• by Wayne Friedman , Staff Writer, Yesterday

History is not on the side of recent financial deals when it comes to the lure of the legendary Warner Bros. name.

Is corporate hubris -- something that is tough to shake -- to blame?

Skydance Media -- which only recently bought out Paramount Global before its pursuit of Warner Bros. -- believes it is different.

It has some financial wherewithal -- via one of the wealthiest men in the world, Larry Ellison -- willing to take a swing at things.

The Warner Bros. name has been the essential draw when it comes to companies large and small --- which have crashed and burned in recent deals.

New York University Professor of Business Scott Galloway reminds us of Time Inc. -- formerly a print media powerhouse -- and its deal to merge with Warner Bros. in 1989, for which it took on $10.8 billion in debt.

That financial weight lingered around the company for around 10 years until Time Warner thought it had a savior in AOL.

That move turned out to be a bigger disaster -- with AOL Time Warner -- leading to a historic $99 billion writedown and ultimately, in 2003, removal of the AOL name from the company name.

Shall we move on to AT&T?

“In 2018 the synergy delusion struck again. This time, AT&T acquired Time Warner for $85 billion -- creating WarnerMedia on the theory that its “dumb pipes” were the chocolate to Warner’s peanut butter (i.e., "great content").

That did not work, instead leading to AT&T's sale of WarnerMedia for $43 billion. If you are still following, that’s a “50% haircut.”

Now in the present, we move on to Paramount, which seems more logical in combination. But there is a massive difference.

The underpinning of the company -- linear cable TV networks, long the cash cow and representing around 50% of those companies' cash flow -- has seen massive revenue declines. That is especially evident with its advertising revenues, and soon with distribution revenues via continued cord-cutting.

"The Paramount-WBD combo is two drowning men clinging to each other, hoping the combined weight of their $79 billion in debt will somehow act as a flotation device. It won’t, which is why Paramount’s debt was downgraded to junk status," Galloway said.

And now, Paramount wants to get rid of its consumer-facing HBO Max streaming brand, with the small caveat of letting HBO run "independently."

Now, to be fair HBO has had some great recent successes, as with "Game of Thrones." But can it do more, creating big billion-dollar franchises?

Perhaps much of the work will be left for Warner Bros. studios to do.

Looking at the core streaming business, which is the better brand? The Ellisons seem to believe it’s the "Paramount" name, less so "HBO" for consumers.

Evidence of the future might from Netflix investors which rewarded big premium streamer -- by dropping out of the WBD pursuit -- with the 15% stock spike on the day, with its equity value jumping $60 billion since it pulled out.

The future? Unbundling -- not just the obvious cord-cutting reference. But think of this as a broader corporate strategy: Massive staffing cutbacks, and perhaps wholesale selling of major pieces of the company.

Amazon, Apple, Netflix, and YouTube must be smiling about all of this. The industry has moved on, and perhaps "Warnermount" or "Para Bros." will see more history.