WEBVTT - Skydance Merged with Paramount. Now, Its CEO Wants Warner Bros. Too

0:00:00.240 --> 0:00:07.200
<v Speaker 1>Bloomberg, Audio, studios, podcasts, radio news.

0:00:09.680 --> 0:00:12.440
<v Speaker 2>Some of the biggest names in tech and Hollywood are

0:00:12.480 --> 0:00:15.880
<v Speaker 2>training their sites on Warner Brothers Discovery, the media and

0:00:16.040 --> 0:00:21.480
<v Speaker 2>entertainment conglomerate that owns HBO, Max, CNN, and TNT. Earlier

0:00:21.560 --> 0:00:24.800
<v Speaker 2>this year, Warner Brothers Discovery announced plans to split itself

0:00:24.840 --> 0:00:28.680
<v Speaker 2>in two to separate its declining cable networks business from

0:00:28.680 --> 0:00:32.720
<v Speaker 2>its faster growing streaming division. But on Tuesday, Warner Brothers

0:00:32.760 --> 0:00:35.760
<v Speaker 2>said it's starting to consider a broad range of options

0:00:35.960 --> 0:00:40.280
<v Speaker 2>because of unsolicited interest from multiple parties. Bloomberg has learned

0:00:40.320 --> 0:00:44.000
<v Speaker 2>Netflix and Comcast are eyeing pieces of Warner Brothers and

0:00:44.080 --> 0:00:47.680
<v Speaker 2>Paramount Sky Dance, as Bloomberg first reported, made an offer

0:00:47.720 --> 0:00:51.280
<v Speaker 2>for Warner Brothers Discovery, which the company rejected. It's the

0:00:51.360 --> 0:00:54.600
<v Speaker 2>latest in a new round of potential consolidation and deal

0:00:54.640 --> 0:00:59.800
<v Speaker 2>making involving old Hollywood studios and new streaming services. Paramount

0:00:59.800 --> 0:01:04.360
<v Speaker 2>scis itself, a newly merged company, is led by David Ellison.

0:01:04.760 --> 0:01:10.720
<v Speaker 1>David Ellison is a movie producer turned movie mogul media

0:01:10.800 --> 0:01:14.960
<v Speaker 1>mogul who is initially known as the Sun, or perhaps

0:01:15.360 --> 0:01:17.800
<v Speaker 1>known to many as the son of Larry Ellison. The

0:01:17.840 --> 0:01:20.920
<v Speaker 1>co founder of Oracle, the second richest man in the

0:01:20.920 --> 0:01:24.360
<v Speaker 1>world depending on which day, and various net worth calculations.

0:01:24.760 --> 0:01:28.080
<v Speaker 2>Lucas Shaw writes the screen Time newsletter for Bloomberg and

0:01:28.160 --> 0:01:31.240
<v Speaker 2>hosted Sanuel Conference, which took place earlier this month.

0:01:31.440 --> 0:01:33.440
<v Speaker 1>His whole thing was, I'm going to invest in your

0:01:33.480 --> 0:01:36.559
<v Speaker 1>biggest franchises, which are the biggest risks because they cost

0:01:36.600 --> 0:01:41.320
<v Speaker 1>the most, but also probably the best bets. And as

0:01:41.360 --> 0:01:45.640
<v Speaker 1>of earlier this year, merged with Paramount not just the

0:01:45.640 --> 0:01:48.880
<v Speaker 1>movie studio of Paramount Pictures, but the larger company, Paramount Global,

0:01:48.920 --> 0:01:51.520
<v Speaker 1>which also owns a lot of cable networks like MTV

0:01:51.560 --> 0:01:55.200
<v Speaker 1>and Comedy Central, and as a streaming service called Paramount Plus.

0:01:55.400 --> 0:01:58.240
<v Speaker 2>That was an eight billion dollar deal that just went

0:01:58.280 --> 0:02:01.760
<v Speaker 2>down in August. I Wison succeeds in putting together a

0:02:01.800 --> 0:02:05.440
<v Speaker 2>deal that's acceptable to the Warner Brothers board and federal regulators,

0:02:05.840 --> 0:02:09.200
<v Speaker 2>what he'll have is a media behemoth, one that reflects

0:02:09.200 --> 0:02:12.960
<v Speaker 2>both his reverence for Hollywood and his dad's success in tech.

