One Industry Take on “Penske Merge-ageddon”
Below the Line generally doesn’t cover the internal media business, but you may already know from yesterday’s announcement that the top two longest-running trades, Variety and The Hollywood Reporter, are merging. The idea of two titans within the entertainment industry, bitter rivals for over 80 years, working together as one cohesive unit has the entire business in a tizzy. People on all sides of the deal are absolutely freaking out and not just the people at either trade who could potentially lose their jobs.
Reading the Variety press release — don’t bother looking for the same release anywhere on THR, it doesn’t exist — you would think it was the successful conclusion of the 100-Year War between France and England – who knows the words to “Kumbaya, My Lord”?
It’s on the tip of my spear, but all’s right in the world. Nothing to see here.
Okay, so we know that’s a deep lie.
Let’s take the slightest reality check. Variety and THR are both above-the-line trades – meaning they cover primarily Actors, Directors, Writers and Producers – that’s it. By contrast, Below the Line, well, you get it, we cover the crafts, everyone else. We cover your world.
In the tiny entertainment news world, we have two trades that cover exactly the same thing and have for about 80 years. Can you think of another industry that has two lead trades that cover the exact same thing – don’t worry, I’ll wait [insert image of man taping his foot here] – No, couldn’t find one, not one, could you? That’s because it’s stupid to have that. Why, why, why would you or anyone allow that to happen?
It’s simple really. We aren’t any other industry. We live and die on nothing – we spend hundreds of millions of collards, billions of dollars manufacturing what used to be about $1500 worth of silver in 8 cans of finished product. All the trades do is, well – just reporting on what actors and directors and studio are doing, and mostly reviews: Film Festival reviews, Award Show reviews, Performance reviews, Box Office reporting (a financial review, of sorts) and of course, Film and Television reviews.
So why are two trades that show up at exactly the same runways and red carpets and dark rooms in the basement of Sony or Warners or where ever to review the same film or show merging?
It’s easy – because Universal can’t have one trade be stronger or above the other. The good Bros. Warner would never let Variety snub a screening of this or that. What would they say on the top floor of Black Rock if THR decided NOT to cover the noms and wins of their shows? Do you think all the smiles would turn to frowns on all the Amazon boxes if one trade took to hating them and only wrote about Netflix? Doubtful. (Maybe, although Amazon is probably already working on Interactive Box Smiles Version 2.0 a.k.a. IBS 2.0.)
And what’s the number one panicle in our industry? Oscar and Emmy. Oh my, what extortion would a single trade be able to exert on an entire industry… the answer from on high from every award consultant will and should be a resounding “NEVER!” (By the way, this would a bit of a duplicitous scream of “never” – of what value is an award consultant or agency with just one trade? Maybe not none but certainly a great deal less.)
Up until yesterday’s lopsided announcement, the studios have maintained the balance in their own best interest – plan and simple.
Whelp, that’s over.
Here’s a preview of what’s next – layoffs and early retirements, some defections, but how many amazing writers can Sharon Waxman over at The Wrap absorb? Duplicative middle management — editors, layout people, distribution, sales, marketing, etc., all gone in the coming weeks. Upper management is usually last to walk the plank, if they haven’t already secured something that resembles a landing by now.
Foreign offices will close — not sure how many of those are even real at this point.
One of the offices will shutter – I’m guessing THR – the sore thumb of a Penske building will probably survive.
It takes a veritable army to cover all the self-congratulatory crap we generate, and that army just got a whole lot smaller.
Here are some interesting questions:
– How much trouble is Penske in with all his titles?
– What are MRC thinking? I never fully understood why a production company, a pretty successful one at that (Ozark, etc.) would buy into an industry print trade business. It feels almost like they invested in Dunder Mifflin.
– How much trouble are they both in? THR laid off about 15 people, including their publisher, several months back – that’s not good.
– What titles will be shed? I haven’t touched a printed copy of either V or THR in over a year and that was at last year’s award shows – piles and piles of colorful copies – just sitting there, not being picked up or taken home. For Penske, the big question is why even keep Variety? Other than Sharon Waxman’s The Wrap, Deadline by all accounts is the only trade that’s being discussed or pushed for content news. That’s just the most obvious title that seems ripe to be spun off, merged or die.
– What will the awards consultants and agencies do when the question of how to balance an award campaign comes down to PMRC or PMRC?
– What will the studio publicity departments do when confronted with a discount-proof single advertising rate card?
– What will the two leading Academies do for much of the same? It’s one big echo-system, and the Academy of Motion Pictures and the Television Academy need the trades, as much as the trades generate most of their revenue from the Phase I and Phase II FYC (For Your Consideration) voting advertising?
– Is the LA Times brass doing cartwheels down the hall right now? Hell, I know I am – we LOVE FYC ad money!
– Does anyone care?
There’s only a couple trades that receive the largesse of FYC advertising year after year – we are one. I can tell you right now, this past Emmy award season was a complete flop. Companies like Amazon sat out. Netflix was almost silent. NBC and HBO, as well. That’s not just Below the Line – all trades and Union magazines and such – horrible season and no real indication Academy season (starting now) will be much different.
A nimble little company like Below the Line can duck and cover, but Variety and THR can’t – one dead award season must be devastating for both of them.
Some of this in conjecture, but ask yourself this – if Jay Penske could announce he was buying the remnants of a defunct Hollywood Reporter, I would bet my soul he would have done it.
These appear to be two large-breed carnivorous animals wounded but not willing to fall but also not willing or able to eat the other.
How many studio executives alive and dead are laughing their asses off at the downturn of at-times despised trades getting their comeuppance only to wake up tomorrow with a hangover of dread that the financial tumult they created just ended and they’ll be one of the casualties?
Remember: in business, if you can’t control it, it controls you.
Come on in, no mask needed, the show is just starting.
(Feel free to let us know what you think and whether you want to see this news continue to be covered on Below the Line.)