I wasn’t bowled over by the idea of Netflix ownership but a merge of Paramount and Warner seems way, way worse. In a sane political situation this would raise huge antitrust concerns but… well, here we are I guess.
If it does go through I wonder if there’s a scenario where it still works out for Netflix: they could pick up assets at bargain prices when the merged studios inevitably sell and lay off everything they can.
$2.8B! Which isn't huge next to Netflix's market value of $357B... but when you compare it with its $45B 2025 yearly revenue, it's at least a noticeable bump. You could make almost 4 five-season-long Stranger Things with it.
Netflix is going to buy them both for the same price in about 5 years. Paramount is a highly leveraged company. They are not going to come out of this very expensive acquisition unscathed.
I'm hope not, and that they'll instead spin out WB, for it to be gobbled up again. Anything done three times is tradition, and breaking it just wouldn't do.
Interesting perspective, here, from someone who has observed a tiny bit of unknown streaming history.
So, way back in the day, 2005, Turner Broadcast corp. launched this weird-ass thing, known as GameTap https://en.wikipedia.org/wiki/GameTap . It was a subscription-based service that offered on-demand retro videogames. While it started as a way to play MAME Pac-Man and Metal Slug legally from a legit service, it grew into a competitor in the online games market arena in a time when Steam was still nascent.
The whole thing was created by this amazing fellow named Blake Lewin. Blake was really sharp, and having built this on-demand, streaming emulation service, he even went on to add at-the-time-modern games. Now, this stuff literally just installed the game on your HD and let you play, so it wasn't quite Stadia or Luma, but it was absolutely ahead of its time, and it was really slick.
I was a journalist then, and while games journalists get pampered, Turner moving into games was on another level. They launched this thing at the Armani Store on Market St. in SF, and when you walked in, they asked you to pick some sun-glasses from the case to take with you when you left.
GameTap was great and even gathered a following, but from the moment it launched, I knew what it really was: Turner's scientific experiment to build the infrastructure to later allow it to stream its enormous library of content. Movies, cartooons, TV shows, etc.
I was having lunch with Blake, a few years into GameTap, and I asked him point blank how the video streaming prototypes were coming (pure guess, no evidence). He was baffled and wanted to know how I knew they were working on that. Said it had been going great!
But in the end, the service never launched, AFAIK. Maybe some remnant is still there somewhere, but it just shows, you can be years ahead in your planning and development, and still end up alone at the end dance. It's a shame. Turner has so many great things in their library, why is it not possible for me to just pay someone for access to all the old movies in the TCM vault!?
Yea Paramounts behavior doesn’t seem rational if the direct economics of the companies involved were the only concern.
But given that Paramount wanted to buy the CNN portion of the business that Netflix wasn’t even bidding on, it kinda seems like they have a longer term goal in place.
Sure, I'd be willing to walk away with a briefcase holding $2.8 Billion with a B. How much stock would that buy back? Doubtful shareholders see any dividends from it.
Well, hope you enjoyed Pax Americana. We're heading into something that feels... about halfway between reich-y and soviet-y, at least on the propaganda front. Which is deeply ironic, of course.
Paramount's financing package combines roughly $45–46 billion in equity with more than $57 billion in debt.
The deal values Warner Bros. Discovery at around $111 billion ($31 per share), and including WBD's existing debt, the total takeover comes to more than $110 billion. NBC News
It would be the largest leveraged buyout (LBO) in history, with $87 billion of total pro forma gross debt and an estimated gross leverage of approximately 7x 2026 EBITDA before synergies.
My question is: who is lending the money for these leveraged buyout deals? They seem to leave the lenders holding the bag at some point when it all implodes. Do these deals really pay off often enough to be worth financing them?
> who is lending the money for these leveraged buyout deals? They seem to leave the lenders holding the bag at some point when it all implodes. Do these deals really pay off often enough to be worth financing them?
For this deal, it is:
- ~$57b Debt financing: Bank of America, Citigroup, Apollo
- ~$46b Equity backing: Ellison's dad, RedBird Capital Partners
- Sovereign wealth funds on the equity side: Saudi Arabia, Qatar, and Abu Dhabi
So NF is just not matching or exceeding an elevated Paramount offer... But could WBD still choose the already on the table NF deal at the end of the day? I guess with the sort of statement that Netflix made though, it's likely WBD would not and realizes NF is just done at this point. Or maybe it's some sort of double bluff by NF? Hard to really know for sure.