0:02:13.440 --> 0:02:16.480
<v Speaker 1>He's sort of trying to bridge those worlds. Now, that

0:02:16.720 --> 0:02:19.799
<v Speaker 1>sounds kind of great as a talking point. What that

0:02:19.919 --> 0:02:22.840
<v Speaker 1>means in practice is less clear to people, right, you know,

0:02:22.880 --> 0:02:27.639
<v Speaker 1>if you go back twenty years the assets Viacom and CBS,

0:02:28.520 --> 0:02:31.280
<v Speaker 1>they were among the crown jewels and media. They've since

0:02:31.320 --> 0:02:34.160
<v Speaker 1>been lapped and passed by many others, and he wants

0:02:34.200 --> 0:02:36.480
<v Speaker 1>to kind of restore to them to their final glory

0:02:36.520 --> 0:02:40.000
<v Speaker 1>by being the youngest and most tech savvy CEO around.

0:02:43.280 --> 0:02:45.200
<v Speaker 2>I'm David Gerra, and this is the big take from

0:02:45.200 --> 0:02:48.840
<v Speaker 2>Bloomberg News Today. On the show, why David Ellison, the

0:02:48.919 --> 0:02:52.239
<v Speaker 2>chairman and CEO of Paramount Skydance wants to buy Warner

0:02:52.280 --> 0:02:56.239
<v Speaker 2>Brothers Discovery, we'll hear from Ellison himself, plus what other

0:02:56.320 --> 0:02:59.560
<v Speaker 2>companies are interested in the business and what more consolidation

0:03:00.040 --> 0:03:02.760
<v Speaker 2>would mean for Hollywood, the news business, and for you

0:03:02.840 --> 0:03:11.320
<v Speaker 2>and me. Bloomberg's Lucas Shaw has been tracking Paramount's guidance

0:03:11.400 --> 0:03:15.720
<v Speaker 2>his interest in Warner Brothers Discovery very closely. Earlier this month,

0:03:15.919 --> 0:03:19.080
<v Speaker 2>Lucas and his colleagues broke the news Warner Brothers rejected

0:03:19.080 --> 0:03:20.720
<v Speaker 2>Paramount's unsolicited bid.

0:03:21.080 --> 0:03:24.359
<v Speaker 1>Warner Brothers Discoveries in the process of splitting into two entities,

0:03:24.800 --> 0:03:28.120
<v Speaker 1>but it became clear sort of late summer early fall

0:03:28.520 --> 0:03:32.679
<v Speaker 1>that David Ellison made an offer to Warner Brothers Discovery

0:03:32.720 --> 0:03:36.560
<v Speaker 1>of about twenty dollars a share, which is well below

0:03:36.760 --> 0:03:40.280
<v Speaker 1>what we believe the board and management thinks it's worth.

0:03:40.360 --> 0:03:42.640
<v Speaker 1>One of the reasons that they are splitting is because

0:03:42.680 --> 0:03:46.000
<v Speaker 1>they feel that they're not being properly valued by the

0:03:46.000 --> 0:03:49.680
<v Speaker 1>street and that they could unlock value by essentially breaking

0:03:49.680 --> 0:03:50.680
<v Speaker 1>it up into two parts.

0:03:51.080 --> 0:03:53.680
<v Speaker 2>How does this overture stand to change, if at all,

0:03:53.760 --> 0:03:56.600
<v Speaker 2>that plan to split Warner Brothers Discovery into it sounds

0:03:56.600 --> 0:03:59.480
<v Speaker 2>like David Ellison wants the whole thing. He's not interested

0:03:59.480 --> 0:04:00.800
<v Speaker 2>in a part of the company.

0:04:00.880 --> 0:04:01.840
<v Speaker 1>It's not really clear.

0:04:02.000 --> 0:04:04.160
<v Speaker 2>Does that work with the timelet Yeah, I mean yeah.

0:04:04.200 --> 0:04:08.000
<v Speaker 1>My assumption has been that he would do that and

0:04:08.040 --> 0:04:10.360
<v Speaker 1>then spin off all the cable networks, which are the

0:04:10.400 --> 0:04:12.840
<v Speaker 1>assets that generate the biggest share of the profit, but

0:04:12.880 --> 0:04:15.200
<v Speaker 1>that are shrinking and nobody really wants, and that what

0:04:15.360 --> 0:04:18.480
<v Speaker 1>David really wants is the studio and the streaming service

0:04:18.520 --> 0:04:20.640
<v Speaker 1>and maybe the broadcast network, which she already has with

0:04:20.760 --> 0:04:25.080
<v Speaker 1>CBS at Paramount. Now, he can't do that with Paramount

0:04:25.080 --> 0:04:28.960
<v Speaker 1>as it is, because the cable networks account for the vast, fast,

0:04:29.040 --> 0:04:31.280
<v Speaker 1>vast majority of the profit, and so if you were

0:04:31.279 --> 0:04:32.960
<v Speaker 1>to do that, he'd be left with this like tiny

