Wall Street, Hollywood’s biggest enemy

Do the CEOs of today’s media companies love cinema and television?

Hollywood writers and actors wonder this out loud, and it’s a fair question. Because if we’re talking about perceptions? It seems that these high-paid executives may be selling furniture or cars all they care about.

But even the CEOs of furniture and auto companies understand that you actually have to do it. to do product. Hollywood dignitaries claim otherwise, resulting in job cuts. writers And actors The strike is approaching its sixth month. Earlier this week, Warner Bros. Discovery CEO David Zaslav aforementioned As a result, the company will take a hit between $300 million and $500 million in 2023. It seems like a compelling reason for the studios to negotiate a contract that would get everyone back to work.

And yet…

Shall we mention that Zaslav’s (and other executives in the company) performance-based bonus package is as follows? set Did you attribute that to free cash flow in March? Money that should – should be spent – on TV and film production. Every week, when CEOs fail to resolve strikes, it’s hard not to be skeptical of all this.

But these are the same Hollywood decision makers who have embraced the dreadful IP doomsday cycle that reshapes intellectual property and presents it on an endless conveyor belt. It’s a hedge against risk and is shaped by an almost obsessive focus on Wall Street. That’s why there’s little enthusiasm among studios to greenlight the once-respectable mid-budget movie. Meanwhile, streaming has become a mid-range race as network TV has become a wasteland for police programming.

TV critic Maureen Ryan writer He published his book “Burn It Down: Power, Complicity, and a Call for Change in Hollywood,” and has recently: This Observation: “If I were a shareholder or board member of one of these companies, I would have questions about paying these guys tens of millions (if not billions) to drag the entire industry into a ditch and then set the ditch on fire.”

But CEOs aren’t rogue actors here. The boards they are responsible for are also complicit in this short-term obsession; Ditching and setting the industry on fire is a problem anyone else will have to worry about in the future. All they care about is that stock prices rise in the next quarter, even if that means no one will be making television or movies in the near future.

Andrew A Rosen He writes a newsletter called The Medium, which looks at media companies from an investor perspective. “We are at a crossroads,” he said to me. “On the one hand, you need to manage one to two quarters ahead to keep shareholders happy. But on the other hand, guys who are really good at this are really bad at building profitable flowing business models. Everyone is losing money. But they also don’t understand how to develop a product. I’m talking about software that people interact with, enjoy and customize for each subscriber. It’s really hard to do that.”

What he means is: How can you achieve this when there are so many titles to choose from in any streaming app? to discover anything? Solving this is the brass ring for the streamers. Specifically, anticipating what interests each viewer and bringing those headlines in front of them. It can potentially reduce loss. However, Rosen said that the number of publishers figuring out how to customize the algorithm to this extent is not enough.

“And none of these guys” (CEOs) “have developed software products before. And they don’t really want to find out, they just want to spread the right story that will make shareholders happy.”

So chaos reigns.

This was underlined when there was a conflict last week. Exploded A battle between the old model (pay TV) and the new model (streaming) between Disney and Spectrum, the second largest US cable company. Second, it saw Disney divert its major efforts away from linear TV, and this shift helped speed up the cord-cutting. You can see why the two companies fell into discord.

Spectrum is owned by Charter Communications, which pays Disney $2.2 billion in annual transportation fees. Disney wants more. Charter says that cost must be passed on to customers, and it wants something in return: making the ad-supported tiers of Hulu and Disney+ free to cable subscribers. Disney resisted and pulled their linear channels from Spectrum; which means ABC, ESPN and FX are currently closed to subscribers. Both holdings do not arouse sympathy. Meanwhile, it is the spectator who suffers.

Even Wall Street seems unaffected. Financial correspondent Joel Baglole single There are three media stocks to sell as the Hollywood strike continues: Disney (trading at a nine-year low), Paramount Global (cutting its dividends to shareholders), and Warner Bros. Discovery (share price down 50 percent compared to last year).

“A lot of confusing stuff happens at these media companies trying to figure out how to get themselves out of the hole they’ve dug,” said Tom Fontana, creator and TV writer of HBO’s “Oz.” said In the Washington Post last week. “One way they want to get out of this hole is by making us pay for it.

“They made mistakes and they want us to pay for them.”

What would Irving Berlin know from all this? Hollywood wasn’t as low a place as he was when he wrote the lyrics for “There’s No Job Like Show Business” nearly 80 years ago. But when media CEOs seem willing to do the opposite, the phrase “let’s get on with the show” resonates differently.

Nina Metz is a Tribune critic.

nmetz@chicagotribune.com