Netflix Reportedly Weighing Bid for Warner Bros. Discovery

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00:00Do you feel like there's momentum here that Netflix is kind of moving towards a deal?

00:05You know, I think that it's a smart move for them to look at the books of Warner.

00:10They have they lose nothing by doing the due diligence and looking at Warner's business model.

00:15I think Wall Street would be supportive of Netflix using its very valuable equity to buy the studios.

00:22I do not think Wall Street would be amused if they tried to buy the linear TV networks.

00:26And I think that, you know, I think there's a disagreement within Netflix.

00:29You're right that when I last saw you, Greg Peters was like, hard.

00:32No, we don't want to look at these assets.

00:34Ted Sarando's body language on his earnings call was much more open, probably because he's the content guy.

00:39And Warner Brothers has some of the best IP in the deepest library of any studio.

00:44And once you own the IP, you never have to pay to rent it again.

00:47So it's really hard to keep creating brand new IP.

00:50You may as well get some that has an installed base of fandom from 50 the last 50 years.

00:55And Warner Brothers has some of the most next to the Walt Disney Company.

00:58So should Netflix do it?

01:01I think it depends on price.

01:03Because it is contentious within Wall Street, it depends on price.

01:06And I get the sense that Warner Brothers really wants to sell dear because they have this idea that if they split in half,

01:13they're going to get $26, $27 a share of total value.

01:16I don't believe that.

01:17But if they believe that, then that means that they're going to try to overcharge Netflix.

01:21And I will be I don't know that Wall Street that Netflix would be over to pay for the studio assets here.

01:28Who else?

01:29I mean, we've talked about Comcast.

01:31I mean, who else could be, you know, a really big competitor here for Warner Brothers?

01:36So I think, you know, my opinion is the way this plays out is everybody looks at the books.

01:43Everybody gets the inside scoop on what's happening at Warner Brothers, because why not?

01:47You're competing against them.

01:49And then the price and then they buy a try to buy a piece like Comcast tries to buy linear or Netflix tries to buy.

01:55And I'm not sure they are regulatively approvable, except for Larry Ellison, who is Donald Trump's goods friend.

02:02So I think all of this is in in the end, a way to get Larry Ellison, David Ellison, to get their price up to match whoever else is bidding.

02:13But I think that's Ellison's are the only ones that can get this to regulatory, in my opinion.

02:17What ends up happening to the linear stuff over at Warner Brothers?

02:21Well, Ellison has said he's willing to buy the whole thing.

02:23So that solves that.

02:24They just sell the whole thing.

02:25Because he can get regulatory approval.

02:28Oh, OK.

02:29God, it's fascinating.

02:31I think we'll have Laura back on before this.

02:33And still, like, our first question will be a month from now about this potential deal.

02:36I know.

02:37I know.

02:38Is there any pressure to get this thing done sooner rather than later?

02:42No.

02:42I mean, the CEO, Zaslav, is trying to make pressure because he's saying, oh, in April, we're going to split it in two pieces.

02:48But it's an arbitrary deadline.

02:49He can push that off to June or September.

02:51You know, I don't agree that the two pieces spun off alone will be worth $26 or $27.

02:59So, but that's his stocking horse is this artificial timing deadline he set.

03:04So, let's say Netflix doesn't get this.

03:07And I promise we're going to ask you about more stuff, Laura.

03:09But let's say Netflix doesn't get assets from Warner Brothers.

03:12What would be its next move in content IP?

03:16What should it do?

03:17So, what I think it's doing, interesting things with advertising, interesting things with video games.

03:22It's going into short form, which is smart.

03:24It's backing creators, which is smart influencers.

03:28It's moving into the YouTube businesses and, like, socially connected people.

03:32It's doing physical.

03:34You saw it's doing physical around K-pop.

03:37It's number one film of all time.

03:39Physical outlets, the way Disney does, but they're doing pop-ups.

03:42It's a much smaller, you know, a much smaller vision than the Disney vision of theme parks.

03:47So, they're doing a lot of things that are trying to maximize revenue from their IP.

03:52I would like to see them buy a library, but I don't want to see them overpay for a library.

03:57Okay, last one on Netflix.

03:58Announcing yesterday a 10-for-1 stock split.

04:01The split-adjusted basis trade is expected to begin on November 17th.

04:05Shares up 2.7% as we speak.

04:07I'm like a big, hey, this doesn't change the fundamentals of the stock.

04:09So, I have a hard time ever understanding.

04:12He poo-pooed it.

04:13Yeah, I do.

04:13Whenever a company does a stock split like this.

04:16Your thoughts on the stock split.

04:17Do you care?

04:18Oh, super smart.

04:19This is a retail company, and people should be able to give.

04:23You know, when I was a kid, at five years old, my grandmother always gave me five shares of the Walt Disney Company,

04:29which we should deliver in a frame, which are still on my walls, every birthday for five years,

04:34until I was 10 years old and wanted a different thing, dresses or something.

04:37So, they should be doing that with Netflix shares.

04:39And this should be accessible to the public that wants to be supportive in the capital markets,

04:44on a retail, like retail investors, of the fact they love Stranger Things.

04:48It's another way to sort of give a feedback loop to Netflix about the good work they're doing.

04:52So, I'm very supportive.

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