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Hey fam - I know the Paramount/Netflix/Warner Bros/Trump story looks like boring inside baseball. But it’s not. It’s about the bigger realignment happening in American business, and media, and politics.
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—JVL
Trump and the Oligarchs Are Killing Corporate Media
The oligarchs only care about money. The dictator only cares about power. They can make that arrangement work.
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1. This Is CNN
Our oligarchs and our strongman operate on two different incentive structures that happen to be in total alignment.
Remember when David Ellison bought Paramount Global? Why did he want to own that corporation? Because it gave him a bunch of valuable assets:
A viable streaming platform in Paramount+
A vast library of intellectual property—including famous franchises like Mission: Impossible, Top Gun, Star Trek, Teenage Mutant Ninja Turtles, and Paranormal Activity—which can be monetized for decades
A broadcast television network with a vast advertising business and live TV assets, such as rights to NFL broadcasts
A movie studio that generates new intellectual property and vertically integrates with the rest of the pipeline
Did David Ellison give a shit about the CBS News division? No. If you listed the top thirty pieces of the Paramount Global business, CBS News would not be in it. Qua business, it was an afterthought.
But why did Donald Trump direct his government to approve Ellison’s purchase? Trump did not give a shit about Paramount+, the Paramount film catalogue, or any of that stuff. The only thing Trump cared about was that CBS News be put under the thumb of a reliable owner who was beholden to him.
Trump and Ellison had entirely different interests—yet they were completely aligned.
And now it’s happening again.
You have probably seen the story about Ellison attempting a hostile takeover of Warner Bros.-Discovery. Why does Ellison want to own this business, too?
By merging HBO Max with Paramount+ he could have a true third competitor to the Netflix/Disney goliaths, and so would own the last seat at the streaming table.
The Warner Bros. film library is even more valuable than the Paramount library and by combining the two his streaming service would have a major point of differentiation from Netflix and Disney+.
The addition of Warner-owned cable networks would give the ad business he now owns (via CBS) more inventory and more leverage over advertisers.
Every act of consolidation in the entertainment sector advantages the surviving players by eliminating competition, giving them more power to control costs and dictate terms.
One of the pieces of Warner-Discovery is CNN. Like CBS News, CNN is a tiny piece of the overall business. It is also a declining piece. CNN is the last-place cable news network and its revenue is (a) modest and (b) in free fall.
I want to be very clear about this: CNN is a small player in a dying category. In a world where David Ellison only cared about economics, I suspect he’d pay good money not to own CNN.
Yet if Ellison is to succeed in his takeover of Warner-Discovery, he will need President Trump’s help. And the only thing Trump cares about in this deal is getting CNN under Ellison’s control. Don’t take my word for it. Here’s the president yesterday:
“I think CNN should be sold, because I think the people that are running CNN right now are either corrupt or incompetent,” Trump told reporters during a roundtable with business executives at the White House.
“I don’t think they should be entrusted with running CNN any longer. So I think any deal should — it should be guaranteed and certain that CNN is part of it or sold separately,” he added. “I think CNN should be sold along with everything else.”
That’s how oligarchs and autocrats work. The oligarchs want political power to advantage their businesses. The autocrat wants key businesses to be controlled by allies in service of strengthening his regime.
These arrangements work out nicely for everyone until the oligarch accidentally falls out of a window.