Bulwark Takes - Most CORRUPT Takeover Yet? Trump-Backed Paramount to Buy Warner Bros.

Episode Date: February 27, 2026

Sam Stein, JVL, Catherine Rampell, and Sonny Bunch respond to Paramount taking over Warner Bros. Discovery after Netflix walked away. The deal, still pending regulatory approvals, would put CNN, HBO, and CBS under one Trump-backed company.

Hey, everybody. It's me, Sam Stein, managing editor at the Bullwork. I'm joined by Sunny Bunch, Catherine Impel, and of course, JV Allen is pinball machine. We are here to talk about one of the more remarkable acquisitions, media acquisitions that I can ever recall following. It's not done yet. I just want people to understand. It's not done yet, but Paramount looks to be in a place where they are going to acquire Warner Brothers and all of its properties for a boatload of money. Sonny, who wrote about this for us on the substack page today. You'll be getting it in your inboxes later. You called it the most grotesque and un-American of transaction or acquisition processes that

you've seen. Why don't you just lay out what exactly happened, why we are in this place? Yeah, so the 30,000 foot view here is that for a while now, Paramount has been trying to buy Warner Brothers. They want to get access to the IP. They want to get access to the cable net. They want to consolidate and grow Paramount Plus. And so they offered a series of escalating bids.

And Netflix didn't bite. Or I'm sorry, Warner Brothers didn't bite. Warner Brothers didn't bite. And then Netflix kind of swooped in with a godfather deal of like, we will give you lots and lots of money. And you'll get to keep your cable nets to do whatever you want with. You can spend those off into a separate thing. Paramount, you know, came back with a couple of sweeteners that basically said,

we will be able to get this through the regulatory process. And this is where things start getting hinky because Paramount Skydance, which is backed by the Ellison family, basically said, hey, we are, we have good connections with the Trump folks. Believe it or not, we have really good connections there. And we can make sure this thing gets through. I don't know that Netflix can make sure this thing gets through. And so they threw a bunch of sweeteners into their deal into the most recent

and final, the bid that was finally accepted, they offered $31 a share, which is more than what the Netflix deal had been packaged at, very slightly more, like a dollar more a share than the Netflix deal had been packaged at. But what they also said was, if we don't pass regulatory muster, we will write you Warner Brothers Discovery a check for $7 billion. And on top of that, if it does eventually get, for every quarter that it goes beyond the end of September of this year, we will pay 25 cents per share penalty, a ticking fee, it's called, which amounted to another $650 million or something like that per quarter that they would pay as long as the regulatory process went on.

Boy, they seem really really confident there, Sonny. They seem very sure that they were going to be able to sneak this one by the regulators. And there's lots of, there's kind of a lot of interesting things going on here. Matt Stoller is written about who's very much at an antitrust. advocate he wants he wants very companies up very much very much probably undersells it he wants to break up he probably wants to break up the bulwark he's like we don't do you need

a bulwark with politics and cultural coverage I don't know but but he he he wants to he thinks these companies should be broken up and noted in in a piece on this that Paramount has is so far along in the process and they are offering an all cash offer which means theoretically it could be finalized in 15 days now the the Joe Jenkins the the The DOJ could still come in and say, hey, we're going to, we're going to look at this. The states have a role to play here. The states here, particularly the California Attorney General, has said, look, this obviously

matters a lot to California. These are, you know, two big California companies. So we're going to take a look at this. So we're not at the finish line yet. This is not a done deal. But the amount of money that Paramount was throwing around here as a guarantee of it being a done deal, suggest me that it's probably more or less a done deal. So let's linger for a second on the money, Catherine.

So obviously Larry Ellison, father of David Ellison, head of Oracle, is filthy, unfathomably rich. As evidence by this, yes. Yes, beyond comprehension. And I'm assuming this was a huge component of why Warner Brothers ultimately agreed to this. They just knew that Larry Ellison could backstop anything. And yet, there are other sources of revenue or money coming into this. deal, including foreign sources. So I would like to sort of understand who are the financial interests actually behind the

bid and how much are we actually talking about in terms of money exchanging hands? Yeah. So you have the sovereign wealth funds, I think of Saudi Arabia, Qatar, and UAE, I forget the third country, that are backing this. And of course. And we're cool with that. We're cool with that. I mean, we'll see if it gets through a Sipheus review.

