THE FIRST THING THAT BECAME apparent last week after the Battle for Paramount had broken out was that everyone had grown a bit rusty. In the ’80s, takeovers were New York’s favorite indoor sport, but last week, the two top men at Viacom — Sumner Redstone and Frank Biondi — seemed to be giving out contradictory statements. It was even unclear to reporters which PR spokesman was speaking for which side. By week’s end, the Paramount Battle began to resemble a cast party for “Barbarians at the Gate,” with everyone struggling to remember their lines.
If the roles seemed unfamiliar, there was good reason. Here was Martin Davis, the man who almost blew apart the Time Warner deal, falling victim to a similar maneuver engineered by Barry Diller. Here was Sumner Redstone, the frugal New Englander who often travels by taxi between appointments when visiting Los Angeles, thrust into exactly the sort of high-stakes bidding war he had always abjured.
Finally, here was John Malone, ever the cool poker player, finding himself embroiled in a “conspiracy to monopolize” lawsuit at a moment of maximum vulnerability. Surely it’s a sign that things are getting out of control when a supplier of programs sues his major customer. Another sign: when Barry Diller put out statements that he really kind of likes Martin Davis after all.
IF THE BATTLE FOR PARAMOUNT seems surreal at this juncture, it nonetheless is serious business. In a broadcast universe where fin-syn has become instantly extinct and where cablers are on the defensive, the battle will surely send off seismic shocks; even insofar as movies are concerned, it could very well constitute a defining moment. As a result of a Paramount merger with either partner, Hollywood, once clubby and sacrosanct, will surely become the plaything of the telcos, MSOs and other high-tech denizens of the brave new world of “interconnectivity,” to borrow Barry Diller’s pet phrase. Given the escalating valuations of “software,” blind dates between movie studios and the Ameritechs, Comsats and AT&Ts of the world seem suddenly inevitable.
One could defend this process in the same way as the Sony and Matsushita acquisitions were defended — Hollywood will discover new sources of capital and new opportunities will unfold. But there’s also the other side of the coin: At what point does a movie become a filmic widget, a mere electronic speck on a baffling, 500-channel interactive landscape?
MICHAEL EISNER and Jeffrey Katzenberg would argue that filmic widgets won’t make it in the ’90s, that the business of producing “software” is complex enough without taking in phone companies as partners. Disney itself has had its recent ups and downs as it experiments with new ways of stepping up its own productivity. Some Wall Streeters still insist that, with the end of fin-syn, Disney will merge with a network in the next year or so.
Nonetheless, compared to the confusion that reigns on the Paramount battlefield, the clarity of Disney’s corporate vision seems seductive. Disney asserts it knows where it’s going. No one involved in the Battle for Paramount seems to have a clue.