00:00it's a good thing that warner brothers discovery is being sold and that's absolutely right i mean
00:03you look at the tv networks division uh this has been the problematic division for all of
00:08these media companies tv networks ebitda slumped something like 27 in the fourth quarter you look
00:16at the whole of 2025 you know ebitda for that segment is down 21 and the writing is on the
00:22wall
00:22i mean this is why this company is is up for sale it's very clear um and you know i
00:27think really
00:28what what everybody is going to be worried about is what is the outlook should the spin happen should
00:34discovery global be spun out into a separate company what really is the outlook for the tv network
00:39business um and again we saw kind of very similar results with paramount as well yes they're making
00:45you know the best of what they can but again the fundamentals themselves are pretty weak across the
00:50board management also flagged a multi-billion dollar efficiency program how should investors
00:55think about the trade-offs between short-term cost and long-term profitability for these initiatives
01:01yeah this is what we've always been worried about i mean we've seen you know the story play out
01:05multiple times isabel in all of these media companies and yes there's always synergies and
01:09there's always efficiencies to be extracted but it does come at the expense of long-term growth we've
01:14seen that with warner brothers discovery you know they they came out with very aggressive synergy targets
01:19uh and yes they were able to deliver on a lot of those but then it did kind of hamper
01:24their growth
01:25prospects especially you know in the tv networks business where we've seen a significant deterioration
01:31in the fundamentals in the outlook so that is always there's you know it's a very very tricky
01:36balancing act there's a very you know uh they have to walk this really this tightrope um again the
01:43whole deal with warner brothers discovery for paramount is predicated on something like about
01:49six to eight billion dollars in synergies so you know we'll we'll see how all of that plays out but
01:55yeah it's it's going to be a tough road ahead uh regardless of whether they win or or they don't
02:00what is the update on the deal mechanics uh geetha where are we right now yeah so it was really
02:06interesting paul so in in paramount's uh earnings release yesterday they said that you know there's a
02:12good chance of the paramount 31 uh per share offer for all of warner brothers discovery being deemed
02:18a superior proposal uh and we've seen kind of paramount rally a little bit on that we've also
02:23seen actually netflix rally on that i think investors have are becoming more and more comfortable
02:29with netflix kind of walking away from this deal so again a lot to play out here but there hasn't
02:34been
02:35any official word just yet from the warner brothers discovery board about whether you know the
02:40paramount proposal is in fact superior it seems like it's still a story that we're going to be
02:45following closely paramount also offered modest revenue growth targets for 2026 what key drivers
02:51do you think will determine whether the company meets that outlook or exceeds that outlook or even
02:56surprise investors perhaps i mean so the the organic growth outlook is about uh yes they're trying to
03:04do their best remember they they did you know this is uh this is also a merged company paramount you
03:09know they they just recently acquired skydance uh so they're trying to do the best with you know the
03:14those new film assets but again you know if you just kind of look at it across the board uh
03:19you know
03:20in the context of the entire media landscape it's still a very very subscale company uh whether we're
03:25looking at streaming numbers you know about 80 million subscribers versus almost 320 330 million for for
03:32netflix or whether you're looking at the film business or even the tv business everything is
03:37fairly subscale so they definitely need some kind of an m a strategy obviously warner would be perfect
03:42if it happens uh if it doesn't we'll have to wait and watch uh but you know they're doing their
03:47best
03:47that they can from an organic growth perspective i just don't think it's going to be enough
03:52do you think netflix will walk away that would be pretty bold
03:59they should um you know collect they should collect that collected to almost three billion
04:04dollars in termination fee i mean this is really i mean you know you think about this paul in the
04:09long term yes it's a great asset to have there's no doubt about it but there's it also comes with
04:14tremendous amount of risk not to mention the biggest one being regulatory so that's going to be a
04:17big big overhang uh you know for the next 12 to 18 months and then of course after that you
04:22have
04:22integration execution risks so it's it's by no means is it going to be you know a rosy path ahead
04:28um i i actually think netflix will be better off on its own
Comments