rid of MSNBC, thus starving MSNBC of NBC News' newsgathering resources. This could also be worth something to Trump, but most likely he would prefer the Ellisons. If Comcast launches a bid, it will be a longshot and do to so, it would have to outbid the Ellisons. Comcast's capitalized value is $100 billion, so it would have to bid more than the entire company is worth. Comcast's executives understand that the cable TV business is dying, so they want to get into the business of owning content.
So here are the stakes. If Netflix wins, movie theaters die but democracy lives. If Paramount wins, state-run media happens and democracy dies but movie theaters live. If you own any WBD stock, you get a say in this.
And there is even more. Ellison already owns CBS and is a likely buyer or partner in buying TikTok. Elon Musk bought eX-Twitter. The oligarchs are taking over the traditional media and are hard at work buying social media. They know that having the media fawn over the president and avoid criticizing him is the path to financial success. A free press? What a quaint idea. (V)