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I realize that it’s some tough goings for almost every sector of the economy – except, apparently, psychiatrists are still banking because every is crazier – but I didn’t think we’d start seeing this kind of speculation until the downturn got worse or continued for another year.

According to an article written by Mario Gabelli for the most recent issue of Barron’s (which is in print and not, say, on the internet), there’s a strong possibility that the majors might seek to merge with one another in an effort to bring down the bottom line. I wouldn’t want to speculate, but I assume part of that bottom line would include salaries.

The money quote here:

Today there are seven or eight motion-picture studios. A round of consolidation will occur in the next six to twelve months because of the costs of financing, prints and advertising, the benefits of globalization and such.”

Specifically, Gabelli points out Paramount as a studio ripe for a merge with either Sony or Universal.

Gabelli is a well-known financial analyst and the CEO for Gabelli Asset Management Company Investors – which has been operating as a brokerage house and financial advisor since 1977.

Singling out Paramount isn’t totally off base, but what’s really fascinating is the broader forecast that there will be a host of mergers or consolidations taking place over the course of the year. By that acclaim, we could see several studios pairing off. I assume that the list of majors includes Sony (who owns MGM and Columbia), Fox, Warners, Disney, Paramount, and Universal. Could we see some of these companies come together over the next year?

What do you think?


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