Chasing the Twenty Billion Dollar Dragon
About once a decade, some star-struck CEO gets huge, Scrooge McDuck dollar signs in his eyes when he sees how much money Hollywood claims it’s making.
Despite the fact, their corporation is no conceivable way an entertainment company, the aforementioned CEO picks off a studio. And right on cue, Hollywood proceeds to treat him like a barefoot hayseed who fell off the turnip truck in the middle of Times Square. It’s never pretty and it always ends in tears.
In the Sixties, it was Gulf and Western buying Paramount. In the Eighties, it was Coca-Cola buying Columbia. In the Nineties, it was AOL picking up Time Warner.
The Twenty-teens brought us AT&T acquiring Warner Media, and now they are doing the same thing that every other corporation ends up doing eventually. Ditching the studio.*
For whatever reason, these magnates never learn from each other. But they do seem to have shared characteristics, the CEO wants to pal around with Hollywood celebrities and be part of the Hollywood Glamour. Apparently being completely unaware of what the old definition of glamour is. Regardless, the CEO in question gets to put on a tux and walk the Red Carpet on Oscar night, then hold one of the bigger After-Parties when everyone wakes up from the award show. And they all seem to believe that Hollywood’s business practices are simply a little bit behind the times. That if they bring their studio’s business structure in line with the rest of the business world it would make a lot more money. The star-struck magnates in question appear to be blissfully unaware that there are reasons that a den of thieves is not open to reform or modern accounting practices.
Admittedly this one is a bit different in that the breakup is quite a bit more dramatic than usual.
The chump in question this time was SJW super-chief, Randall L. Stephenson. He forced the $49 billion purchase of the money-sponge known as DirecTV as well as the blatantly stupid purchase of TimeWarner for $85 billion, (making Bob Iger’s merely ///$70-billion over-payment for Fox look sensible by comparison). In his spare time, Stephenson destroyed the Boy Scouts of America by leading the charge to include gay scoutmasters, gay scouts, and girls as president of the BSA.
The official reason he wanted Warner was that he was hypnotized by Netflix annual report, which had reported a year end gross of $20 billion dollars. That looks like pretty easy money, I bet anyone can do that!
In what little fairness I can muster for this asshole, the view at the time was the Netflix’s days as the King of Streaming were born numbered. Everybody knew that Netflix didn’t own its biggest eyeball magnets. Sure, they had an in-house hit with Stranger Things but long term, they were the new Blockbuster Video. The company that took the crown away from Netflix would have a guaranteed low-risk $20 billion in annual income.
I call this Chasing the Twenty Billion Dollar Dragon.
So far no one has caught it. And it doesn’t look like they are going to at this point either. Despite a now vast array of streaming options, no one has taken any kind of chunk out of Netflix’s streaming audience.
At the time of his “retirement,” last year, Randall Stephenson had put Ma Bell in $200 billion in debt. And in exchange he got HBOmax. I hesitate to call HOBOmax third place because the Show position implies they are in the race at all and at 44 million subs against Netflix’s 207 million, they just aren’t.
You’ll be shocked to learn he was a big Bush supporter.
Okay, I’m done here.
*In fairness this is not quite an ironclad rule. Sony still owns Columbia despite the fact that it has never been a money-maker for them. And while the AOL TimeWarner merger was on track to be an abject failure, it was TimeWarner that ended up jettisoning AOL after the bottom fell out of dial-up internet.