0:04:32.960 --> 0:04:35.400
<v Speaker 1>company that wouldn't really generate enough money to do what

0:04:35.440 --> 0:04:38.440
<v Speaker 1>it wants to do. The exact particulars of what he

0:04:38.440 --> 0:04:42.800
<v Speaker 1>would do in control still a little unclear, Like there's

0:04:42.880 --> 0:04:44.960
<v Speaker 1>no world in which it would make sense to have

0:04:45.040 --> 0:04:48.000
<v Speaker 1>two different streaming services Paramount Plus and HBO Max. You

0:04:48.040 --> 0:04:50.280
<v Speaker 1>have to assume they're very similar that you would they

0:04:50.279 --> 0:04:54.400
<v Speaker 1>would just combine them, pick one. You know, I think

0:04:54.400 --> 0:04:58.680
<v Speaker 1>they're most likely to keep the studios separate for now,

0:04:59.000 --> 0:05:01.600
<v Speaker 1>just because they're antis paiding the blowback from the creative

0:05:01.600 --> 0:05:03.840
<v Speaker 1>community if they were to say that either Paramount or

0:05:03.839 --> 0:05:06.760
<v Speaker 1>Warner Brothers were to go away, and then, yeah, a

0:05:06.800 --> 0:05:09.320
<v Speaker 1>lot of questions about what they would do with cable networks.

0:05:09.360 --> 0:05:12.960
<v Speaker 1>Warner Brothers, Discovery owns HBO, it owns CNN, it owns

0:05:13.000 --> 0:05:16.800
<v Speaker 1>TNT and TBS. TNT it got a lot less valuable

0:05:16.839 --> 0:05:19.000
<v Speaker 1>now that they no longer have the rights to the NBA,

0:05:19.240 --> 0:05:21.560
<v Speaker 1>but still pretty popular cable networks.

0:05:21.760 --> 0:05:24.360
<v Speaker 2>I asked Lucas about the timing here. It's only been

0:05:24.400 --> 0:05:27.000
<v Speaker 2>a couple of months and Skydance Media closed its merger

0:05:27.160 --> 0:05:28.159
<v Speaker 2>with Paramount Global.

0:05:28.520 --> 0:05:30.400
<v Speaker 1>Well, the reason not to do it now, and I

0:05:30.440 --> 0:05:33.200
<v Speaker 1>know some advisors of his have urged him to wait.

0:05:33.920 --> 0:05:36.880
<v Speaker 1>Is that the feeling that the price will only go down,

0:05:37.200 --> 0:05:39.960
<v Speaker 1>that Warner Brothers Discovery is a damaged company, much as

0:05:40.000 --> 0:05:42.280
<v Speaker 1>Paramount has been a damaged company. That it has all

0:05:42.279 --> 0:05:44.920
<v Speaker 1>these cable networks that are shrinking. It has a very

0:05:44.960 --> 0:05:47.400
<v Speaker 1>large studio in Warner Brothers, but the business is really

0:05:47.440 --> 0:05:49.480
<v Speaker 1>about the cable networks. And if the cable networks keep

0:05:49.560 --> 0:05:51.680
<v Speaker 1>going into the crapper, then the stock price for the

0:05:51.680 --> 0:05:55.120
<v Speaker 1>company will too. And why pay twenty dollars a share

0:05:55.160 --> 0:05:56.840
<v Speaker 1>now and you can pay fifteen dollars a share in

0:05:56.839 --> 0:06:00.560
<v Speaker 1>a couple of years. The other argument for waiting is

0:06:01.120 --> 0:06:05.440
<v Speaker 1>he just got his arms around Paramount. Why not wait

0:06:05.520 --> 0:06:08.520
<v Speaker 1>and try to execute your strategy. A lot of these

0:06:08.520 --> 0:06:10.960
<v Speaker 1>big media deals have not worked out very well. You know,

0:06:11.000 --> 0:06:13.440
<v Speaker 1>this would be the third time that Warner Brothers Discovery

0:06:13.440 --> 0:06:16.080
<v Speaker 1>has been traded in the last ten years. And it's

0:06:16.120 --> 0:06:18.480
<v Speaker 1>got all these great assets. You know, Warner Brothers is

0:06:18.520 --> 0:06:21.719
<v Speaker 1>one of the great Hollywood studios. HBO is this amazing brand,

0:06:21.760 --> 0:06:24.920
<v Speaker 1>and yet the company keeps getting less valuable because these

0:06:24.960 --> 0:06:27.880
<v Speaker 1>deals tend to be huge distractions and they prevent the

0:06:27.920 --> 0:06:31.599
<v Speaker 1>buyer from thinking long term and executing against a real strategy.

