Why Warner Bros.-Paramount Sale ‘symbolizes big changes’ for Hollywood

On today’s episode of the “Daily Variety” podcast, Erik Gordon, a professor at the University of Michigan’s Ross School of Business, explains the Warner Bros. sales saga. Discovery as the company’s shareholders prepare to vote on its sale to Paramount Skydance.

Gordon, who studies mergers and acquisitions and Warner Bros. Discovery used as a case study in one of its classes, says the process was “unusual” for both WBD and Paramount Skydance. WBD shareholders will have the opportunity to vote on whether or not to support the deal on April 23. The company has come a long way since sales rumors picked up steam last summer. WBD initially tried to hold off his aggressive lover, which was one of the many unconventional aspects of the transaction.

“It’s unusual for the target to simply say, ‘We’re not going to talk to you, or take you for a walk. We don’t want to listen.’ It’s a bit like they’re putting their hands over their ears and saying, nah, nah, nah, nah, nah, nah. That’s quite unusual,” says Gordon. “Eventually it got to the point where some legal duties took over. It’s also unusual for the pursuer, the acquiring Paramount Skydance, to be so persistent. I mean, you have to give credit to David Ellison. He’s the guy who gets rejected by a girl 23 times. And he asks the 24th time and she says, ‘Okay, I’ll go out with you.’ ”

The wrangling over WBD and the tug-of-war between Netflix and Paramount Skydance over the deal reflect so many contradictions roiling the traditional entertainment industry. But fundamentally a company is endowed with sui generis assets such as Warner Bros. and HBO offer a rare opportunity to grab significant showbiz real estate.

“This deal, while it won’t bring any major changes to the industry, will likely come to symbolize all of those major changes,” Gordon says.

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