The Fall of Golden-Age Hollywood Studios
By 2018, nearly every studio from the golden era of Hollywood had been overrun by outside influences. For decades, Metro-Goldwyn-Mayer had been thrown around by unscrupulous owners, never completely recovering. Columbia Pictures was sold in 1982 to Coca-Cola and later to Sony in 1989. Universal had survived five hostile takeover attempts during a 21-year period. Sumner Redstone, a struggling company, had stripped mined Paramount Pictures for cash.
Warner Bros. was the sole bastion of Hollywood, a beige-walled stronghold of filmmakers led by officials with entrenched Hollywood expertise.
AT&T Revives Warner Bros.’s Hopes of Dominating Entertainment Once Again
AT&T acquired Warner Bros. in June 2018 as part of a move to “bring a fresh perspective to how the media and entertainment firm operates”, as AT&T’s then-CEO Randall L. Stephenson phrased it at the time. AT&T chopped and burned its way through Warner Bros.’s ranks, installing CEOs with little or no Hollywood expertise in a bid to create a service like that of Netflix. They reduced expenses, stunning stars with unexpected distribution choices, and forced Warner to behave more like a technology firm than an entertainment one: This is the future!
Warner Bros. was divested by AT&T to Discovery Inc. as part of a $43 billion deal.
The 99-year-old film studio, which produced Harry Potter, Batman, and Bugs Bunny, will now refocus on its historic sweet spot as an entertainment corporation, or so Hollywood’s newest tycoon has pledged. David Zaslav, Discovery’s chief executive, will lead the new firm, which will be branded Warner Bros. Discovery, with no little degree of significance.
Message from David Zaslav
According to Mr. Zaslav, the CEO of Discovery, success is about artistic skill, both in front of the screen and behind the screen, and about struggling and struggling to establish a culture that supports that artistic imaginative and psychic. For the better part of the last year, he has waxed lyrical about the studio’s illustrious heritage, regularly paying honor to Jack, Harry, Sam, and Albert Warner, the brothers who started it all.
Mr. Zaslav expressed his desire to “dream big and dream daringly” in an e-mail to his new team. “Hallelujah,” a Warner Bros. supervisor wrote in a subsequent text message. Another studio executive, speaking on the phone, stated she was on a crazy spending spree for a good time, adding that Hollywood is once again a baby.
The Takeover has also been Met by Criticism
Others, on the other hand, were less enthusiastic. Mr. Zaslav is a leisure expert, having spent 15 years running Discovery, a cable television juggernaut, and before working at NBCUniversal. He does, however, lack film knowledge. Additionally, the acquisition carries a staggering amount of debt — almost $55 billion — that must be paid down as content prices climb. Mr. Zaslav may need to make some difficult decisions about asset allocation. How much money should be invested in film production and promotion? To what extent should a studio produce pictures for a one-time theatrical release? Should the primary objective be expanded to include film distribution for HBO Max, the company’s streaming service?
Hollywood as a whole is in the same frame of mind, exuberant one minute and gloomy the next. There is an indication that the theater industry is finally recovering from the coronavirus pandemic. The PG-rated “Sonic the Hedgehog 2” grossed a massive $71 million in North America over the weekend, the highest opening total for a film made by Paramount since 2014