Glam, Disruption Don't Necessarily = Profits - One Positive Scenario

Yet another generation of leaders and rank and file grows up. There is nothing new under the sun.

They get it, once again, that being part of a glam sector (entertainment, media) and a major disruption (streaming) doesn't necessarily correlate with anything. That is, anything positive. Or what to bet on as a career path.

Financially challenged Warner Bros. Discovery could be put out there on sale. 

Paramount has been losing money on streaming. Disney isn't doing too hot either.

In addition, at Disney parachuted-back-in Bob Iger has to make big portfolio decisions. Those include ESPN as a keep or throw-back. So much for sports being a must-be-there in that niche.

What's ahead in entertainment/media could be massive consolidation, with large losses of ownership, power, influence, and jobs. Here are the details from the experts.

The ramped-up M&A activity could be a lifeline for law firms to have the revenue to hang on to their stars. In Law.com, Mintz Levin's Bob Bodian shares the chatter he hears among equity partners at other law firms. They anticipate a haircut in 2022 PEP. (But Bodian assures us his firm is doing jolly fine.)

The equity partner default expectation has been for an ever-growing PEP. Since the law-firm sector is no longer a monolith not every firm will disappoint. And it could be to them equity partners could flee. They need the money. Universal is lifestyle creep.

Here was the PEP for 2021.

FirmPEP
1. Wachtell$8.4M
2. Kirkland$7.388M
3. Davis Polk$7.01M
4. Sullivan & Cromwell$6.366M
5. Paul Weiss$6.162M
6. Simpson Thacher$5.980M
7. Cravath$5.803M
8. Quinn Emanuel$5.746M
9. Latham$5.705M
10. Cahill$5.533M

A surge in M&A can usher in the promise of a considerably better 2023 PEP. The leadership will tell equity partners: Stick around for that. So a number of law firms might be having visions of big deals dancing in their heads. Those with a track record in entertainment M&A might feel they have the branding out there to attract some of the whopper deals. For example, Paul Weiss had handled the legalities for MGM in its acquisition by Amazon. It was a $8.45 billion deal.

But that’s just M&A potential. Professional anonymous networks regularly post on deals which die. Associate hopes for making their hours by year’s end are dashed. No Hail Mary passes.

In addition to natural attrition dealmaking is threatened by the fierce antitrust ethos of the FTC. It has sued to halt Microsoft’s combining with gaming corporation Activision Blizzard. Also, financing is tight and expensive.

Takeaway. For the many who need a paycheck the current uncertainty in entertainment (as well as law firms and more) is a warning to approach any work situation as just-in-time. Don’t settle in. Don't assume anything.

Sure, get a contract. Departed Disney CEO Bob Chapek made out well through the beauty of contract law. However, the loss of face, power, influence, and confidence is probably profound for him. Posts on Reddit Jobs make that emotional set palpable. Also, beware lifestyle creep. A number of those I had coached who had lost big jobs got it from the get-go that they likely would never land positions which paid comparable money.

UPDATE:

Another headwind for M&A. As Bloomberg Law reports, a group of gamers have sued Microsoft in federal court about its proposed combination with Activision. The litigation is "DeMartini v Microsoft." Activision is not named as a defendant.


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