0:06:33.320 --> 0:06:36.280
<v Speaker 2>Lucas says, there are also reasons why Ellison would want

0:06:36.279 --> 0:06:36.840
<v Speaker 2>to do a deal.

0:06:36.880 --> 0:06:37.120
<v Speaker 3>Now.

0:06:37.480 --> 0:06:39.960
<v Speaker 1>I think they are two big reasons, well maybe three.

0:06:40.080 --> 0:06:42.240
<v Speaker 1>One is, if you're already going to go through the

0:06:42.279 --> 0:06:46.080
<v Speaker 1>pain of integration with Paramount, why not just like try

0:06:46.080 --> 0:06:48.159
<v Speaker 1>to take your lumps all at the same time. The

0:06:48.200 --> 0:06:52.880
<v Speaker 1>other two would be to regulatory and competition. The Ellison

0:06:52.920 --> 0:06:57.000
<v Speaker 1>family has a very good relationship with President Trump. If

0:06:57.040 --> 0:06:59.120
<v Speaker 1>you're going to go for a big media merger, why

0:06:59.160 --> 0:07:00.920
<v Speaker 1>not try to do it a time where you have

0:07:01.279 --> 0:07:05.400
<v Speaker 1>a regulatory regime that favors you that ties into the

0:07:05.400 --> 0:07:08.880
<v Speaker 1>other one, which is competition. This current regulatory environment would

0:07:09.120 --> 0:07:12.960
<v Speaker 1>seemingly box out a lot of other potential buyers for

0:07:13.000 --> 0:07:16.000
<v Speaker 1>the asset. You know, Comcast has been floated a lot.

0:07:16.360 --> 0:07:19.480
<v Speaker 1>The Trump administration does not like Comcast and the Roberts

0:07:19.560 --> 0:07:22.320
<v Speaker 1>family that is kind of the biggest shareholder there. It

0:07:22.400 --> 0:07:26.840
<v Speaker 1>has frowned at certain big tech companies, and so I

0:07:26.840 --> 0:07:30.280
<v Speaker 1>think there's an opportunity to act now while you are

0:07:30.560 --> 0:07:34.400
<v Speaker 1>the one clear obvious buyer, as opposed to waiting and

0:07:34.640 --> 0:07:37.000
<v Speaker 1>risking there being more competition in the price going up.

0:07:39.040 --> 0:07:42.080
<v Speaker 2>You mentioned the Ellison family's closeness with Preston Trump and

0:07:42.080 --> 0:07:44.480
<v Speaker 2>with the Republican Party. You asked David Ellison about that

0:07:44.640 --> 0:07:46.720
<v Speaker 2>relationship on stage, and what did he tell you.

0:07:47.320 --> 0:07:50.200
<v Speaker 1>He said that his family has a very productive relationship

0:07:50.200 --> 0:07:53.160
<v Speaker 1>with the administration and not a ton beyond that.

0:07:53.400 --> 0:07:56.040
<v Speaker 2>Here's some of Lucas's conversation with Ellison at the screen

0:07:56.120 --> 0:07:57.520
<v Speaker 2>Time conference earlier this month.

0:07:58.160 --> 0:08:00.360
<v Speaker 1>I think I can to answer this one. Say to

0:08:00.400 --> 0:08:03.280
<v Speaker 1>people who seem who are concerned that there's just like

0:08:03.320 --> 0:08:07.280
<v Speaker 1>an Ellison slash Ellison Trump plot to just like corner

0:08:07.360 --> 0:08:13.680
<v Speaker 1>the media business. You've got Elon with Twitter. You know

0:08:13.720 --> 0:08:15.600
<v Speaker 1>they're they're no.

0:08:15.960 --> 0:08:17.640
<v Speaker 3>I know where you're going.

0:08:17.680 --> 0:08:18.400
<v Speaker 1>Look it's.

0:08:20.880 --> 0:08:24.080
<v Speaker 3>I'm on the headline him doing better. I can uh,

0:08:24.480 --> 0:08:31.080
<v Speaker 3>I can only speak to Look, I think I can

0:08:31.080 --> 0:08:33.560
<v Speaker 3>speak to my personal state of mind, right, is that fair?

0:08:33.600 --> 0:08:34.800
<v Speaker 1>Am? I am imitted to do that.

0:08:36.040 --> 0:08:39.880
<v Speaker 3>So what I can tell you is that conversation has

0:08:40.000 --> 0:08:44.240
<v Speaker 3>never once been discussed or or brought up. You know,

0:08:44.320 --> 0:08:48.120
<v Speaker 3>when we basically approach things, it is going back to

0:08:48.440 --> 0:08:51.600
<v Speaker 3>always how do we create basically value for shareholders?

