00:00After Paramount came out with its own hostile takeover offer yesterday,
00:04Netflix co-CEO Ted Serrano says he's not too worried.
00:08He spoke at the UBS Global Media and Communications Conference in New York yesterday.
00:11Just take a listen.
00:13Today's move was entirely expected.
00:15We have a deal done and we are incredibly happy with the deal.
00:20We think it's great for our shareholders.
00:21We think it's great for consumers.
00:23We think it's a great way to create and protect jobs in the entertainment industry.
00:27We're super confident we're going to get it across the line and finish.
00:30So we're excited.
00:32Let's bring in Bloomberg's Lucas Shaw, author of the Screen Time newsletter.
00:36Should he be as confident, Lucas?
00:38First of all, I love those old photos that you have of Ted back from I guess that's the release of Lillehammer.
00:45Of course, he's going to project confidence.
00:48He agreed to a deal and what Paramount is proposing at the moment is not different from what it proposed
00:54when it lost this auction last week, right?
00:56They're sticking with their $30 a share and their insistence is that the board just didn't take the time to really consider it
01:03and that if more shareholders hear their point of view that they will be swayed.
01:06I think if Paramount stays on that current course, Ted has reason to be pretty confident because he already won with that.
01:13The risk for Ted and for Netflix would be if Paramount comes back and offers even more money
01:18because then the board and the shareholders would likely think about opening it back up.
01:24Lucas, you've spoken at length and in some detail in the last year and two years with both Ted Sarandos and with David Ellison.
01:31The reporting overnight was really focused on the coalition that David Ellison has pulled together for the financing.
01:39And part of that includes people that have proximity to the administration.
01:44Jared Kushner and his private equity firm being the easiest example.
01:47Just reflect on what you know of both CEOs in the competition between them,
01:52but also David Ellison's ability here to manage that relationship with the White House if there is one.
01:59Right. Well, look, I think one of the reasons that Netflix prevailed in the initial auction
02:06was that you put Ted Sarandos in a room with the Warner Brothers Discovery Board and leadership
02:13and he is charming and charismatic and is generally very good in those situations.
02:19Right. It's one of the reasons that he is Netflix's primary person when it comes to, you know, wooing talent.
02:25David Ellison has a little bit less experience with that. Right.
02:27He's younger. He is he is very amiable, but he doesn't have he's not kind of like oozing the charm in the same way that Ted is.
02:34We've now entered a different phase of this, to your point, where a lot of it is more about who, you know,
02:39and their proximity to people in positions of power.
02:44That's an area where where Ted Sarandos is still very strong, but he comes from the generally from the Democratic side of the political aisle.
02:51And so Netflix is having to kind of find the people who can help them get in in the Trump administration.
02:56To your point, David Ellison, in part because of his his father, Larry, and then also the various financiers he has.
03:02He has a lot of different ways to access the president. Now, of course, all of this is moot or should be moot if if the board decides one way or the other.
03:11But, you know, times are different now, I guess.
03:14Times are different. But let's just go back to cold, hard cash here, because this really comes down to how much the investors are going to think the cable networks are worth.
03:24Right. That's a big part of it.
03:26Yeah. I mean, the the fundamental breakdown between what Paramount thinks of the state of play and what Warner Brothers Discovery thinks of the state of play is the value of the cable networks and the importance of cash.
03:38Paramount's bid is all cash. Netflix's bid is primarily cash, but not all cash.
03:43Paramount is valuing those cable networks at about a dollar a share.
03:46By that valuation, their bid is superior to Netflix.
03:49Warner Brothers Discovery is valuing it at three or four dollars a share, which and by that metric, Netflix is superior.
03:56That's why I think it's it's feels almost inevitable that Paramount, if it really wants it, will have to come over the top and just add, let's say, three dollars to its bid.
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