I imagine under this administration, it won't be an issue, but you never know. Especially since, well, I mean, Jared Kushner is also getting lots of money from these sovereign world funds too. Yeah, they're, they've patted the pockets. Yeah. I mean, actually, as an aside, a lot of this transaction kind of reminds me of another famous or infamous Jared Kushner transaction because he's also. So, well, I was thinking about how he is responsible for what I think was at the time, the single biggest purchase of real estate in U.S. history, which was 666 Fifth Avenue, which was, yep, he threw a lot of money.

And I don't remember what the amount was, but it was a terrible investment. It was like, I want to say it was like in 2007. I don't remember the exact year, but it was like probably the worst time to buy is my vague recollection. And this is another like, you know, Phil son of a very wealthy guy who kind of failed upward. And I see some parallels here maybe with Paramount throwing a boatload of money at Warner Brothers Discovery, which has only been profitable like two quarter.

I looked at this out like two quarters since it existed going back to 2022. So they're throwing a lot of money at it in addition to the breakup fee and, you know, putting the bill for the breakup fee that goes into Netflix's pockets. So they're spending a lot of money on this. I think it is a little bit dubious as to like whether this is a good investment. When Netflix walked away, their stock price went up. Right. Yeah.

Let me ask JVL, let me ask you that. Because if you were just sort of looking at it from the outside, you'd say, well, why would you go to whatever the share price that they went to? What was it? Like 31 or 32 for a company that, as Catherine notes, is losing money and is sort of holding antiquated properties. And with a history of a very clear history that acquiring these types of movie studios does not always go well. I mean, what is the, so what is the case for Paramount here to make this extraordinary purchase? So you have to look at this deal on three different levels. There is the political level.

There is the business level. And then there is the monopoly level. And, you know, at the political level, this entire deal is about CNN, which is possibly the least financially important component of Warner Brothers Discovery. it's the only thing the president cares about. And the, you know, Netflix would have been happy to buy Warner's discovery and not take CNN. Just leave Sam. We won't even pay. That's what they were doing.

That's what they were doing. They wanted to split off the cable nets and just have, we want the studio and we want the IP. That's it. We want HBO Max. We do not want CNN or any of the other TNT, TBS. That's not our business. Right. The reason Trump favors the Ellison's in this deal is because of what they did to CBS news when they took over Paramount.

Which again, CBS News, not a vital component of the Paramount deal, but it was the important political component. Right. Because the president, like Victor Orban, wants his cronies to control the news media. So that's happening like underneath the subterranean level of this. At the business level, this doesn't make sense because of the amounts of debt involved. And I mean, I just want to read you a little bit of here. This is from, William Cohen over at Dry Powder, who had a conversation with Matt Bellany about this. So Paramount Skydance is already like heavily leveraged. They're coming in as a company with $10 billion in debt from the, uh, from acquiring Paramount when Skydance bought Paramount a few months ago. So a lot of leverage, like 3.3x leverage, I think. They're now paying $111 billion

for Warner Brothers Discovery. And Warner Brothers Discovery comes with itself a giant debt load from when Discovery bought Warner's now, what was this, Catherine, four years ago? Yeah, it was 2022. I think it's when it went through. Okay. And so their leverage is jumping up to like 7X, I think, or 6X. And so this is like a very strange deal, just a matter of finance.

It doesn't really make a lot of sense from that level. Where it makes sense is when you jump all the way up to the level of believing in winner-take-all economics and monopoly. And the Ellison's theory of the case is the streaming media is a winner-take-all sector. Right now, there are two people vying to own that crown. Those people are Netflix and Disney. We would like to be in that race. And so in order to be in that race, we need to have to have. have scale, scale here meaning total number of subscribers to a streaming service.

