It’s fair to say that many in Hollywood are wishing good riddance to 2023.
Between the brutal Writers Guild of America and SAG-AFTRA strikes, a crumbling TV advertising market, and looming uncertainty over the economy and generative artificial intelligence, it was a year to forget for the business.
While the strikes are over and everyone is back to work (at least after the holidays), 2024 is shaping up to be nearly as uncertain, with venerable Hollywood studios likely to make market-moving decisions, the continuing evolution of generative AI spooking creatives, and macroeconomic factors all taking their toll.
Here are some of the big business questions The Hollywood Reporter has for 2024:
Shari Redstone’s Paramount’s Predicament
Buy, sell or…?
What will Shari Redstone do? Does the mogul pursue a deal with Warner Bros. Discovery, now that we know Bob Bakish and David Zaslav talked about a possible deal on Dec. 19?
Does she keep talking to Skydance and RedBird about her family holding company National Amusements? Or does she see what else the market will bear? Perhaps selling things off piecemeal?
The future of Paramount Global, the media company that owns the venerable Paramount studio, CBS, Paramount+ and a bevy of declining cable channels is top of mind for many in Hollywood.
Will Redstone sell her stake, allowing the buyer to decide Paramount’s future? Or will she consider an entire sale? Are there even any real buyers for the whole package given its debt load (WBD has lots of debt of its own)? Or will she decide to hold onto the company and pursue a turnaround plan? Meanwhile, Paramount+ continues to get closer to profitability, even as its scale suggests that it will have a tough time competing with the likes of Netflix and Disney atop the streaming wars.
Climbing Down the Peak Content Mountain
And now what?
Early this year, FX chief and TV’s unofficial mayor John Landgraf revealed that TV channels and streaming services debuted 599 scripted series in 2022. 2023, with its strike-impacted production schedule will be well below that number. And the market may never go back.
Studios were already beginning to pull back before the strikes, but the strikes gave them the green light to cancel projects en masse, including some that had already received season orders. The big question is what the “new normal” is. Disney expects to spend $25 billion on content in 2024, down from $27 billion in the strike-impacted 2023. But with sports costs expected to be flat, those declines will be focused in entertainment fare.
Bob Iger’s Disney Dilemma
Succession, Disney-style, awaits.
Getty
From rolling out a comprehensive strategy for the future, to finding a suitable successor, to dealing with Nelson Peltz and former Disney execs Ike Perlmutter and Jay Rasulo, Iger has his hands full at Disney this year.
Regarding Peltz: Iger and Disney’s board will kick off 2024 with a likely proxy fight, with Peltz seeking two board seats, one for himself and another for former Disney CFO Jay Rasulo. Iger outmaneuvered Peltz last time around, but with Disney stock still sagging, it isn’t clear what pitch the company will make to counter Peltz’s play. Of course, Peltz has been tight-lipped about his turnaround plans too.
On succession: Iger says that the hunt for the next CEO is “robust” and that he has been conducting a “postmortem” about what happened last time, so that it does not happen again. Will Iger tap an internal exec or an outside hire for a new role (perhaps COO?) setting them up to be the next CEO? Or will that wait until 2025? Either way, Iger says he is “definitely” out in 2026.
On Strategy: All eyes are on ESPN, which is seeking outside partners and developing a direct-to-consumer strategy. Those details are expected to crystallize in 2024, even if the flagship ESPN product doesn’t debut in the calendar year. And what about Disney’s movies, which have had a tough year? Iger says he is working hard on trying to right the creative ship, though the results may need to wait until 2025 too.
Generative AI Risks and Opportunities
A WGA sign reads ‘Humanity vs. AI’ as striking members picket outside Warner Bros. Studio on August 16, 2023 in Burbank, California.
Mario Tama/Getty Images
If 2023 was the that generative artificial intelligence broke into the mainstream, 2024 could be the year that we see just how impactful it will be. The WGA and SAG-AFTRA were spooked enough by the technology to seek job protections for the technology (though Justine Bateman has argued SAG did not do nearly enough).
While AI is already widely used in the special effects industry, will it actually take jobs from actors, writers or others in the industry? Will an AI startup use the tech to create a film outside the studio system?
And of course, will the studios see AI companies as a potential revenue source, perhaps by licensing their libraries to teach the software about the movie business past and present?
Deals, Deals, Deals?
Will Lachlan look to reunite the Murdoch empire?
Drew Angerer/Getty Images
2023 was not a booming year for media deals. Sure, deals got done: Endeavor’s acquisition of WWE and Microsoft’s blockbuster Activision Blizzard deal being good examples. But rising interest rates and an aggressive DOJ and FTC have led to a slow market.
But a handful of court losses from the regulators and a strong probability of lower rates next year portend a dealmaking boom.
Sure, we know about the Paramount talks … but will Comcast put NBCUniversal in the game? And what about Fox? Could a new effort at reuniting the Murdoch empire be in the cards?
Will Advertising Recover?
Political ad spending is kicking in to high gear.
Anna Moneymaker/Getty Images
2023 wasn’t just a lost year for film and TV productions, it was a lost year for advertising as well. Yes, there were bright spots: Sports held up, and new streaming offerings continued to grow, but linear TV, the linchpin of the entertainment ad biz, fell off a cliff, and it still hasn’t recovered.
Making matters worse, the ad giant GroupM predicts that the ad market will slow in 2024, with the agency saying that the industry has “reached a significant inflection point in the realization that linear TV is well and truly in decline.”
The one hopeful sign: Political spending during the 2024 election is expected to provide a boom year for owners of local TV stations.
The NBA Power Play
Where will NBA rights go?
Michael Reaves/Getty Images
What will Adam Silver do? The NBA commissioner is beginning rights renegotiation talks with the league’s two current TV partners: Disney’s ESPN and Warner Bros. Discovery. Both brands desperately want to keep the NBA — it is seen as the most attractive live sports rights after the NFL given its ratings and younger audience — but neither wants to pay the henfty increases the league is said to be seeking.
And at the same time there are other players circling the court: Amazon, NBC, Apple, YouTube … the NBA has real demand. As of now, the league is expected to seek at least three partners, giving one of the other parties a chance at games if it reups with ESPN and TNT, as expected (albeit likely with fewer games per season), but if it wants to maximize its cash haul it could also go for four partners, pursuing a strategy closer to that of the NFL or NASCAR.
Its a big deal, and one that could alter the future of sports rights. The ball is in the NBA’s court.
Gulf Ambition
Jeff Zucker is looking for more big media deals.
Mike Coppola/Getty Images
2022 was the year that Saudi Arabia’s Public Investment Fund orchestrated a deal to merge LIV Golf and the PGA Tour, giving it a significant ownership stake in the golf business. And it was the year that Abu Dhabi’s IMI joined forces for RedBird Capital and Jeff Zucker to launch RedBird IMI, focusing on sports and media investments. And Qatar’s sovereign wealth fund acquired a stake in Monumental Sports & Entertainment, the owner of the Washington Wizards.
2023 may be the year those investments go into overdrive. RedBird IMI is in the market seeking big deals, Saudi’s PIF has inked deals in the MMA space, and has expressed interest in acquiring the Miami Open and Madrid Open from Endeavor’s IMG. It has also held talks with ATP, which puts on the Grand Slam tennis events, about hosting a new event in Riyadh.
And Saudi has sought to expand its film business with lucrative production offers, among other incentives.
Sports and entertainment are not only lucrative, they carry influence, and the gulf states have the resources and all appear interested in exploring the sector.
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