It would not be in WBD shareholders interest to walk away from Paramount's overpayment. It is a great deal for WBD shareholders, but a poor financial outcome for Paramount. Netflix's discipline is noteworthy.
Paramount has a lot of problems right now, financially. Maybe Netflix plans to buy them both in the next few years after those issues come home to roost for Paramount.
Like many things, phone OS, desktop OS, CPUs, GPUs, ride sharing, credit card payments, video game consoles, we are heading towards a Disney/Paramount duopoly
I wasn’t bowled over by the idea of Netflix ownership but a merge of Paramount and Warner seems way, way worse. In a sane political situation this would raise huge antitrust concerns but… well, here we are I guess.
If it does go through I wonder if there’s a scenario where it still works out for Netflix: they could pick up assets at bargain prices when the merged studios inevitably sell and lay off everything they can.
State AGs play a role in anti trust enforcement. So it’s not over yet.
When has a state AG successfully cancelled a merger? Did any state try to prevent Microsoft and Activision's merger?
Kroger/Albertsons Merger (2024-2025), JetBlue/Spirit Merger (2024), Visa/Plaid Merger (2021), "Capture-and-Kill" Ski Resort Acquisition (2021-2022), Hospital Mergers (Various 2024) are a few.
IIRC these also involved the Feds.
When Feds are not involved, its harder for State AGs to win. Not impossible. And they can slow things down / get concessions.
This means Netflix still has all that cash they were planning to spend on WB, plus the 2.5B breakup fee from WB.
They could arguably just build a better WB from scratch with that kind of money.
Or just buy Paramount in a couple of years.
$2.8B! Which isn't huge next to Netflix's market value of $357B... but when you compare it with its $45B 2025 yearly revenue, it's at least a noticeable bump. You could make almost 4 five-season-long Stranger Things with it.
It's WB's back catalog that is the main prize.
They've spent many multiples of that on their throwaway binge content but that doesn't get them to something as culturally valuable as WB.
Netflix is going to buy them both for the same price in about 5 years. Paramount is a highly leveraged company. They are not going to come out of this very expensive acquisition unscathed.
I'm hope not, and that they'll instead spin out WB, for it to be gobbled up again. Anything done three times is tradition, and breaking it just wouldn't do.
As long as they get to keep a media alt-right afloat in politics, it doesn't matter their value.
The Ellisons have zero liquidity issues. Theyll sell off parts to cut costs but no chance they sell the stuff they actually want
I would not bet against RedBird and Ellisons.
One must.
Interesting perspective, here, from someone who has observed a tiny bit of unknown streaming history.
So, way back in the day, 2005, Turner Broadcast corp. launched this weird-ass thing, known as GameTap https://en.wikipedia.org/wiki/GameTap . It was a subscription-based service that offered on-demand retro videogames. While it started as a way to play MAME Pac-Man and Metal Slug legally from a legit service, it grew into a competitor in the online games market arena in a time when Steam was still nascent.
The whole thing was created by this amazing fellow named Blake Lewin. Blake was really sharp, and having built this on-demand, streaming emulation service, he even went on to add at-the-time-modern games. Now, this stuff literally just installed the game on your HD and let you play, so it wasn't quite Stadia or Luma, but it was absolutely ahead of its time, and it was really slick.
I was a journalist then, and while games journalists get pampered, Turner moving into games was on another level. They launched this thing at the Armani Store on Market St. in SF, and when you walked in, they asked you to pick some sun-glasses from the case to take with you when you left.
GameTap was great and even gathered a following, but from the moment it launched, I knew what it really was: Turner's scientific experiment to build the infrastructure to later allow it to stream its enormous library of content. Movies, cartooons, TV shows, etc.
I was having lunch with Blake, a few years into GameTap, and I asked him point blank how the video streaming prototypes were coming (pure guess, no evidence). He was baffled and wanted to know how I knew they were working on that. Said it had been going great!