And so by purchasing Warner Brothers Discovery, adding that to Paramount Plus, we then are in the semifinals for the championship of streaming monopoly. And if we strike it big there, then there is a pot of gold at the end of that rainbow. So just take a huge load of debt. You have Larry Ellison, you have the sovereign wealth funds. You can eat it for a while. obviously they're going to cut incredible amounts. But ultimately, 10 years down the road, maybe you're the last streamer standing.

Okay. Yeah, actually, to put a dollar figure on those amounts from the same piece that JVL mentioned, I think it was Bill Cohen, who also noted that Paramount by its own emission is planning $6 billion in cost savings. Cost savings is euphemism for laying off a lot of people. and Netflix claimed that Paramount would actually require $16 billion in cuts to make the math work. And look, I agree with JVL that their logic may be at some price, it is worth it for them to be potentially a player in that streaming race, but not at any price. And so I still think that even if their bet is on, you know,

they want to be competing with the Disney's of the world, they still may have well overpaid. Yeah. Well, let me just back up for a second. I want to play this because the CNN component is going to lead to another element of this conversation. I want to play Trump in the White House from December. To JVille's point, this was, it wasn't like subtext.

This was the text for Trump. But let's play him talking about this merger as it relates to CNN. that the people that have run CNN into the ground, by the way, nobody watches, very few people watch. I don't think they should be entrusted with running CNN any longer. So I think any deal should it should be guaranteed and certain that CNN is part of it or sold separately. But I don't think the people that are running that company right now and running CNN, which is a very dishonest group of people, I don't think that should be allowed to continue.

you. I think CNN should be sold along with everything else. All right. So look, he's not hiding the ball there. But I also will just say, like, it's important to understand David Ellison is not also hiding the ball. He was Lindsay Graham's guest at the State of the Union. He's, you know, Larry Ellison's obviously quite close to this administration. And, you know, I will also say Trump really didn't like Netflix. Netflix either, in part because Susan Rice, the former Obama NSA, is on their board. Netflix officials were spotted at the White House yesterday meeting with Trump to talk about this potential acquisition.

And it was only after that meeting, like literally ours, that they announced they were not going to match Paramount's offer. So you have to infer from that that they were told by Trump, this ain't going to happen. Back to CNN. Okay. Can I also point out some of the history here, which is that Donald Trump made very similar comments back in his first term when CNN was also changing hands as part of the time the AT&T Time Warner merger. And I was at CNN at the time. I should disclose. I used to be a contributor at CNN. So Donald Trump made very similar comments, basically trying to block that merger. And ultimately,

the merging parties used it against the government. I mean, there might have been an argument for like, why on public interest grounds that merger should not have been allowed to go through. Not that was a huge success finally, but that, you know, it was maybe going to be bad for consumers. But Donald Trump, because he had made those comments, his DOJ had a much weaker case because the merging parties at the time were able to say, we think that this is just vindictive and this is not about public interest. And so the merger went through. Now we're sort of in the inverse universe where Trump obviously wants it to go through, but the states may intervene. We can talk about whether they have a case. We'll talk about that in a second. Quickly, Sunny,

and then to JVL. Sonny first. What are the other properties that matter materially here from the Warner Brothers. I know JVill said this is all about CNN. I would just add one little wrinkle, which I don't really think gets appreciated. HBO. Trump really hates Bill Maher, watches him religiously too. He does.

It tweets about it all the time. I don't think he's doing this to fuck with Bill Maher. But there are other elements of this portfolio that I think he does have interest in. But Sonny, unpack the portfolio here and maybe just add a little, sprinkle in a little bit of sort of prediction about, what you think is going to happen with some of them. Well, so Warner Brothers Discovery is three big things, really. It's HBO Max, which is a very, it's a relatively small, but very successful streaming company.

