Rory O'Neill has the latest on what's happening with the Warner Brothers deal

Episode Transcript

Speaker 1 (00:00):
Well, big headlines. As we all know, Netflix is trying
to just take over everybody that's out there, launching all
kinds of series and movies and just wants to buy
up the world. So what's really going on with this
Netflix Warner deal? What does the President think about it?
He talked about it yesterday.

Speaker 2 (00:13):
I know what they're doing, but I have to see
I have to see what percentage of market they We
have to see the Netflix percentage of market, Paramount, the
percentage of Morning. I mean, none of them are particularly
great friends in mine. Yeah, I just I want to
do what's right, and so very important to do what's right.

Speaker 1 (00:32):
There you go join us, and not to talk a
little bit more about it. Our corresponding Row and Neill
been digging in a little bit on this one. So
you've got the Netflix situation with Warner Brothers, and all
of a sudden, well, who's coming through the bullpen out
in the left field. Oh my gosh, here comes Paramount
to the field. What the heck's going on?

Speaker 3 (00:48):
And they're offering a bit of a sweeter deal at
least that's their claim. And look on paper, it was
actually Paramount that started this that they started saying hey,
we'll buy you Warner Brothers Discovery. And it was Netflix
that swooped in with that eighty two billion dollar deal
that was announced on Friday, and al paramunt Plus is saying, hey, hey, hey,
wait a minute, now, let's run the numbers here, and

(01:08):
we're paying shareholders a few dollars more per share of
stock on a deal, which is why they're going appealing
straight to shareholders to try to get a paramount sale
for Warner Brothers Discovery rather than Netflix.

Speaker 1 (01:22):
Well, that is a bit of a hostile takeover, and
we'll talk more about what hostile takeovers mean. But first, Roy,
I got to tell you. If I'm the guy that's
selling and I hear comes somebody else with a little
bit more money offering stockholders the higher price on the shares,
does this change everything? First of all and shifting it
who might get it? But secondly, if that happens, it

(01:42):
seems to be a bit more of a I guess
monopoly than the first offer out there. And will that
be stopped?

Speaker 3 (01:49):
Well? Right, because you know, as publicly traded companies, these
CEOs and boards have responsibility to get the greater shareholder
value out to shareholders, which may mean going for this
Paramount offer. But boy, the devil is in the details,
in the way these things are structured, because some of
Warner Brothers Discovery WBD they call it is being spun

(02:11):
off or at least what was going to be, and
that may or may not be happening. So it's really
in how you value the company, which is some of
the differences we're seeing in the two proposals. Look, Paramount
will say Netflix is the eight hundred pound gorilla. You
let this deal move forward. They get to control HBO
Max and everything else. They're going to really almost shut
down any theater release, so you'll never be going to

(02:33):
a movie theater again. Don't make them the nine hundred
pound gorilla in this business. Why don't you let us,
Paramount and Warner Brothers, let us merge like number three
and five in the streaming business, we'll have about two
hundred million customers, sort of on par with Disney, and
that way you'll have a strong, two strong number twos
rather than one big nine hundred pound chief.

Speaker 1 (02:55):
Who in the government organizations oversees monopoly is that the
SEC or the FTC er both.

Speaker 3 (03:02):
Or yeah, and this would be the FTC the federal
Trade Commission. And what's interesting to look, there are a
lot of different hurdles here because then you get into
ownership groups and things like that. There are parts where
the FCC may get involved with television ownership. That's a
function here, So there are a lot of different moving parts.
Paramount will say, look by merging number three and five streamers,

(03:24):
that might be more agreeable to regulators. Also, one of
the things that may help is that Jared Kushner, the
President's son in law, is helping to finance the Paramount deal,
so he's in on this as well. So it's an
interesting set. And plus the Ellison family strong supporters of
the president, and if Leslie Stall and the sixty Minutes
and Marjorie Taylor Green is a factor that could come

(03:47):
into play when it comes to government regulators approving this
deal too.

Speaker 1 (03:50):
Yeah, no doubt about a lot of moving parts here.
A lot of big money people involved here in Donal
lift fruns, not forget Obama's big and heavy into Netflix
in the background on that one too. So what will happen,
We'll have to wait and see. Ron Neil, thank you
for the update. By the way, speaking of the hostile
bid on this coming from Paramount. Here's Fox Business host
Cheryl Cassoni explaining what that really means.

Speaker 4 (04:12):
So, here's what happens at a hostile takeover. You go
directly to the shareholders. That's what Paramount is doing. They're
taking it directly to the shareholder. If they can get
more than fifty percent of the company, of the shares
they're in control, they get it. But it's not just
David Ellison and de facto Larry Ellison behind all of this.
Paramount has by the way, they've made six takeover proposals

(04:34):
for Warner Brothers Discovery that's been turned down. Yeah, but
listen to this. They've got They're backed by the Ellison family,
which I mentioned, the sovereign wealth funds of Saldi Arabia
Abu Dhabi, Cutter Affinity Partners, which is Jared Kusher's private
equity firm. They're all in this Paramount offer. Yeah, okay, oh.

Speaker 1 (04:55):
My gosh, Well you got the Saudi's involved in this
whole thing too. I mean, who's not involved in this,
all these different people coming to the table. Who this
is going to be a juggernaut to deal with, right