Sony Pictures CEO Predicts Industry ‘Chaos’ Over the Next 2 Years: ‘Mergers and Bankruptcies and Sales’
If you think the Paramount-Skydance drama was a bit much, you’re going to hate the next couple of years, Sony Pictures Entertainment CEO Tony Vinciquerra warned on Thursday.
At the annual Bank of America Media, Communications & Entertainment Conference, Vinciquerra said Hollywood is in for “chaos” over the next two years. He predicted the industry is in for a wave of “mergers and bankruptcies and sales and all kinds of fun things,” and that only the biggest companies will survive. Unless, that is, those giants “make some massive mistake or miscalculation” along the way.
Vinciquerra is certainly not the first media executive to predict more consolidation in Hollywood, but he may be the one using the most-damning language.
“The business […] will be in a period of chaos for the next 18 to 24 months,” Vinciquerra said. “Just look at all the companies with cable networks that have this albatross of cable networks around their necks that they have to figure out what to do with.”
Easy for him to say: SPE doesn’t have much in terms of cable-channel ownership. It does, however, provide an enormous amount of content to other companies’ broadcast and cable channels (and yes, streaming). That positioning is where Vinciquerra is, wants to be, and will stay.
His peers at Warner Bros. Discovery and Paramount Global, meanwhile, can feel the albatross’s talons tightening. Both companies just devalued their respective cable businesses by billions of dollars, have stocks that are in the toilet, and are ripe for the picking.
Paramount has had several suitors — including, at one point, Sony.
“We didn’t really get much traction with the process,” Vinciquerra said of Sony kicking Paramount’s tires. “Our goal was to get IP. That was really where we wanted to be. We would have had to do a lot to get to that point in terms of taking the other parts of the company and finding new homes for them.”
Paramount Global’s controlling shareholder Shari Redstone was not interested in seeing that happen. So Sony went away, and Skydance’s David Ellison stayed the course. He’ll buy Redstone’s National Amusements, Inc., which is primarily a holding company, and eventually merge Paramount and Skydance.
Sounds like Sony and Paramount have a plan; WBD’s future is very, very TBD. Its present includes nearly $40 billion in debt from the April 2022 merger that brought together AT&T’s WarnerMedia and Discovery, Inc. Good luck finding a bigger fish willing to take on that debt load — or on getting approval for another acquisition that would add more debt.
Warner Bros. Discovery may not be the vision of a perfect company, but David Zaslav did have a method to his madness. Zaslav brought Warner Bros. aboard to scale up (and save) Discovery, the home to the biggest cable bundle in town. In the streaming era, which is to say the cord-cutting era, that claim is not a brag — it’s a major problem.
Nobody wants to pay for cable when all the good content goes to streaming, and the channel owners and cable providers are well aware of it. For evidence, look no further than the ongoing carriage-fee standoff between Disney and DirecTV. Or look at Disney-Charter from this same time last year, which brought streaming service Disney+ to Spectrum customers. That’s pretty much what DirecTV is after.
Without a broadcast network and such a heavy cable presence, WBD (or at least the “D”) is more like AMC Networks than it is Paramount Global or Disney. Just this week the writing on the wall told AMC to voluntarily serve up its core streaming service, AMC+, to all of Charter’s Spectrum TV customers — for free.
It was the right play and possibly the only play. Vinciquerra thinks we’ll see “a lot more” carriage battles in the years to come.
You may also like