I mean, as far as these things go, I think it's only 1.3% of streaming, you know, viewing on TVs is HBO Max. So it's a relatively small, but it's still, it's still very, it punches above its weight, as they say. Right. And, you know, Paramount Plus has, Paramount Plus has actually done very well in, in relatively speaking. They have these hit shows like Landman and, you know, the Tulsa King, these things, the, the Yellowstone universe. But they don't have that prestige vertical, really. And that's what HBO would add to them. They would give them, you know, prestige and a different, different audience. They believe there's a lot, there's not an enormous amount of overlap there. They think that they're. going to be merging different audiences. The studios and the IP are the other, you know, kind of big element here, right? Paramount wants to get access to the DC universe. They want Batman and Superman. They want, they want to be able to do Harry Potter stuff, right? They have, like, they have a whole thing there that they, they want to do and, and use that to kind of build up their own streaming service. There's also the theatrical component here. If you look at, if you look

at the box office over the last 30 years, Paramount and Warner Brothers combined make up about 25% of the total domestic box office grows. And this is the best, this is honestly the best antitrust case that somebody is going to be able to make is to say these two companies would control such a large portion of the box office universe that if they either use that power to force theaters to try and take worse films, you know, do return to block booking, whatever, or, or if they were to reduce the theatrical output by 40%, which is basically what happened when Disney merged with 20th Century Fox. Disney merges with 20th century Fox,

and all of a sudden there are 40% fewer wide releases between those two studios. If you see something similar like that happen here, which you would have to. There's no there's no there's no there's a guarantee in this. Isn't there, Sunny? There's an Ellison guarantee that like, oh, we'll combine for 30 movies a year for X number,

of years, which is basically an assurance that they're going to cut it at the end of the guarantee. They are, they are currently saying, we are going to maintain a robust theatrical, blah, blah, they're, you know, they're very strong about this. But it's, it's all without, without like an actual regulatory guarantee, this is something the DOJ could do. The OJ could say, you have to release the same number, the same average number of movies that were released in the non-COVID years, whatever. Like, you could, you could do that. That's a thing that DOJ could do. I haven't seen anything that suggested DOJ wants to do that. And then the last piece, again, is the cable networks.

And, like, honestly, if Paramount just wanted CNN, they could have gotten it for much cheaper than what they paid for everything here. Right. They could have, they could have. This is, it's one of the fascinating wrinkles here. I don't think they care that much about CNN, but Donald Trump cares a lot about CNN. Right. So that, that's kind of the thing that made buying the whole company Paramount for Paramount. Like, they needed the whole thing.

They needed the whole package. Then they can go to Trump and be like, hey, we'll do what. All right. That sets this up perfectly. Javille, what happens to CNN from here? I mean, I assume that CNN will come under the control either formally or informally of Barry Weiss. Barry Weiss, who reportedly kissed Trump on the cheek when he showed up to be interviewed at CBS News a few weeks ago.

Barry Weiss, whose stewardship was lauded by Brendan Carr. It is weird that somebody who is fearless and committed to absolutely free speech turns out to be an absolute darling of the regime. If I was somebody who cared about being independent, that would make me a little nervous if the censorious regime, you know, under Brendan Carr started just talking about how great I was and what a great job by doing. I might do some self-interrogation there, maybe some reflection. But this is, you know, so CNN will, again, as Catherine said, they're going to have to do at least $6 billion in cuts.

One of the easy ways to do that is to start slashing redundancies. There are a lot of redundancies between CBS News and CNN. And they know that they have to make CNN make Trump happy the way they have with CBS News. And Trump has clearly been very happy with what has happened in CBS. news since January. Well, he's still threatening to sue CBS News periodically. Sure. Periodically, right.

Even that I'm not sufficiently happy. Yeah. But, you know, like Tony Dockville or whatever said that it was the greatest state of the union address ever and, you know, has done tributes to Marco Rubio. It's, it is beyond parody.

And so CNN's going to get gutted and is going to be turned. But this is like watching Hungary. Like, this You know, so we now, the Washington Post, the LA Times, CBS News, CNN, these places are all systematically being brought under control of cronies of the strongman. Well, not just news organizations. Don't forget TikTok.

