Warner Bros. Rejects Latest Paramount Bid

Bloomberg

Watch Warner Bros. Rejects Latest Paramount Bid - Bloomberg on Dailymotion

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00:00There's a lot in the sort of structure of the deal that the Warner Brothers Discovery Board

00:05points out. A lot of it has to do with the debt load of the Paramount deal. There's something

00:09interesting in it that I wanted to pick out, which is we don't agree how valuable cable networks are.

00:14So the street and the investors would say, actually, they're much more valuable than

00:18you're giving them credit for. Paramount Skydance would say in our $30 a share offer,

00:23we don't think they're valuable. Therefore, the $30 a share offer is a great premium because we

00:28want the whole thing. How do we value those networks? Gosh, was that a great question? I

00:33mean, it really is a difficult thing to manage at this moment. We're talking about a really big

00:37shift in the ecosystem, right? We've had these traditional channels around broadcast cable

00:41that have been almost cash cows for these businesses for a long time. Then the shift of

00:46streaming and the ability to build those businesses with lower margins, right? But now we're seeing

00:50with price increases, advertising dollars moving in, that it's actually a great value. And now a

00:56huge shift into this creator economy and thinking about short-term content. And then you have to

01:00evaluate those assets against those big shifts in the ecosystem. They still have value. They still

01:06spin off cash. They still can be the home for reach and advertising. But the real value has shifted.

01:12The advertising dollars have shifted in a new direction. Paul, I'm going to remind our audience

01:15of the state of play, because in a deal like this, you get some fatigue. But Netflix is basically saying,

01:20we want the streaming business and the studios. We'll spin out the legacy networks.

01:23Paramount Skydance wants the whole enchilada. In your mind, which result would make most sense

01:29for the consumer, you know, and what they would actually use those platforms for?

01:33Sure. Well, listen, I think that there's absolute value for the consumer and for the shareholders,

01:38most certainly in a Netflix, Warner Brothers combination, right? You have superior storytelling

01:43capabilities coming from the HBO Max and the Warner legacy in their entire library,

01:47coupled with what is superior tech. Netflix has led the industry in personalization,

01:53in driving new features, right, and algorithms. That combination is certainly unique. Now,

01:59does that mean that's the best consumer? I don't know. Does the storytelling capabilities that are

02:03combined with Paramount, coupled with Warner, deliver more value into the ecosystem in general

02:08and for consumers overall who get great enjoyment out of those stories? That's a difficult equation to

02:14value. But I can most certainly see there's value in the greatest tech and greatest storytellers coming

02:18together. Well, perhaps there isn't value for for consumers right now is three companies getting

02:22caught up in a lot of admin and fighting and regulatory discussions rather than focusing on the

02:27business and innovating. How much is that a risk? This I think this is the biggest risk of any big

02:31transaction in M&A activity, right? The focus becomes how do these companies potentially come

02:36together? Everybody internally thinks about what is my role in this transition? And no one's focused on

02:42the fact that they're competing with an ecosystem that is evolving around them, right? We saw that

02:46social media platforms are taking over not only viewership, but total ad dollars this year.

02:51There is a huge shift into the creator economy. And if you're just focused on how do we put these

02:56two companies together versus the competition that is outpacing you with TikTok and YouTube and others,

03:01you're going to be further behind by the time you complete this transaction. And we haven't even

03:05discussed AI yet. That's right. And you think about the big deal that was announced between Sora,

03:09so Disney and OpenAI at the tail end of last year. What is my viewing experience going to be like

03:15going forward when I turn on Disney Plus? What does it look like as a screen?

03:19So I think this is going to be the biggest piece of innovation we see in 2026. So AI for the last

03:25year has been about doing discrete projects. How do I create a vertical video? How do I think about

03:30leveraging it to help improve the algorithm? But what we've really got to be focusing on today,

03:36is how do we think about the entire ecosystem? I'm playing in multiple universes. What is that

03:41consumer experience like? I believe this year, instead of when you download the app and you hit

03:46a wall, it says pay now, you'll see in the future people pushing short form content as a way to

03:50discover, it's a way to engage consumers, a new way to engage a conversation. That data from there

03:56begins to inform how I get a cold start. So how do I, when I first go into that experience,

04:01how is it customized for me? How do I ensure that I'm going to be able to retain that consumer?

04:05Then all of those interactions over time also become part of this greater ecosystem that says,

04:10now I know what to serve you, how to engage you, how to retain you, and how to reach you on other

04:15platforms. And that's really when we begin to think about the value of what AI can deliver when

04:19it's managed as an ecosystem. We've talked a lot about chips and robots and consumer gadgets.

04:26I think it would be really helpful to give your kind of media and entertainment experience of what

04:30it's been like at CES. Very conscious, a lot of the advertisers are here, very conscious that

04:34actually the mode in which you consume that content is on display. What has it been like for you?

04:40Yes, for us, as discussed a little bit earlier, it used to be very discreet investments that we were

04:46seeing across the AI spectrum. I think today people are thinking about how do I look at AI as

04:50foundational to the way I operate with my technology and with my consumers. And that's the big shift, I

04:56think, in the mindset. And now they're coming to us and looking for solutions at scale at huge

05:00enterprise across multiple ecosystems. That's been the big shift for us.

05:04We probably should have done this at the start, for which I apologize, but just what is Quickplay?

05:08Yeah. Yeah. Give us the Quickplay sum.

05:10Absolutely. So we're at a company that basically builds out white label OTT services, so over-the-top

05:15television services, all the back end, everything from ingest to the time it ends up on your device.

05:19And where we have pivoted, right, is how to actually enable that through AI. How do you leverage those AI

05:24tools to ensure not only can I create short form out of long form, respond to social signals that

05:30are happening in the universe to be able to say, hey, there's a conversation happening around bad

05:34bunny appearing on SNL. How do we participate in that conversation with our content to drive new

05:40engagement, to drive new retention strategies, to drive new acquisition strategies? But we're also

05:45thinking about that entire data fabric to create those experiences that are hyper-personalized.

05:49askИk Russia—

05:58Raheem

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