00:00Caroline, I guess it's hard to interpret these earnings because everything could be different with these companies.
00:05I think what was solid and what they're showing is that with integration of Paramount and Skydance,
00:10with the new asset that they now own by David Ellison, he is managing to do more with less in
00:14terms of profitability.
00:16They smashed expectations in terms of how much they're bringing in in overall adjusted earnings.
00:21So that shows that even though revenue is on the downside,
00:24even though they're seeing all the myriad of issues that we continue to see batter cable,
00:28whether we see the concerns about what people are doing, going in and watching movies,
00:32he's still able to steer a ship that even with revenue crimping a bit,
00:35we're able to eke out more with every single dollar spent.
00:38That's going to be important if they're thinking about whacking on another great big amount of assets.
00:42And it's important also when we get the numbers out of Warner Brothers,
00:45where we see revenue decline, where we see profits decline.
00:48But putting two things together for many will make sense.
00:51They have the scale. They won't have to fight each other out in terms of ads.
00:55In fact, maybe they can then score more ad revenue coming in for the cable business,
00:58which I might add for Paramount, cable's the only bit making any profit.
01:02But both are showing growth in terms of subscribers to the streaming.
01:06So maybe that will show some resilience.
01:08So this was really a way in which they could convince investors
01:11that this will be good if we merge these two for Paramount Skydance.
01:15And Warner Brothers Discovery is saying, look, we're just going to do our fiduciary duty
01:18and what is best for the shareholders in terms of the competing bids.
01:21Because Netflix smashes them all in terms of revenue growth and earnings growth.
01:25Actually, I hear often, and just yesterday a CEO was telling me,
01:30for Paramount, Warner Brothers Discovery is a must-have.
01:35Like, they need this.
01:36And for Netflix, it's a nice-to-have.
01:39And clearly the shares in Netflix show that.
01:43But can they get this done?
01:46Who, Paramount Skydance?
01:47Paramount, yeah.
01:48It's certainly the fact that they've reopened negotiations,
01:51the fact that they're only going to give the likes of Netflix four days to respond on the upped deal,
01:55the fact that overall they've convinced the board, even though it was so combative.
02:00Do you remember the state?
02:01We stooped so low in terms of the aggression that was being seen,
02:05the fact that David Ellison was claiming that Warner Brothers Discovery wasn't taking them seriously,
02:08that they were favoring Netflix from the offing, this has been a war of words.
02:13The fact that they've now been able to come back to the table,
02:15convince them with a $31 per share offer, that maybe it's worth reconsidering,
02:20I think that shows just the real fierce commitment that David Ellison has.
02:24By the way, do you and Ed hear that, too, on Bloomberg Tech,
02:27that Paramount, that this is make or break, that they have to get Warner Brothers Discovery?
02:31I think that there's more onus, and there's more fight coming from the Ellison clan,
02:35is what we're hearing time and time again.
02:36And what's interesting on the flip side is, yes, look, we're about to have Laura Martin on the show.
02:40She has, for years, been saying consolidation is the only way forward in terms of media assets,
02:45because from Netflix's perspective, and what they want to convince everyone of,
02:49is that it's not just Netflix versus usual cable, usual subscribing networks and streaming.
02:56It's YouTube.
02:57It's the big tech.
02:59It's Amazon.
02:59These are the competitors of the future.
03:01You've got to have more cash on hands, and you've got to have an amazing array of content.
03:05And that's what David Ellison needs right now.
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