TikTok is also owned by a consortium. Yep. So the Ellison's, the Ellisons will effectively have control over TikTok, which means younger, way younger people get their news, right? Gen Z gets their news. CNN. Twitter, right? Yep, yep.

It's funny. I was at a journalism conference or speech two weeks ago, and there's this sort of old retort comes out from one of the audience members about, you know, isn't the media, you know, the liberal bias of the media, isn't that a real problem? And I was just looking, I was like, look at who controls all the major properties. It's like, this is not, I think people are,

dealing with an antiquated system. Sure, maybe way back and not way back the name, not so long ago, there was a real liberal protest problem, but effectively some of the biggest media properties in this country are all controlled by Trump allies or people who want to ingratiate themselves with Trump. A bunch of people in the comments section have been asking this, and this is my favorite part of this discussion. I'll start with Himal Ganger, sorry if I mispronounces. How healthy is Netflix's fiscal position? So this opens up, a type of conversation that I want to start with, Catherine, if you want to take this. The sort of conventionalism has come out that Netflix actually is better off.

I mean, the stock prices, that one of you guys said is up. They get that $2.9 billion breakup fee, although we don't know how much of that's going to lawyers. And they're not saddled with this big company. They did try to buy it. So how do you view the way that Netflix comes out of this? It seems like there, well, as you point out, the markets believe that Netflix is better off. Again, these assets may have been worth something, are worth something at some price, but not at any price. And it looks like it was probably a good idea for Netflix to walk away, given how markets have reacted.

I don't know that we even talked about the fact that Ted Sarandas met with the president yesterday. We mentioned that, yeah, briefly. Okay, sorry. So he was clearly convinced by something or other that this was not going to be a good deal, either because the president was going to block it or because even if the president let it go through, it might not have been worthwhile at that price. I think one interesting question is what do they do with their new windfall from that breakup fee? And I know we were talking online and talking on Slack beforehand.

Well, it's a fun parlor game, right? Yeah. You got you have two billion to spend. What do you do? Three. I mean, maybe you throw like a, I'm putting 900 million, 900 million for the lawyers. Let's just say. Give it.

Maybe you throw a big party. I don't know. That could be fun. But probably you spend it on on gobbling up what you hope is some of CBS's core business, which would be maybe sports streaming rights for various things. That would probably be a good investment. It's hard to imagine. Let's play this game.

Sunny, you're running Netflix now. They've just decided, you know what? We want that guy. We want that guy to run. We're going to appoint you to be our head of acquisitions. Sonny turns the whole network over to Whit Stillman. We got a lot of metropolitan content coming. We got some exact same exacter movies in the works.

It's great. And also, yeah, a bunch of new Superman runoffs. $2.5 billion at your disposal. Have that it. it work what do you do i the if you well it depends on what they want to do here right do they want to try to pursue the path of revenge which is you know it's dicey but if you if if they wanted to like kind of subtly stick the knife in it wouldn't be subtle at all you would just go after nfl rights and netflix has the money to go after nfl rights they they the thing about cbs are

they available nfl rights well no i mean they get they come up for bidding every two years out every two years five 10 years i think we're going to Somebody should in fact check me on that. Don't take that to the bank. I think CBS has their rights through 2031 or something like that, 2032. But it's about, it's about $1.8 billion a year, I believe, for Sunday games and, you know, some playoff games. The Super Bowl's its own, its own thing. But, you know, if you are, if you are Netflix and you are trying to find ways to

increase your audience, that is, that's, that's a, that's a good way to do it. And it's a good way to keep people for a long period of time. You know, the NFL season is four months long. That's longer than their shows run. You know, the shows, they debut them and then it's, you know, they're, they dump them all at once and they're, they're over. So I would go, I mean, if I were them, I would go after sports rights. I would go after the NFL. I would go after March Madness. I would go after the Masters. And like, the Masters has a very long relationship with CBS. I don't know that that's really in play, but it theoretically, it could be thrown off money at anyone. The, the after that, I think Netflix is kind of the big winner here because they are not taking

on an enormous amount of debt. And for a while, at least Paramount will be kind of paralyzed by regulatory stuff. There will be, there will be a pause in what they're doing. People will be hesitant to sign deals with them because they won't be sure, you know, is, is everything going to be running smoothly here? What's going on? Who's going to be in charge of what? That's the other thing is that there will be redundancies.

