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Paramount’s Paused Merger Doesn’t Ease Creators’ Fears–But The ‘Obsession’ And ‘Backrooms’ Story Should.
Hollywood & Entertainment Paramount’s Paused Merger Doesn’t Ease Creators’ Fears–But The ‘Obsession’ And ‘Backrooms’ Story Should. By Ashlee Difuntorum ,
Forbes contributors publish independent expert analyses and insights. Ashlee Difuntorum is an entertainment litigator who covers new media. for Legal Entertainment Follow Author Jul 27, 2026, 01:29pm EDT --:-- / --:-- This voice experience is generated by AI. Learn more . This voice experience is generated by AI. Learn more . Paramount just agreed to pause its proposed $110 billion acquisition of Warner Bros. Discovery until June 1, 2027, or until courts resolve the litigation filed to block the merger, whichever comes first. The deal may be on hold. But the anxiety it creates for independent creators is not.
Many creators watching from the sidelines fear that fewer studios means fewer buyers. Fewer buyers means less leverage. Less leverage means fewer opportunities for people who haven’t already broken through.
That fear is real. But it’s worth separating from what creators already have.
Under U.S. copyright law, creators own what they create. No merger changes that. A creator who builds an audience and owns their work enters any market, consolidated or not, with something buyers need. That’s the foundation the Obsession and Backrooms directors built on. And it’s replicable.
Critics argue consolidation will reduce creative risk-taking and bargaining power for anyone not attached to a major franchise. The Hollywood Reporter argued the merger “would create a company where preserving the capital structure could become more important than investing in the product itself.”
A Los Angeles County report estimated the deal puts roughly “2,495 jobs in Greater Los Angeles County and about 6,000 globally at potential risk.” The state attorneys general suing to block the deal contend it would give one entity too much control over film distribution, anticipated blockbuster film distribution and licensing cable TV channels.
Paramount and its supporters argue the opposite.
The DOJ approved the deal in June, concluding it would help workers by strengthening competition. Paramount says the combined company would be committed to producing a minimum of 30 theatrical films annually, which it argues would drive long-term job growth across the film and creative industries.
Both sides have real arguments. But underneath that debate sits a legal reality that doesn’t change regardless of how the merger plays out.
While Hollywood debates the merger, two films arrived that reframed what’s possible.
Obsession , directed by YouTube filmmaker Curry Barker, cost $750,000 to make. Backrooms , directed by YouTube filmmaker Kane Parsons, cost $10 million. Both outperformed studio releases made for multiples of their budgets.
Their directors didn’t walk into Hollywood cold. Barker owned Obsession outright and sold it to Focus Features for around $15 million . Parsons built such a devoted YouTube following around his Backrooms shorts that A24 and Chernin Entertainment co-financed the film .
Both arrived with something buyers needed before any studio got involved: audiences they built themselves.
That’s a fundamentally different position than a creator who develops inside a studio under a work-for-hire agreement. Under a work-for-hire agreement, the studio owns the IP from the outset, and if the studio merges, restructures or shelves the project, the creator has no recourse over the underlying work.
Under U.S. copyright law, the person who creates a work is its copyright owner . Copyright ownership vests in the author the moment an author fixes an original work in a tangible form—a script, a recording, a visual effect. No copyright registration is required. It exists automatically.
Studios use work-for-hire agreements to transfer that ownership. Under U.S. copyright law, any transfer of copyright ownership or exclusive license to use a work must be in writing and signed . A verbal agreement doesn’t do it. An email exchange doesn’t do it. An invoice doesn’t do it.
The merger changes who the buyers are. It doesn’t change who owns what was created.
Every generation of creators has faced a version of this moment. The internet changed how content was distributed. Streaming upended the studio model entirely. Each time, the fear was real. And each time, the people who adapted found new footholds.
The merger may reshape Hollywood’s landscape. What it won’t change is the fundamental leverage that comes from owning your work.
A creator who owns their IP can license or sell it to Paramount, to Warner Bros. Discovery, to a combined entity, or to none of them. That’s the foundation of everything the Obsession and Backrooms directors built.
Neither arrived overnight. Both directors spent years building audiences on YouTube before their films existed. The ownership advantage they carried into Hollywood was earned through that grind. It’s replicable, but it requires the same foundation: an audience that belongs to you, and work that does too.
What creators own—and what they sign away—determines their position in any market, uncertain or not.
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