Hollywood’s Ugly Bidding War

The battle for Warner Bros. features too much talk of Donald Trump favoritism.

It’s the not caring that’s really striking.

Representational image.

The not caring of the public or even the traditional news media over the fate of Warner Bros. Discovery, owner of the most hallowed movie studio in Hollywood, owner of HBO, the crown jewel of peak TV a few short years ago.

Too, the caring of the Washington political class seems limited to a residual demand among its senior citizenry to shriek “media monopoly” whenever a media deal is proposed. Among Los Angeles creatives there’s a definite caring, though only about their own career prospects. James Cameron, auteur of “Avatar,” says a Netflix win would be a “disaster.” Mr. Cameron’s movies are uniquely designed for the IMAX experience, not for Netflix-style home streaming.

But here’s what might warrant some larger caring. To the phlegmatics of Wall Street the subject has hardly been the business merits of the potential bids, it’s been the politics of currying favor with Donald Trump.

On Monday, second-round bids were reportedly received from three suitors, Netflix, Comcast and Paramount Skydance, which kicked off the auction with an earlier offer to buy the media entertainment giant.

Nearly all the discussion has focused on whether any bidder not named Paramount can find a way to cozy up to Mr. Trump to offset Paramount’s presumed “in” with the president.

To start with, many believe Netflix and Comcast are bidding simply to drive up the price and prevent Paramount from getting rich Warner pickings like “Game of Thrones” and “Harry Potter” for a knockdown price aided by Trump favoritism. Paramount’s pitch to the Warner board has been unsubtle: guaranteed smooth regulatory sailing and a quick payout for long-abused Warner shareholders. How so? Thanks to carefully cultivated ties between the Paramount-controlling Ellison clan—Oracle founder Larry and movie mogul son David—and the guy in the White House (as detailed here in previous columns).

I’m skeptical but paradoxical evidence has emerged in recent days that Netflix’s mostly cash bid may be sincere. In a leak to Mr. Trump’s favorite outlet, the New York Post, a White House official claims to be sizing up antitrust action to derail its offer. Not even shocking anymore is certain advice from the peanut gallery to Netflix about how to counter: strike a development deal, as Amazon recently did, with Melania’s production company.

Comcast’s bid, like Netflix’s, is complicated by Comcast’s desire for only Warner’s streaming and studio assets, not its lagging linear cable channels.

CEO Brian Roberts supposedly faces an additionally steep hill because of all of the anti-Trump propagandizing Comcast’s MSNBC has done over the past decade. Some still see a sliver of a window. Mr. Roberts might curry favor with Mr. Trump by vowing to retain Warner’s CNN and nudge it, combined with already-owned NBC News, toward more “balanced” coverage of the administration.

Remember when Mr. Trump was going to drain the swamp? This is the swamp becoming an ocean. Giants of Corporate America such as Comcast and Netflix may not be thinking about the best use of the Warner assets. They’re thinking about how to slow down a favored behemoth from getting those assets on the Trump-aided cheap. If they want the assets themselves? Better suck up to the White House. Even worse are the hardheaded dollars-and-cents realists of Wall Street who take this new reality as a given.

Mr. Trump wouldn’t be the first president to harness ever-pliable antitrust to political ends. The lack of the customary personal and corporate fig-leafing is what signals a new and different era. Netflix has reportedly reached out to the administration to explain—correctly—why treating it as an incipient subscription streaming monopolist is wrong in a world of YouTube, TikTok and countless ad-supported streaming competitors.

But larger interests are at stake. The U.S. economy functions better when private investors decide how assets should be managed to reward shareholders and please customers. In this regard, the Paramount-Ellison crew even without Trump favoritism can make a good case for itself. The one factor, ironically, that might yet derail its strong position in the Warner Bros. bidding is the stock market’s wavering confidence in the AI revolution. Oracle, on which a significant part of the family’s wealth depends, has seen a third of its market value go poof in 10 weeks.

Why is this an irony? Because the one place where AI hype isn’t overhyped is in the recorded entertainment industry, whether we’re talking about computer-generated imagery and screenplays, reviving long-dead actors, AI songs on Spotify, or spectacular text-to-video tools like OpenAI’s Sora and Google’s Veo 3.

A case for the Ellisons, with their tech cred, is entirely makable on the merits, even if they have to pay full price as dictated by the market, without Mr. Trump’s alleged thumb on the scale.