0:08:52.400 --> 0:08:55.080
<v Speaker 1>I mean, he has tried to avoid talking about politics

0:08:55.160 --> 0:08:59.440
<v Speaker 1>too much. His talking point is their company is an

0:08:59.520 --> 0:09:02.240
<v Speaker 1>entertainment company first, and their job is to entertain the world,

0:09:02.400 --> 0:09:05.720
<v Speaker 1>and getting political kind of interferes with that. But he

0:09:05.800 --> 0:09:07.959
<v Speaker 1>can't disguise the fact that his dad has a good

0:09:08.000 --> 0:09:11.320
<v Speaker 1>relationship with this administration and it does work to their benefit.

0:09:11.720 --> 0:09:14.959
<v Speaker 2>In the context of news, what has he said about

0:09:15.080 --> 0:09:17.360
<v Speaker 2>editorial independence and how have we seen that play out

0:09:17.400 --> 0:09:20.400
<v Speaker 2>in actual fact now that he's he's in charge of

0:09:20.400 --> 0:09:22.120
<v Speaker 2>CBS News, Well.

0:09:22.240 --> 0:09:27.199
<v Speaker 1>He hasn't spoken that much about news other than he

0:09:27.280 --> 0:09:30.200
<v Speaker 1>did this big deal in buying the Free Press, which

0:09:30.280 --> 0:09:33.520
<v Speaker 1>was started by Barry Weiss, kind of a former opinion

0:09:33.720 --> 0:09:37.800
<v Speaker 1>writer at The New York Times, and he has talked

0:09:37.800 --> 0:09:41.720
<v Speaker 1>about it more as a business than in terms of

0:09:41.760 --> 0:09:46.359
<v Speaker 1>the output or the content. He would like to see

0:09:46.480 --> 0:09:50.280
<v Speaker 1>the news division modernized in terms of how it gathers

0:09:50.360 --> 0:09:52.440
<v Speaker 1>news and most importantly, I think in terms of how

0:09:52.440 --> 0:09:55.440
<v Speaker 1>it distributes it after the break.

0:09:55.600 --> 0:09:58.200
<v Speaker 2>What it would mean if Paramount sky Dance or another

0:09:58.240 --> 0:10:01.720
<v Speaker 2>big company buys Warner Brothers Discovery, how it could change

0:10:01.720 --> 0:10:05.480
<v Speaker 2>news gathering, sports coverage, and what gets made in Hollywood.

0:10:18.480 --> 0:10:21.199
<v Speaker 2>I asked Bloomberg's Lucas Shaw about how significant a deal

0:10:21.240 --> 0:10:24.280
<v Speaker 2>would be between Paramount sky Dance and Warner Brothers Discovery,

0:10:24.679 --> 0:10:27.920
<v Speaker 2>or between Netflix and Warner Brothers or Comcast and Warner Brothers.

0:10:28.200 --> 0:10:31.959
<v Speaker 2>Bloomberg reported Tuesday those two companies, Netflix and Comcast are

0:10:32.000 --> 0:10:33.200
<v Speaker 2>also interested.

0:10:32.760 --> 0:10:35.400
<v Speaker 1>In It would be seen as something like the Disney

0:10:35.400 --> 0:10:38.840
<v Speaker 1>Fox deal, where you'd have these two entertainment companies combining.

0:10:39.320 --> 0:10:42.560
<v Speaker 1>It would put a lot of cable networks under one roof.

0:10:42.840 --> 0:10:46.560
<v Speaker 1>But perhaps more importantly to producers and sellers in Hollywood,

0:10:46.800 --> 0:10:50.640
<v Speaker 1>it would combine two major streaming services, two major movie studios,

0:10:50.679 --> 0:10:54.560
<v Speaker 1>and two major television studios. And typically when assets like

0:10:54.600 --> 0:10:58.360
<v Speaker 1>that combine, they're not gonna make more, Right, Like if

0:10:58.360 --> 0:11:01.160
<v Speaker 1>one company makes twenty movie in one company makes twenty,

0:11:01.200 --> 0:11:03.440
<v Speaker 1>when they combined, they might make thirty, but they're not

0:11:03.480 --> 0:11:05.600
<v Speaker 1>going to take the forty they are making to fifty.

0:11:05.920 --> 0:11:08.720
<v Speaker 1>So there's a lot of concern that output will only

0:11:08.760 --> 0:11:12.760
<v Speaker 1>go down further, that job cuts will continue, and that

0:11:12.840 --> 0:11:14.600
<v Speaker 1>it will be a kind of a net bad for

0:11:14.679 --> 0:11:15.840
<v Speaker 1>the creative community.