But in the end, the service never launched, AFAIK. Maybe some remnant is still there somewhere, but it just shows, you can be years ahead in your planning and development, and still end up alone at the end dance. It's a shame. Turner has so many great things in their library, why is it not possible for me to just pay someone for access to all the old movies in the TCM vault!?
CNN; Midterms
Well, Netflix did succeed at making the Ellisons pay a large fortune for something that costs a small fortune.
waits 20 minutes, cool, interest just covered whatever that extra was
Netflix so far has been the only consistent winning team in the streaming competition.
It is pretty clear that Trump wanted Paramount to win so it is smart for them to cut their losses.
Now they can control millennial and younger minds by controlling what CNN broadcasts.
…young people don’t watch CNN.
Young people are more into TikTok than CNN, and the Ellisons already control that in the U.S.
I feel like you're posting some humorous sarcasm and are being misunderstood.
Nobody watches CNN
Paramount agreed to pay the $2.8 billion breakup fee that WBD would owe Netflix if that deal didn’t go through.
The behavior of each party in this whole process gives you a lot more confidence in Netflix leadership than Paramount / Skydance.
Paramount was about to go to idiotic lengths to get this. Netflix is willing to walk away.
Yea Paramounts behavior doesn’t seem rational if the direct economics of the companies involved were the only concern.
But given that Paramount wanted to buy the CNN portion of the business that Netflix wasn’t even bidding on, it kinda seems like they have a longer term goal in place.
Sure, I'd be willing to walk away with a briefcase holding $2.8 Billion with a B. How much stock would that buy back? Doubtful shareholders see any dividends from it.
Share price of Netflix jumped 10% after the news broke. Pretty sure shareholders will see a lot of upside.
Unfortunately Paramount will retain HBO, and auction off Discovery, which no one wants anyway.
Well, hope you enjoyed Pax Americana. We're heading into something that feels... about halfway between reich-y and soviet-y, at least on the propaganda front. Which is deeply ironic, of course.
Paramount's financing package combines roughly $45–46 billion in equity with more than $57 billion in debt.
The deal values Warner Bros. Discovery at around $111 billion ($31 per share), and including WBD's existing debt, the total takeover comes to more than $110 billion. NBC News
It would be the largest leveraged buyout (LBO) in history, with $87 billion of total pro forma gross debt and an estimated gross leverage of approximately 7x 2026 EBITDA before synergies.
Seems like a poor decision driven by ego.
My question is: who is lending the money for these leveraged buyout deals? They seem to leave the lenders holding the bag at some point when it all implodes. Do these deals really pay off often enough to be worth financing them?
> who is lending the money for these leveraged buyout deals? They seem to leave the lenders holding the bag at some point when it all implodes. Do these deals really pay off often enough to be worth financing them?
For this deal, it is:
- ~$57b Debt financing: Bank of America, Citigroup, Apollo
- ~$46b Equity backing: Ellison's dad, RedBird Capital Partners
- Sovereign wealth funds on the equity side: Saudi Arabia, Qatar, and Abu Dhabi
So NF is just not matching or exceeding an elevated Paramount offer... But could WBD still choose the already on the table NF deal at the end of the day? I guess with the sort of statement that Netflix made though, it's likely WBD would not and realizes NF is just done at this point. Or maybe it's some sort of double bluff by NF? Hard to really know for sure.
It would not be in WBD shareholders interest to walk away from Paramount's overpayment. It is a great deal for WBD shareholders, but a poor financial outcome for Paramount. Netflix's discipline is noteworthy.
Maybe running up the price was part of the point.
Paramount has a lot of problems right now, financially. Maybe Netflix plans to buy them both in the next few years after those issues come home to roost for Paramount.
Based on past owners of Warner Brothers, seems fairly likely in a few years. The value will be 1/10 of what it is today.
And when there is a different US administration.
RIP Superman
"Truth, Justice, and the American Way" aren't dead yet.
Are you sure?
Like many things, phone OS, desktop OS, CPUs, GPUs, ride sharing, credit card payments, video game consoles, we are heading towards a Disney/Paramount duopoly
> we are heading towards a Disney/Paramount duopoly
Duopoly over what? Worldwide video entertainment?
paramount will disintegrate in due time.
Easiest $2.8 billion made in history?
AT&T had to pay $4B for failure to acquire T-Mobile. T-Mobile used that money quite wisely.