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Bryan Sullivan Joins Schwab Network to Answer Key Questions Regarding Paramount Skydance’s Proposed Acquisition of Warner Bros. Discovery
Bryan Sullivan recently joined Schwab Network to discuss the challenges and uncertainties encountering Paramount Skydance’s proposed acquisition of Warner Bros. Discovery as legal battles continue to advance. In the segment entitled “PSKY-WBD Merger ‘Could Be Dragged Out a Year,’’ Bryan examines the central components of this merger and the aspects he feels ultimately define it.
While the merger cleared federal regulators, numerous state attorneys general requested a trial, now slated for mid-2027. With the trial and possibility of appeals, Bryan shares that the merger may not be completed for over a year. He also notes the key differences in the current case compared to the previous study conducted by federal regulators, emphasizing the focus is on “competition, prices for consumers, and content, and its litigation under the Sherman Antitrust Act and the Clayton Antitrust Act.”
Bryan illustrates a key attribute to this case: market definition. Paramount’s definition includes what Bryan describes as “anything that touches entertainment,” and therefore incorporates streaming services, gaming services, and more.
“The state attorneys general are defining the market very narrowly to cable distribution and theatrical distribution, whereas Paramount is defining it as the entire entertainment industry,” he explains to Schwab Network.
Another key aspect of the merger is the difficulty to prove traditional media companies operate in a separate market. Bryan shares there are strong arguments present as the number of studios that produce theatrical releases and own cable networks is small.
“This case is really going to be defined by expert testimony using what’s called the HHI calculations,” he shares. “They’ll figure out what the market share is and then the court is going to have to determine whether they’ll have to use the narrow definition of market or the broader definition of market.”
He continues to delve into the compelling argument that the greater scale is necessary for media companies to compete with tech giants and remain competitive. Bryan adds that companies like Apple and Amazon generate billions of dollars in revenue from non-entertainment products and services.
“Paramount and Warner Bros.’s only revenue source is entertainment content,” he tells Schwab Network. “They are competing on streaming with a company that can put a billion dollars into production and not miss a beat.”
Data findings and analysis will also be very important in evaluating the merger. Bryan points to a case he considers particularly important: Disney’s acquisition of 20th Century Fox. At the time, it was said it would increase content and lower prices for consumers. However, Bryan notes he does not believe this has happened and instead has seen more layoffs.
As the trial approaches, Bryan recommends for individuals to evaluate the respective party’s filed expert reports, which will come out well before trial, and “really analyze the economies of this deal” and “the broader implications on the entertainment industry.”
To conclude the segment, he emphasizes that the midterm election results will be significant.
“If democrats take control during the midterms as predicted, then Congress could also get involved in examining the merger as well,” he highlights. “What we’ve seen happening at CBS News with reporters leaving because of what they have said was ‘pressure to support the administration rather than be critical of it,’ and that goes into the acquisition of Warner Brothers by Paramount, which then CNN would be under the umbrella of Paramount.”