0:11:15.960 --> 0:11:18.679
<v Speaker 2>If we were to get this giant media company of

0:11:18.760 --> 0:11:22.319
<v Speaker 2>paramounts Guidance and Warner Brothers Discovery, what does that mean

0:11:22.360 --> 0:11:25.800
<v Speaker 2>for me as a consumer of video content? What's going

0:11:25.880 --> 0:11:27.520
<v Speaker 2>to change if we have a company of that's scale

0:11:27.520 --> 0:11:28.600
<v Speaker 2>and size.

0:11:28.480 --> 0:11:32.080
<v Speaker 1>Well, the most likely outcome would be you'd have one

0:11:32.200 --> 0:11:35.320
<v Speaker 1>fewer streaming service to pay for, but the resulting streaming

0:11:35.360 --> 0:11:38.199
<v Speaker 1>service that you almost certainly want would be more expensive,

0:11:38.840 --> 0:11:41.360
<v Speaker 1>I'd say is the most likely outcome from that.

0:11:41.760 --> 0:11:45.559
<v Speaker 2>Incidentally, Disney announced it's raising streaming prices, and Warner Brothers

0:11:45.640 --> 0:11:48.640
<v Speaker 2>Discovery just increase the price of HBO Max this week.

0:11:49.320 --> 0:11:52.520
<v Speaker 2>Lucas says a deal involving Paramounts, Guidance and Warner Brothers

0:11:52.679 --> 0:11:56.120
<v Speaker 2>would have implications for the news organizations at those two companies.

0:11:56.520 --> 0:11:58.960
<v Speaker 1>It would put CBS News in CNN under the same

0:11:59.000 --> 0:12:01.320
<v Speaker 1>company and under the control of a family that I

0:12:01.320 --> 0:12:04.000
<v Speaker 1>think feels that both of them are a little too liberal,

0:12:04.559 --> 0:12:07.120
<v Speaker 1>and so it would likely change some of the news

0:12:07.240 --> 0:12:09.400
<v Speaker 1>put out there by both CBS News and CNN.

0:12:10.440 --> 0:12:13.440
<v Speaker 2>How is this deal being seen or talked about in Hollywood?

0:12:13.480 --> 0:12:15.720
<v Speaker 2>What would it mean for the film industry and for

0:12:15.720 --> 0:12:17.280
<v Speaker 2>the TV industry if this sort of go through.

0:12:17.720 --> 0:12:20.760
<v Speaker 1>People don't like it, I guess, is the simplest answer.

0:12:20.960 --> 0:12:23.600
<v Speaker 1>They were all very excited about David Elson buying Paramount,

0:12:23.600 --> 0:12:27.079
<v Speaker 1>and all very worried about him buying Warner Brothers Discovery,

0:12:27.120 --> 0:12:29.120
<v Speaker 1>but a lot of them see it as a FATA

0:12:29.200 --> 0:12:31.200
<v Speaker 1>complete and that there's not a lot they can do

0:12:31.240 --> 0:12:31.640
<v Speaker 1>about it.

0:12:31.880 --> 0:12:34.040
<v Speaker 2>And that's a fear of the size it would amass.

0:12:34.080 --> 0:12:35.719
<v Speaker 2>It the principally has to do with just how much

0:12:35.720 --> 0:12:37.000
<v Speaker 2>it would control how big it would be.

0:12:37.240 --> 0:12:39.760
<v Speaker 1>No a fear that another studio is going away, fear

0:12:39.800 --> 0:12:44.199
<v Speaker 1>that just more consolidation will mean more job losses, fewer buyers,

0:12:44.480 --> 0:12:47.920
<v Speaker 1>fewer projects being acquired. Nobody's I think, is worried about

0:12:47.920 --> 0:12:52.040
<v Speaker 1>like the scale, because even that combined company wouldn't be

0:12:52.080 --> 0:12:55.880
<v Speaker 1>bigger than Netflix or Disney or Apple or Amazon. It's

0:12:56.040 --> 0:12:58.959
<v Speaker 1>just that Hollywood has lived through two and a half

0:12:59.080 --> 0:13:02.080
<v Speaker 1>years of what's about like kind of constant bad news,

0:13:02.400 --> 0:13:05.000
<v Speaker 1>and this feels like it would just be more of

0:13:05.040 --> 0:13:07.280
<v Speaker 1>the same. I guess to them, it feels like a

0:13:07.320 --> 0:13:10.400
<v Speaker 1>shrinking industry. And even though if you look, if you

0:13:10.480 --> 0:13:13.000
<v Speaker 1>really zoom out, like there's a lot of discussion of

0:13:13.040 --> 0:13:14.920
<v Speaker 1>the loss of a studio. And what I have to

