> I'm struggling to come up with a good reason why you would support a merger
If I were a loyal Spirit Airlines customer, I’d have supported their proposed merger. Similarly, when an artist I love gets greenlit by a major studio, it’s news worth celebrating—they’re getting more resources at their disposal.
(To be clear, I think the Paramount merger is a travesty, but mostly due to corruption rather than anything intrinsic to Hollywood needing protecting.)
Agree. I'm also remembering the previous grocery store merger in the western US, where the regulators meddled and, while they did approve the merger, they forced a large number of stores to be sold off, but they were sold to a tiny, inexperienced operation who proceeded to go bankrupt within a year, so rather than an area having two "Albertson's" or whatever, all those areas then had one Albertson's and one vacant store. Anybody with sense could have seen that coming and if they didn't want to lose their convenient grocery store altogether, they might have been arguing to simply allow the full merger.
Why not just block that merger? Well, the "non-greed" case for mergers is often that while it may result in a dominant position in a narrowly-defined market ('supermarkets'), they are sometimes needed to preserve the existence of that category as an alternative to another giant that has expanded into a new market, in that case mainly Walmart and to some extent, Amazon, both of which can afford to subsidize something like Ritz Crackers with the profits from selling tires, lawn furniture, or AWS.
You could also consider the Sprint/T-Mobile merger in those terms: Both were circling the drain and really only competing for the most price-sensitive customers, as everyone knew both had inferior service to the other 2 networks. Either or both could have ultimately been liquidated, to the absolute glee of Verizon and AT&T. While it hurts emotionally to think of there being fewer players in that important and specific market of real MNOs, it's true that the MVNOs do seem to be thriving today and, for people who can do even basic research, you can get way better deals (in terms of value and price) on cell phone service today than you could 10 years ago thanks to them, even with fewer 'real' carriers.
Note: None of this is directly relevant to Paramount, which I don't think existentially needs the merger - from either side.
> The "non-greed" case for mergers is often that while it may result in a dominant position in a narrowly-defined market ('supermarkets'), they are sometimes needed to preserve the existence of that category as an alternative to another giant that has expanded into a new market, in that case mainly Walmart and to some extent, Amazon, both of which can afford to subsidize something like Ritz Crackers with the profits from selling tires, lawn furniture, or AWS.
Ah, but then is the argument that we should allow a merger among smaller players because it prevents a narrowly-defined market from being entirely consumed by larger, broader businesses; or should we argue that the larger, broader businesses that can exert influence over large swaths of the market prevent the existence of a competitive marketplace?
I'm going to be humble that I don't have a perfect "fix" that I'm confident would be a net positive. If anything, the most suspicious business practice being done anywhere in the US currently is the AWS cash cow subsidizing everything else Amazon does, to the ruin of dozens of other markets. I just don't know how I'd even word legislation that would rein that in, in a way that wouldn't be overly subjective (and thus subject to the whims of ultimately, the Supreme Court), not trivially bypassable by structuring ownership creatively, and also not having terrible overregulatory impacts. Like, should "Bob's Corner Store & Cigarettes" be able to sell milk for just $2 a gallon to try to bring people in to buy cigarettes, whose profits more than pay for that loss? Probably? And he should also be able to use the profits from his successful cigarette operation to run a money-losing arcade next door, if he wants.
But at what point does it become distorting the market? I deeply hate regulations which punish behavior "only for sufficiently succesful" players, and I've seen how the existing "special competition rules for monopolists" lead to endless debates of "but I'm not a monopoly!" and it seems really clear that all of the trillion-dollar-market-cap companies are too powerful (they own too many politicians) to ever let themselves be classified as such, no matter what.
Wouldn’t a “simple” fix for the AWS thing just be to force amazon to split aws out into its own company? Google (alphabet) and Facebook (meta) should probably get split up too.
I wouldn't say an artist greenlight is a "merger". Anymore than a startup getting seed funding is a "merger". The scales are completely different, as is the nature of the contract.
But yes, the only real reaosn to support a merger is I have stock in one of the companies ". For obvious reasons; M&A acquisitions almost always spike the share price.
> less places for that artist to shop their film means less of a chance their film gets made
When a small studio gets bought by a bigger one, it typically results in more production from the small studio. That’s good if you like their content. They Donny have to waste time shopping films, they’ve already been allocated a budget.
> When a small studio gets bought by a bigger one, it typically results in more production from the small studio.
Sure, but quality of those movies go down. Best scenario, studio that made N good movies a year, now makes N good movies plus M bad movies, but more likely big studio will capitalize on small studio name to make bad movies.
Nothing requires this and there are plenty of counterfactuals to this claim.
An artist having to sell their work to distributors and producers every time, versus selling their brand once and then getting carte blanche for a while, both of these are methods with benefits and downside and neither has a monopoly on great work.
> big studio will capitalize on small studio name to make bad movies
Eventually, probably. In the meantime the artist could take time otherwise spent fundraising to do what they do best.
>When a small studio gets bought by a bigger one, it typically results in more production from the small studio
No, you get the small studio forced to produce more, when that is not how art is made. Eventually you milk it dry and it sucks for everyone except the people who walked away with more money from owning things.
Bungie being pushed to produce more didn't make more genre defining games. Same for id.
In fact, thanks to the stupidity of Xbox and Sony, we have very clear evidence very recently that allowing big studios to buy and run small artists is a great way to pump out low quality slop that doesn't even do well financially.
Bungie is especially funny because it wasn't out putting more games. With the sunsetting of destiny 2, Sony traded one golden goose for a normal one. I guess that's inevitable when management changes.
Id is an odd example, though. They seemed to be the most reasonably managed Xbox studio in quality and output. Pretty much every other studio (outside of Obsidian) acquired this decade has barely gotten more than 2 games out post acquisition, but Id is (was?) a solid 3-4 year clip of releases with support for each title.
>allowing big studios to buy and run small artists is a great way to pump out low quality slop that doesn't even do well financially.
Scale definitely matters. When it's a very small team getting publishing deals, it's often exciting, because usually it's just a team that really needs money being thrown money and at worst some milestones and feedback. When it's a somewhat sustainable studio of 20+ devs it starts to get shaky when acquisitions come in and you wonder if corporate will ruin that synergy. By 100+ it really should be a proper studio that can support operations and not be too prone to being gobbled up into another wing of megacorp.
If I were a loyal Spirit Airlines customer, I’d have supported their proposed merger. Similarly, when an artist I love gets greenlit by a major studio, it’s news worth celebrating—they’re getting more resources at their disposal.
(To be clear, I think the Paramount merger is a travesty, but mostly due to corruption rather than anything intrinsic to Hollywood needing protecting.)