Last month, Warner Bros. Discovery (WBD) CEO David Zaslav reportedly told a company town hall: ”The deal [with Paramount Skydance] may not close. If it doesn’t close, we get $7 billion, and we get back to work.”
If it could only be that simple. He is understating the consequences.
I previously argued the Ellison family is pursuing WBD because it is the only deal in the marketplace that connects two large libraries of content to cloud infrastructure—”more IP delivers more business opportunities within the cloud.” The long-term business objective of the merger is to control and monetize all possible use cases with owned IP in a world where the “new medium” of generative AI will become the norm.
If the deal does not close, WBD faces a variety of problems around market timing. AI videos from Bytedance’s Seedance and Google’s Veo 3 are growing in popularity across Bytedance-owned TikTok, Google-owned YouTube and other digital media platforms. “Pirated” Hollywood IP and likenesses are showing up in more of these videos.
