Media Monday: Bonta’s Backtrack & The New Sports Doc Playbook

Jon Kelly (0:01)

It was interesting, I just didn't think he understood the industry as well. Anyway, I'll leave it at that.

This was a really, really poorly handled negotiation.

Peter Hamby (0:14)

Welcome to The Powers That Be Daily, Puck's podcast focused on the intersection of Wall Street, Washington, Silicon Valley and Hollywood, and the players who run it all. I'm Peter Hamby. It's Monday, September 28th, which means it's Media Monday. Today, John Kelly and I break down why the legal challenge to the Warner Brothers Paramount merger was doomed from the start. We ask whether the two movie studios will actually remain separate or one day be combined into one. We also look at a new production company built around slightly less famous athletes, the tier below LeBron James, Serena Williams and Josh Allen, and whether sports fans actually want more produced content around their favorite stars.

We'll discuss all that and much more on today's episode of The Powers That Be.

Happy Monday everybody and welcome to The Powers That Be. If it's Monday, it's Media Monday and I'm joined by the boss man, Jon Kelly. I have not talked to Jon at a high level yet about the Warner Paramount, Para Warner Bros merger.

Now that it's been settled by California's Attorney General, Rob Bonta, who is getting just shellacked over this last week. I mean, I always, I called it on this podcast. He was always going to find an off ramp. There was not a win for him that was good. Some short-term thinking. California politicians generally, man. I mean, I know everyone talks about Gavin and Kamala, but this is a uniparty state. People get in office. They aren't really tested that much, Jon. They have a primary challenger who can't beat them because it's too expensive. You get this sort of like ossified system where you have a bunch of Democrats in office at all levels. It turns out a lot of them are just kind of meh. Anyway, we'll get into that. Also, a really interesting piece from John Orrind that I'm interested in because this relates to politics world, but there's a new company out there that's trying to roll up mid-tier athletes who are famous and create production around them. Because everyone's got some audience to monetize, and there's one figure out there who's trying to do this. It's a very interesting story about media and direct to consumer audiences and influencers, creators, et cetera. But first, John, welcome to Media Monday. I guess this story got settled last Monday after we taped. So just at a very high level, your thoughts on the Paramount-Warner Brothers merger? I mean, was this always going to happen in your mind, this denouement where we're at right now?

Jon Kelly (3:05)

I've talked about this once before in this show, Peter, and I'm trying to not betray conferences because I've met Rob Bonta once. I met him in late March at a very upscale dinner party in San Francisco with a lot of major democratic figures there. Hillary Clinton was there, Nancy Pelosi was there, told things off the record, so I don't want to get into it. But I will say, this deal came up, we talked about it for a couple minutes, I thought the guy was really nice, obviously very smart, unbelievable hair, which I know is sometimes that can give people confidence, right? That's sort of the Gavin Newsom curse, right? When you have hair like that, there's nothing you think you can't do in the world.

I actually, I can tell you what I said to him, which was that this objection never made sense because these companies had such an uphill battle against the platforms in YouTube and Netflix in particular, that even if there were going to be some unfortunate consequences in the near term, that the long-term value creation was in the best interest of the industry, which is I think I've said this consistently on the show. The way he talked about it, it was interesting. I didn't think he understood the industry as well. Anyway, I'll leave it at that.

This was a really, really poorly handled negotiation. If you want to absolutely extract various accommodations from the other side, then there are a number of other ways he could have done this. I think Paramount would have conceded all these things many, many months ago and he came away looking foolish. The film Guarantee with minor consequences, I think it's like 30 million bucks for every film that they miss on the slate and and Warners and Paramount are both going to clear up.

Peter Hamby (4:48)

The terms are all behavioral. None of them are structural. None of them really address the antitrust concerns that drove the lawsuit in the first place.