00:00So what is the thesis of Warner Brothers Discovery as why the $30 Paramount is not living up to what's been offered elsewhere?
00:07So what Warner Brothers is saying is they reviewed the Paramount $30 a share offer.
00:13It's the same offer that Paramount had offered them two weeks ago when the board already deliberated and decided to go with Netflix.
00:20And in some ways they're saying this offer, the tender offer, is worse than what was initially offered.
00:24The logic is they don't view it as certain as the deal they already have signed with Netflix.
00:30And part of that has to do with the fact that Paramount has lined up, okay, $54 billion of debt, but they also are going to need $40 billion of equity.
00:38And as detailed in this 100-page filing that came out today, Warner Brothers' board says that they tried multiple times to get the Ellisons to make basically a personal commitment,
00:49personally backstop the equity commitment.
00:52But they, so Warner Brothers said, refused to do that.
00:56They're using a revocable trust to backstop the commitment, which Warner Brothers says is risky.
01:01You know, assets could be moved in and out of it.
01:04What they want is something that looks a little bit more like what Elon Musk did in the Twitter deal,
01:08which, if you remember, helped Twitter close that deal when Musk tried to back out of it.
01:12I mean, fascinating that everywhere in our show it's questioning of Larry Ellison's financing for various things at the moment,
01:20whether it's his son's bid for Warner Brothers' discovery or whether it's his financing for future Oracle data center leases.
01:27It's interesting, though, also that others have been pulling back on the potential financing.
01:31Talk to us about what's happening with Jared Kushner's affinity.
01:34So yesterday we reported that Jared Kushner's affinity was pulling out of the equity commitment or the backing of the Paramount bid.
01:41And this kind of underscored some of the concern that the Warner Brothers board has around where all the equity is coming from,
01:47because Paramount has said that it's lined up, you know, sovereign wealth funds across the Middle East,
01:51as well as affinity, as well as others to back the funding.
01:54And if those are falling through, what does that mean?
01:57It's also interesting because Kushner's involvement there had been seen as maybe something that would help Paramount clinch this
02:04if, you know, he is the ally to Trump that Paramount needs to get this through regulators.
02:10Without him there, I mean, it remains to be seen what that means.
02:13Warner Brothers has said that actually they view both the Paramount deal and the Netflix deal as on equal footing from a regulatory perspective.
02:20They say both can get through and we don't see any, you know, marginal risk or difference between the two of them.
02:27And so it's kind of a moot point, I guess.
02:30And so it's kind of a moot point, I guess.
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