“The transition will be seamless.”
Those words usually accompany an announcement of a corporate takeover and, of course, it never works out that way. And it likely won’t for Paramount 2024.
Consider history: When MGM found it had become a corporate conquest in the mid-1960s, not only was the studio staff fired but three major movies were canceled mid-production. The executive guillotine was also in action at Warner Bros a year later, when the production team was decimated by its new proprietor and even Looney Tunes was dropped.
Paramount’s “transition” in 1966 was even more lethal: Not only did the new studio owner cancel existing shoots but he also greenlit three of the biggest flops in Hollywood history – earning renown as “Bluhdorn’s Bombs” (see below).
History may not automatically repeat itself in the deal now unfolding behind the filigreed Paramount gates, but the “seamless transition” already sounds problematic: It involves hyperactive entities like Skydance, Sony and Apollo, plus potential regulatory mandates.
To be sure, these players offer a greater ring of authenticity than did the wannabe intruders of a previous era. Kinney Corp., which devoured Warners, owned parking lots and funeral homes. Kirk Kerkorian, who acquired MGM, was an embattled casino owner, and Christopher Skase was an Australian pirate who outbid Rupert Murdoch for 20th Century Fox. He promptly admitted that he was broke.
Takeovers involving foreign companies ran into even more exotic glitches – witness Universal’s stormy regimes under Matsushita (Japanese) and Vivendi (French). All discovered that studios are not normal corporate animals with predictable profit-and-loss equations. They are more akin to heavy-breathing carnivores with their own distinct twitches, lurches and instincts for self-preservation.
This was dramatically discovered by Charles Bluhdorn, an Austrian-born financial manipulator who had collected a drab array of corporate assets ranging from automobile parts to zinc mines before becoming enamored of Paramount.
To Bluhdorn, the formula for studio success was to emulate the classic MGM model: glitzy, star-driven musicals. Acting on impulse, he committed to lavish deals for Paint Your Wagon (Clint Eastwood), Darling Lili (Julie Andrews) and On a Clear Day (Barbra Streisand), among others; all portended enormous losses.
The Bluhdorn era ended in a cosmic battle for control between Sumner Redstone and Barry Diller, both of whom offered credentials for the care and feeding of studios. Redstone, of course, won that battle and his daughter, Shari, now plays a key role in deciding Paramount’s fate at a moment of great peril for Hollywood in general.
Wall Street gurus believe she’s already displayed an absence of strategic realism – she missed Murdoch’s shrewd timing in unloading Fox to Disney. Paramount must now not only survive the streaming wars but also reinvent its relationship with CBS along with its other linear entities.
So will the next transition be “seamless”? A three-executive team now runs Paramount, expressing optimism about their fate. A Paramount board committee is weighing a $26 billion cash bid from Sony and the Apollo equity fund. That might mean Sony’s Tom Rothman, at 70 the dean of studio czars, would have a strong voice in Paramount as well as Sony — he’d presided over Fox for 15 years before that. Regulatory issues loom.
The Sony-Apollo bid moves into the slot previously occupied by Larry Ellison and RedBird Capital, which opened a possible leadership position for Jeff Shell, once boss of Universal.
Hopefully, all have studied their studio histories.