00:00It feels almost a little quiet today after last week's actions and felt like nonstop activity around Warner Brothers Discovery.
00:08What's the latest? What's new?
00:10Well, you can be assured it's going to get a little louder later in the week.
00:14So today, Netflix comes out and, you know, is trying to reassure both employees and Hollywood about their intentions.
00:20They're still going to release the Warner Brothers movies in theaters.
00:23And they're saying basically to their employees, don't worry, you know, we don't have a studio like Warner Brothers.
00:28And so that, you know, we're not going to be firing people in mass like, say, Paramount might.
00:33That was the implication there.
00:35But Paramount has reiterated its offers.
00:39Warner Brothers has 10 days as of last Monday to respond.
00:43So everyone anticipates, including Paramount, Warner Brothers to come out and say, we're sticking with Netflix,
00:49in which case they'll all be back in Paramount's camp to increase their offer more to try to lower Warner Brothers away from Netflix.
00:56Chris, I'm going to ask you a very general question.
00:58And, you know, it's going to require you to paint with somewhat of a broad brush.
01:01But in general, how does Hollywood view Netflix?
01:06And is there a suitor for Warner Brothers Discovery that, in general, people in Hollywood would rather have?
01:13Not another suitor.
01:15No.
01:15I think generally Hollywood would be fine with Warner Brothers continuing to remain an independent studio.
01:21And there wouldn't be all those mass firings and changes in strategy.
01:25The so-called synergies that we've heard about.
01:28Yeah.
01:28I mean, Paramount has said the number could be six billion.
01:31Now, a lot of that's likely coming from the cable networks that Paramount's acquiring Warner Brothers.
01:35But still a staggering number, twice what Netflix is projecting.
01:40So, yeah, I think Hollywood in general would prefer, you know, another studio hiring them and greenlighting new movies and all of that thing, rather than Netflix or Paramount.
01:52All right.
01:53So, is this it?
01:54Is there anybody else who could come in?
01:56Is there any other configurations that we might get out over this?
01:58Because I don't know.
02:00What do you think about Capital or Amazon?
02:01You know, I spoke to Mario Gavelli last week.
02:04He still held out hope that Amazon or Apple would come in and make a giant bid at some point.
02:09Well done.
02:09But, yeah.
02:10Yeah.
02:11Not Bob Iger or anything?
02:14Definitely not Disney.
02:15Okay.
02:16Would it fit with those more tech-focused companies, Chris?
02:19Or would it have an easier regulatory path?
02:22Really hard to say.
02:25You know, there certainly would be pushback at about, you know, big tech company increasing its strength in any way.
02:32But neither of those companies, Apple or Amazon, has a studio like Warner Brothers, this beautiful lot in Burbank.
02:39And so, you know, you could argue that it would be a good fit for one of them.
02:44Hey, the Paramount deal, though, all the financing is there for it.
02:47I mean, we've been talking about the hit that Oracle has taken and what that does to the wealth of Larry Ellison, right, who was supposedly backstopping it.
02:56So is there any concern that if, indeed, Paramount, Skydance is the winning bid, that everything's there?
03:02There is concern.
03:03We've been hearing from the Warner Brothers' side that that was one of the issues with rejecting Paramount, that they didn't feel the money was there.
03:08And, of course, Paramount is saying the opposite.
03:11They've fully backstopped by the Ellison family.
03:15How badly does Netflix want this?
03:19Well, that's a question a lot of people have been asking.
03:21But I think you have to take the letter today from the co-CEOs at face value and they're still in the game.
03:27It's because shareholders haven't been that supportive of Netflix's bid.
03:31I mean, we've seen shares down significantly since Netflix got in on this bidding process, Chris.
03:36Like, they're not convinced that this is necessarily a good fit.
03:40Absolutely.
03:41I mean, they've lost tens of billions of dollars of market value in it.
03:45And the closer Netflix gets to doing a deal, the more the stock seems to fall.
03:50You know, if you look at the track record, I've sort of joked that Warner Brothers is like the King Tut's tomb of movie studios.
03:57Anybody that acquires it is cursed.
03:59And from AOL to AT&T to Discovery, those mergers haven't worked.
04:06So there's certainly reason and concern for either bidder.
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