In less than two weeks, NBC is expected to close its deal for Universal. Sony and Warner Bros. are kicking the tires of MGM. Comcast is still pondering a hostile takeover of Disney.
Such mergers have met with the tacit approval of Wall Street bankers, who benefit richly from them, and the financial press, which covets the news. They all echo that the assets of the companies involved are compatible; the dividends to stockholders are clear.
But in Hollywood, their ramifications are painfully obvious: widespread layoffs, fewer buyers, lost opportunities.
It’s clear that the NBC and Universal merger will result in hundreds of layoffs on the TV side alone. There have been thousands of jobs lost at Sony Music, BMG and Warner Music in the last several months. Showbiz jobs in Hollywood declined by 5,500 to 111,500 in the third quarter last year, according to a recent UCLA study.
Wall Street may applaud all this in the name of synergistic cost-savings, but rising unemployment isn’t good for a business based on creativity. It makes managers insecure and leads to play-it-safe movies, music and television.
And when entertainment becomes risk-averse, it’s the general public that gets shortchanged.