4 ms·

The thing is it is less of an antitrust concern for two also-rans in an industry to merge than it is for the industry leader to buy a struggling competitor. Peo

by ls612 8mo ago

The thing is it is less of an antitrust concern for two also-rans in an industry to merge than it is for the industry leader to buy a struggling competitor. People don’t like the politics of Paramount’s ownership but from a competition perspective this is the better outcome.

afavour 8mo ago
We’re talking about multiple industries here. In streaming Netflix is dominant. In terms of movie production studio Netflix is the also-ran compared to Warner and Paramount. A purchase by Netflix would give them something they currently do not have. A purchase by Paramount is a much more direct merge of two competitors.
- lotsofpulp 8mo ago
  If the industry is defined as one that makes entertainment, then no one is dominant. Oracle and bytedance (tiktok), Meta (instagram), Alphabet (youtube), Reddit, Video Games, and even the sports leagues are huge competitors for screen time. Even restricting the industry to professionally made videos, there is Apple, Amazon, Comcast, Disney, Netflix, Sony, and Paramount. Ignoring the small ones like A24 and Lionsgate. Having or not having Warner Bros be a separate entity seems inconsequential, considering the weight of the others.
  - dangus 8mo ago
    Maybe this is too much of a side topic or tangent, but I think that mergers shouldn’t be legal by default once a company is a certain size, regardless of the level of competition. I understand that there is a lot of competition and that a merger at this stage probably won’t harm competition significantly. But that shaky justification can be used until suddenly there isn’t sufficient competition. This reminds me of a recent Wendover Productions video talking about antitrust waivers for airline alliances flying transatlantic flights. In recent waiver applications, the ability to compete with other airline alliance conglomerates that have received antitrust exceptions is the justifying reason for requesting an antitrust exception, and that keeps happening until the industry becomes wildly consolidated. I think our antitrust system should say, while you have a lot of competitors, and under that criteria you would be allowed to merge, but your company revenue/market cap/employee count/majority owner wealth is too high to be eligible to merge. You’re sufficiently large and prosperous, there is no need to grow your company larger through M&A. If you don’t like the business environment you are in, change your operations. You have the money to pursue your goals.
    - lotsofpulp 8mo ago
      >but your company revenue/market cap/employee count/majority owner wealth is too high to be eligible to merge Can you posit numbers for these 4 figures (although I don't know how you could calculate "majority owner wealth" when the majority owner is usually 401Ks and pension funds)? Also, if the goal is to stop a business from getting "bigger", then shouldn't there be a strict cap on the measures, rather than just preventing mergers? If 1M employees is too many, then the business simply should not be allowed to hire more. If $x market cap is too high, then the business should be forced to issue dividends. If the revenue is too high, then it should be forced to stop selling whatever it is selling once it reaches that revenue.
      - dangus 8mo ago
        I didn’t intend to flesh out these details thoroughly, but present the idea in spirit, so I wouldn’t be surprised if it needs tweaking as you mention.
LunaSea 8mo ago
Paramount is the struggling competitor in this equation.
roughly 8mo ago
> People don’t like the politics of Paramount’s ownership but from a competition perspective this is the better outcome. This was a much more compelling argument 14-odd months ago. People don’t like the politics of Paramount’s ownership because they’re aligned with the authoritarians currently trying to take control of the country - this isn’t a dispute over tax policy.
- ls612 8mo ago
  Yes, it’s a dispute about antitrust policy not tax policy. The criteria for that analysis is consumer surplus, not the political beliefs of the owners.
  - roughly 8mo ago
    It’s not a dispute about antitrust policy either, or at least not directly. Paramount has been aggressively reshaping its content to please the current administration for purposes of buying political favor. There’s an antitrust component to that, in that the more properties they acquire, the fewer voices aren’t effectively controlled by the regime, but the opposition to Paramount’s purchasing spree is political and should be properly seen as such.
    - ls612 8mo ago
      Well political differences is not a valid reason to block a merger in the US (see TWC and AT&T’s merger in his first term for an example of that strategy failing).
      - roughly 8mo ago
        That was part of Paramount’s offer/threat to WBD, though - “the administration likes us.” I agree with you that it’s unlikely to block the merger, but I think saying this is a win for the consumer is ignoring a whole lot of context.

