The City is buzzing this morning with news that the £86bn merger between Warner Bros and Paramount has been approved. City lawyers are hailing the deal's British protections, but let's not get carried away. This is a massive consolidation of two struggling studios, a marriage of mediocrity dressed up in tax-efficient structures.
The supposed protections for British talent and production are likely just smoke and mirrors to appease regulators. Gilt yields barely flickered, signalling the market's indifference to this corporate behemoth. Capital flight?
Not yet, but if this deal fails to deliver synergies, shareholders will be the first to bail. Fiscal responsibility? The government should be cautious: tax breaks for the creative industries are one thing, but this is a bailout of mismanaged assets.
The bottom line: a bigger company doesn't mean better films. Expect volatility as investors digest the real cost of this union.
