At the end of last year, Hollywood was expecting the then-looming Paramount deal to kick off a spate of new M&A activity, especially as the now-consolidated Warner Bros Discovery would be able to re-enter the arena on these matters. After a tumultuous merger bid, Paramount is only just managing to limp to the M&A finish line, and we have seen little other movement on the matter. Warner Bros Discovery CEO David Zaslav remains buoyant on the issue, however. Is he right to see escalating merger activity in the Hollywood landscape? Brandon Blake, our entertainment lawyer from Blake & Wang P.A., examines where we currently stand.

Brandon Blake

Deals to “Pick Up Sharply”

As we mentioned, David Zaslav himself recently stated at the annual Allen & Co. conference that he expects both traditional M&A activity and streaming-focused mergers to pick up sharply towards the end of the year and over the next 24 months. He expanded on these thoughts to include joint streaming ventures in the scope.

Warner Bros. Discovery is in the process of launching two new bundled expansions—the upcoming Disney+, Max, and Hulu bundle and Venu, a joint venture for sports streaming with Disney and Fox. So, it is natural that the company would have a positive outlook on these sorts of ventures.

A Rocky Start

Let’s not pretend, however, that the M&A action in 2024 has gone smoothly so far. Paramount, which was expected to cinch a simple deal far earlier in the year, has only just managed to find a merger, and getting there was a difficult and complex process. While the looming Skydance and Paramount merger is expected to pass through all regulatory processes to close next year, we have also seen increasing pushback on big deals like this from federal watchdogs.

Naturally, this doesn’t make for a market where potential sellers or buyers are anxious even to try. Zaslav is a proponent of deregulation for this reason, but it is also easy to see why not everyone agrees with him. The concerns around such “mega deals,” particularly concerning competitiveness and fair trade, are accelerating across all industries. Additionally, there is a growing emphasis on Environmental, Social, and Governance (ESG) considerations in M&A transactions, which will be crucial in evaluating potential deals.

However, streaming, in particular, has “gone global.” This could favor cross-border M&A activity, especially in the entertainment industry, where collaboration with international partners can be the easiest way for US-based streaming platforms to navigate the often complex regulatory and cultural landscapes​ in other countries. We’ve already seen several partnerships arise for these reasons, and anticipating some full-on merger activity in that space wouldn’t be reaching too far.

Despite Zaslav’s buoyancy around the issue, the fact remains that mergers and acquisitions are a complex and difficult environment, especially with regulatory hurdles considered. While he is likely correct in that there is a lot of scope for these sorts of deals, especially as the streaming landscape begins to mature, the jury is still out on whether we will see his anticipated rush to the bargaining table any time soon, especially after the difficulties Paramount itself has had in securing itself a buyer and a deal.