People will get fired. People get laid off. and you don't you don't want to go start a relationship with a place only to have that person leave. And they've already had some defections. I mean, Taylor Sheridan, who has like really built the Paramount Plus network up from nothing. Like he is the their star there announced last year, late last year that he was out. He's, he's going elsewhere. And that's a, you know, that is a problem for them.

They brought some other people and they brought the stranger things guys in, you know. So I don't know. It's going to be, it's going to be interesting. interesting to see. But if you have, again, if you have all of this money and Netflix has a lot of money, I mean, this is the thing. This is, this is why people were so confused by this deal. Netflix has never done something like this. They've never taken on an enormous amount of debt to buy a big company. They have never wanted to be in the theatrical business. They, they have a very kind of specific thing, and they're very good at it. They generate an enormous amount of revenue,

and they spend an enormous amount of money on new content. And I think, you know, if, If you are them, you now have one fewer buyer in the market. Warner Brothers and HBO is out. So prices are going to come down for things. And you have, in the Hollywood community, you have a Trump card, so to speak. You say, look, we said, we said we're not going to do business that's good for Trump. We're not going to fire Susan Rice. We're not going to bend the knee.

We are going to, we're just going to do our business. And, you know, Hollywood is. That matters, I imagine. It's a city of, I mean, look, it's a city of progressive people. They look at it and they're happy. No, I know. I know. I mean, just on the other hand.

Ah, okay. On the other hand, I mean, they may have angered Trump enough that like he'll remember. I don't know. He may move on to something completely different tomorrow. But to the extent that he can weaponize government against them still, not for M&A purposes, but for something else, he may very well do so. like, you know, they've pissed him off in the process, but hopefully, if they're lucky, he'll move on to something else. It would certainly be in character. The thing that a lot of people

are talking about, which is like, can I just pause this, Sam? Yeah, sure. We live in a world now where it is totally unremarkable for everybody to assume, well, this private company angered the president, so he may try to fuck over their business. Like, that is, you might as well be in China or Russia or something and, you know, let alone the fact that this entire deal, the free market got short-circuited by the President of the United States who clearly came in and had a preferred buyer. I don't know. Do we ever have to sit and listen to Republicans say, oh, socialism, more, I'm darny bad again. Do we have to do we have to put up with that again? You do not. No, you do not have to put up with it. Two things can be bad at the same time. But the, but the, but I bet this.

This is the big, this is the big takeaway from this, right? Is that you, you cannot, you cannot run an economy by the whims of a mad king who will use the levers of government to punish your business. That's a terrible way to run a country. It's a terrible way to run an economy. I like you just, that, that doesn't work. And we're all going to suffer for it. I was just, you don't, you don't think we're going to get. You don't think we're going to get great works of art as a result of this, Sonny.

I mean, we might get rush hour four. So. I. Let's not. Let's not. Let's not. Wait, so who's the famous Trump painter, the one who depicts all the very, like, realistic scenes, but it's just maga folks, you know? Oh, gosh, who is that guy?

Jamma, something or whatever. Or I will just say two things. John McDonnell. Yes, thank you. Two things. One is, it is remarkable. I think it's important that we do linger on what JVL said, how much we're just basically like, oh, yeah, we have to, Trump could take his anger out on a company, or like, basically

we do business based on whims of Trump. I will note, Zoroam Dani goes to the White House yesterday and brings out a laminated version of an old daily news cover, but made modern to say Trump's a builder. And it's like, yeah, that's how you're going to unleash a bunch of him. He's like trying to get $12 billion for housing. And like, that's all it takes is you've got to make a laminated fake daily news cover. I will also say one of the things that's been widely speculated about what Netflix should do with their money, which I think probably. is a dumb idea, but I would welcome it as a member of this industry is take it and just build a version of 60 minutes and lure all the 60 minutes talent away from CBS.