0:13:15.000 --> 0:13:17.640
<v Speaker 1>sometimes remind people is like, well, yes, you lost Fox,

0:13:18.360 --> 0:13:20.640
<v Speaker 1>and you may lose either Warner Brothers or Paramount, but

0:13:20.679 --> 0:13:25.319
<v Speaker 1>you gained Netflix, Amazon and Apple, and so the total

0:13:25.400 --> 0:13:29.000
<v Speaker 1>number of studios hasn't really shrunk. But that argument doesn't

0:13:29.000 --> 0:13:31.600
<v Speaker 1>work well with people who've seen, you know, their friends

0:13:32.000 --> 0:13:34.560
<v Speaker 1>lose jobs and seen overall output go down.

0:13:35.160 --> 0:13:37.400
<v Speaker 2>So you're going from having kind of four separate companies

0:13:37.400 --> 0:13:40.400
<v Speaker 2>coming together. Perhaps is as one what is the last

0:13:40.400 --> 0:13:42.520
<v Speaker 2>time in history you've had so much concentration in the

0:13:42.640 --> 0:13:44.800
<v Speaker 2>entertainment industries? Is this at all novel? Is it a

0:13:44.840 --> 0:13:46.679
<v Speaker 2>return to something we've seen before? So how do you

0:13:46.720 --> 0:13:49.320
<v Speaker 2>see this in kind of the sweep of entertainment history

0:13:49.480 --> 0:13:50.040
<v Speaker 2>in the US.

0:13:50.200 --> 0:13:55.120
<v Speaker 1>So there are more ways to inform and entertain yourself

0:13:55.240 --> 0:13:58.720
<v Speaker 1>than ever before. You know, you can go on YouTube

0:13:58.760 --> 0:14:02.920
<v Speaker 1>and TikTok and and Twitter and all these social media platforms.

0:14:02.920 --> 0:14:05.000
<v Speaker 1>You can go on any number of streaming services and

0:14:05.080 --> 0:14:09.880
<v Speaker 1>TV networks those god knows how many podcasts. But there

0:14:09.920 --> 0:14:14.360
<v Speaker 1>are also entertainment and media companies that own more assets

0:14:15.400 --> 0:14:19.080
<v Speaker 1>than anything that we've seen before. Right, But if you

0:14:19.120 --> 0:14:21.720
<v Speaker 1>add in streaming and you consider all TV viewing as

0:14:21.760 --> 0:14:25.520
<v Speaker 1>presently constructed, Paramount and Warner Brothers Discovery combined, what account

0:14:25.520 --> 0:14:28.280
<v Speaker 1>for less television viewing than YouTube? And that's just in

0:14:28.320 --> 0:14:31.880
<v Speaker 1>the US. YouTube is much much, much, much much bigger abroad,

0:14:32.440 --> 0:14:34.960
<v Speaker 1>So it's a big asset. But a lot of these

0:14:35.000 --> 0:14:39.520
<v Speaker 1>tech platforms like Google, Facebook, These companies still have way

0:14:39.520 --> 0:14:42.160
<v Speaker 1>more control than any of these other media companies that

0:14:42.240 --> 0:14:44.840
<v Speaker 1>we seem to be very worried about. Would a company

0:14:44.880 --> 0:14:48.720
<v Speaker 1>that has CBS and NBC have more control over what

0:14:48.760 --> 0:14:53.560
<v Speaker 1>people think than Alphabet, which owns Google and YouTube and

0:14:53.600 --> 0:14:57.520
<v Speaker 1>Google Maps, or than Meta which owns Instagram and Facebook

0:14:57.720 --> 0:14:58.520
<v Speaker 1>and WhatsApp?

0:14:59.040 --> 0:14:59.160
<v Speaker 2>Like?

0:14:59.160 --> 0:15:03.680
<v Speaker 1>Does Netflix have more control and power than CBS did

0:15:03.720 --> 0:15:06.720
<v Speaker 1>at its peak in the US? The answer is clearly no.

0:15:07.120 --> 0:15:10.120
<v Speaker 1>More people watched CBS every night than watch Netflix every

0:15:10.160 --> 0:15:14.760
<v Speaker 1>night by a lot. When you consider Netflix's global reach,

0:15:15.560 --> 0:15:19.000
<v Speaker 1>which CBS didn't have. Are more people watching Netflix on

0:15:19.080 --> 0:15:22.640
<v Speaker 1>any given night globally than watch CBS in the US.

0:15:23.120 --> 0:15:25.840
<v Speaker 1>That is more of an apples to apples comparison, but

0:15:25.920 --> 0:15:27.520
<v Speaker 1>it's a different type of influence.

