A fervor for mergers

Variety editorial

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.

Want to read more articles like this one? SUBSCRIBE TO VARIETY TODAY.
Post A Comment 0

Leave a Reply

No Comments

Comments are moderated. They may be edited for clarity and reprinting in whole or in part in Variety publications.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More Biz News from Variety