00:00Lucas, Warner Brothers coming out saying that the Paramount offer is, quote, a superior proposal.
00:05What do we need to know?
00:07Well, Paramount's in the driver's seat now, right?
00:09This has been Netflix's deal.
00:11Warner Brothers agreed to do a deal with Netflix in early December.
00:14Paramount has been trying to change that for the last two-plus months.
00:19You know, they've submitted new proposals.
00:20They've revised them.
00:21They've tried to address Warner Brothers' concerns.
00:23They've been rejected again and again.
00:25But this is the first time where the board has said, okay, now you've done it.
00:27Your deal is better, and Netflix has four days to respond.
00:31I mean, do we have any sense?
00:32I mean, I know there was reporting today that Ted Sarandos was supposed to be meeting at the White House.
00:36But when you look at the market speculation right now, it seems to be folks starting to pivot a little
00:41bit more to the idea that Netflix may actually lose out.
00:45Well, look, Netflix shareholders have been against this deal.
00:48While the leadership of the company has insisted that's not the case, they don't like uncertainty,
00:53it's been pretty clear from stock reactions when various news shareholders are worried both about Netflix doing this deal at
01:00all
01:00and how much they're going to spend on Warner Brothers' discovery.
01:03The question is whether the leadership at Netflix responds to that or if they still feel that the deal is
01:09in the company's best interest.
01:10To your point and what you just said, Ted Sarandos is in D.C. right now.
01:13I think he's stress testing a little bit how much of a regulatory problem they would have if they increased
01:18their offer.
01:19I just want to be clear, though, too, about this.
01:21I mean, just because the deal is deemed superior doesn't necessarily mean shareholders are going to take it.
01:25Ultimately, they will be the arbiters.
01:27And the idea that the board is still saying to a certain extent, I think in their words, they, quote,
01:31favor the Netflix transaction.
01:34Can we read anything into that?
01:36Well, to the first point you made, I think it's highly unlikely that shareholders would vote against either of these
01:42deals.
01:43Considering where Warner Brothers' stock was trading less than a year ago or kind of before this whole pursuit began,
01:49this is a huge win for all of them, whether they get the Netflix deal or the Paramount deal.
01:53I think shareholders are a little split over kind of which of them they prefer.
01:58Paramount offers a little more certainty because Paramount's buying the whole company,
02:01whereas Netflix is only buying a couple of the divisions.
02:04And I think there's a belief that Paramount has a better chance of getting this through regulators,
02:08whether that's based in law or not.
02:10That's just the perception.
02:12You know, there's been a theory that the board prefers Netflix, but that has not borne out.
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