by ls612 8mo ago

afavour 8mo ago

We’re talking about multiple industries here. In streaming Netflix is dominant. In terms of movie production studio Netflix is the also-ran compared to Warner and Paramount. A purchase by Netflix would give them something they currently do not have. A purchase by Paramount is a much more direct merge of two competitors.

lotsofpulp 8mo ago
If the industry is defined as one that makes entertainment, then no one is dominant. Oracle and bytedance (tiktok), Meta (instagram), Alphabet (youtube), Reddit, Video Games, and even the sports leagues are huge competitors for screen time. Even restricting the industry to professionally made videos, there is Apple, Amazon, Comcast, Disney, Netflix, Sony, and Paramount. Ignoring the small ones like A24 and Lionsgate. Having or not having Warner Bros be a separate entity seems inconsequential, considering the weight of the others.
- dangus 8mo ago
  Maybe this is too much of a side topic or tangent, but I think that mergers shouldn’t be legal by default once a company is a certain size, regardless of the level of competition. I understand that there is a lot of competition and that a merger at this stage probably won’t harm competition significantly. But that shaky justification can be used until suddenly there isn’t sufficient competition. This reminds me of a recent Wendover Productions video talking about antitrust waivers for airline alliances flying transatlantic flights. In recent waiver applications, the ability to compete with other airline alliance conglomerates that have received antitrust exceptions is the justifying reason for requesting an antitrust exception, and that keeps happening until the industry becomes wildly consolidated. I think our antitrust system should say, while you have a lot of competitors, and under that criteria you would be allowed to merge, but your company revenue/market cap/employee count/majority owner wealth is too high to be eligible to merge. You’re sufficiently large and prosperous, there is no need to grow your company larger through M&A. If you don’t like the business environment you are in, change your operations. You have the money to pursue your goals.
  - lotsofpulp 8mo ago
    >but your company revenue/market cap/employee count/majority owner wealth is too high to be eligible to merge Can you posit numbers for these 4 figures (although I don't know how you could calculate "majority owner wealth" when the majority owner is usually 401Ks and pension funds)? Also, if the goal is to stop a business from getting "bigger", then shouldn't there be a strict cap on the measures, rather than just preventing mergers? If 1M employees is too many, then the business simply should not be allowed to hire more. If $x market cap is too high, then the business should be forced to issue dividends. If the revenue is too high, then it should be forced to stop selling whatever it is selling once it reaches that revenue.
    - dangus 8mo ago
      I didn’t intend to flesh out these details thoroughly, but present the idea in spirit, so I wouldn’t be surprised if it needs tweaking as you mention.

LunaSea 8mo ago

Paramount is the struggling competitor in this equation.

roughly 8mo ago

> People don’t like the politics of Paramount’s ownership but from a competition perspective this is the better outcome. This was a much more compelling argument 14-odd months ago. People don’t like the politics of Paramount’s ownership because they’re aligned with the authoritarians currently trying to take control of the country - this isn’t a dispute over tax policy.

ls612 8mo ago
Yes, it’s a dispute about antitrust policy not tax policy. The criteria for that analysis is consumer surplus, not the political beliefs of the owners.
- roughly 8mo ago
  It’s not a dispute about antitrust policy either, or at least not directly. Paramount has been aggressively reshaping its content to please the current administration for purposes of buying political favor. There’s an antitrust component to that, in that the more properties they acquire, the fewer voices aren’t effectively controlled by the regime, but the opposition to Paramount’s purchasing spree is political and should be properly seen as such.
  - ls612 8mo ago
    Well political differences is not a valid reason to block a merger in the US (see TWC and AT&T’s merger in his first term for an example of that strategy failing).
    - roughly 8mo ago
      That was part of Paramount’s offer/threat to WBD, though - “the administration likes us.” I agree with you that it’s unlikely to block the merger, but I think saying this is a win for the consumer is ignoring a whole lot of context.