0:15:30.120 --> 0:15:32.400
<v Speaker 2>Before I let him go, I asked Lucas what he

0:15:32.480 --> 0:15:35.760
<v Speaker 2>thinks isn't getting enough attention as this story develops, as

0:15:35.800 --> 0:15:37.840
<v Speaker 2>he and our colleagues report on the next steps for

0:15:37.880 --> 0:15:39.440
<v Speaker 2>Warner Brothers Discovery.

0:15:39.360 --> 0:15:42.120
<v Speaker 1>We're just in the very early stages of seeing what

0:15:42.200 --> 0:15:44.360
<v Speaker 1>David Elson plans to do with Paramount, and I'd have

0:15:44.440 --> 0:15:46.720
<v Speaker 1>a lot more thoughts about what that means for Warner

0:15:46.720 --> 0:15:50.120
<v Speaker 1>Brothers Discovery if I had a clearer handle on what's

0:15:50.120 --> 0:15:52.240
<v Speaker 1>happening with Paramount, because the first month or two has

0:15:52.280 --> 0:15:53.960
<v Speaker 1>been we're going to spend a lot of money to

0:15:54.000 --> 0:15:56.480
<v Speaker 1>show it's a new regime, right, and then the next

0:15:56.480 --> 0:15:57.760
<v Speaker 1>couple of months are going to be we're going to

0:15:57.840 --> 0:16:01.520
<v Speaker 1>fire a lot of people and restructure, and we'll have

0:16:01.600 --> 0:16:05.280
<v Speaker 1>a really clear feel for kind of what David Allison

0:16:05.400 --> 0:16:08.160
<v Speaker 1>as chairman CEO of a major media company looks like

0:16:08.320 --> 0:16:11.440
<v Speaker 1>after twelve to eighteen months. I think a lot of

0:16:11.480 --> 0:16:14.080
<v Speaker 1>Warner Brothers Discovery people feel like it can't be worse

0:16:14.120 --> 0:16:17.160
<v Speaker 1>than what they've been through. Like, while most of Hollywood

0:16:17.240 --> 0:16:19.200
<v Speaker 1>is against the deal, a lot of people who work

0:16:19.200 --> 0:16:21.880
<v Speaker 1>at Warner Brothers Discovery are pro even if they are

0:16:21.920 --> 0:16:24.400
<v Speaker 1>worried about losing their jobs. They didn't love being owned

0:16:24.400 --> 0:16:26.560
<v Speaker 1>by AT and T, they haven't loved being led by

0:16:26.640 --> 0:16:29.520
<v Speaker 1>David Zaslav and so if David Allison can be different,

0:16:30.160 --> 0:16:31.240
<v Speaker 1>you know, maybe that's better.

0:16:31.560 --> 0:16:33.160
<v Speaker 2>Do you have a sense from your reporting of what

0:16:33.200 --> 0:16:36.200
<v Speaker 2>would be palatable to the Warner Brothers Discovery boards they

0:16:36.200 --> 0:16:38.840
<v Speaker 2>rejected that initial offer. Are they simply looking for a

0:16:38.920 --> 0:16:41.800
<v Speaker 2>higher number here? What are they considering that might make

0:16:41.840 --> 0:16:42.960
<v Speaker 2>this something that could come together.

0:16:43.200 --> 0:16:45.440
<v Speaker 1>I think it really comes down to the number. It's

0:16:45.440 --> 0:16:48.240
<v Speaker 1>not like there's another, you know version. Maybe they want

0:16:48.280 --> 0:16:51.720
<v Speaker 1>certain assurances, but they will say we have a fiduciary

0:16:51.760 --> 0:16:55.240
<v Speaker 1>responsibility to shareholders. And I have been told that they

0:16:55.280 --> 0:17:00.280
<v Speaker 1>have a number at which they would say yes.

0:17:03.520 --> 0:17:06.000
<v Speaker 2>This is the Big Take from Bloomberg News. I'm David Gura.

0:17:06.320 --> 0:17:08.840
<v Speaker 2>To get more from The Big Take and unlimited access

0:17:08.880 --> 0:17:12.320
<v Speaker 2>to all of Bloomberg dot com, subscribe today at Bloomberg

0:17:12.359 --> 0:17:16.200
<v Speaker 2>dot com slash podcast offer. If you like this episode,

0:17:16.320 --> 0:17:18.439
<v Speaker 2>make sure to follow and review The Big Take wherever

0:17:18.440 --> 0:17:21.000
<v Speaker 2>you listen to podcasts. It helps people find the show.

0:17:21.480 --> 0:17:23.400
<v Speaker 2>Thanks for listening. We'll be back tomorrow