And you know what? While you're at it, makes CNN, but make it on Netflix. And I just, that strikes me as stupid for Netflix. Well, yeah, I mean, maybe there's some prestige there, but those are money. There's a reason why Netflix didn't want to buy. Yeah, I was going to say, you didn't want to buy CNN to begin with. Don't build a version. I mean, this is, if I could just sort of take the Netflix side of this for a minute.

Sure. I mean, so the Netflix argument, right? I mean, there was a not unreasonable antitrust argument to be made about Netflix buying Warner Bros. Discovery. Yeah, sure. And which was Netflix is far and away the leader in the streaming service wars. And if they add these assets to it, their lead grows. Right.

Not crazy. Netflix's answer to that was, we are not actually competing with Paramount Plus and Disney Plus. We're competing with TikTok and YouTube. Yeah. And that, I mean, that is the real reason why Netflix would not spend this money recreating 60 minutes or some news division, right? But they are in a platform competition, not a media competition. And their platform has to be built, happens to be built around media at this moment.

Do you buy that, though, JV? Like, are they compete? You think they're competing with TikTok? Yes. Yes. I mean, maybe I'm wrong about this. I say this very confidently, but I could be wrong about it. But I think absolutely their competition is YouTube.

Well, this is, Ted Sarandos has been saying this. Ted Sarandos has been saying this. I mean, he was on Matt Bellany's show, The Town. Great podcast. Everybody should listen to it. But he was like, anytime I talk about this, I mention YouTube. And people say, oh, you can't talk about YouTube. That's not the same thing.

We are competing directly with YouTube. YouTube has a higher. share of television viewing than Netflix says. That's more people more people watch television content. People don't understand how unbelievably

powerful YouTube is. It's this weird hidden. It's like the 800 pound gorilla that happens to be invisible. And it's the dark matter of the streaming social. Yeah. It's the most important social network. It's also the most important streaming network.

It maybe is the most important. Anyone who works in politics. Anyone who works in politics. who works in actual election politics understands this. I remember talking to someone on a super PAC during the 2024 campaign. And they showed me data that almost blew my mind, but something like 40% of people were getting their content on YouTube. It's an extraordinarily large figure. We are streaming, I should say. It depends what you mean by content. Yes, exactly. It depends what you mean by content, right? Like it's everything on YouTube. It's how to fix your doorknob and not just

Yeah, yeah, yeah. News and politics related. Well, that's why I was curious if we really do believe Netflix is competing with YouTube. And I guess, yes, it is. Yes, because I mean, Netflix famously said that they compete with sleep. Yeah. It's true. But YouTube, YouTube has an enormous advantage here, too, because they are not paying for this content.

Like, they are, they, it's free. No, YouTube isn't paying us to live stream here. We get a cut of ad revenue. We get, you know, some subscription money or whatever. But, like, you know, it's not like YouTube is sitting down and writing, I don't, unless somebody at the bulwark is cashing my YouTube checks. I have been, yes. Sorry. But no, like that, that is YouTube's big advantage. They have a ton of eyeballs.

They have a ton of eyeballs across all platforms, TV, phone, laptop. I would assume more so on phone and laptop than, you know, than anywhere else. But even on TV, they are the biggest individual streaming channel. and they don't pay for these things. They're free. They're just there that other people put up there. It's like winning the lottery if you're a tech company. Yeah.

I will also point out that this is going to be a complication for the states that are signaling that they plan to challenge this merger. Can you explain? So there have been some singles including from the, this has been a question for a lot of people. So like, for instance, Shawnee P says, isn't there a monopoly law? I guess I need to research more. Others have been asking, is this a fait accompli? The AG of the state of California has said, he's going to look at this. He's going to scrutinize this.

This is not a then the other. It's pretty explicit about that. So, Catherine, like, what are the options here for people who are worried or who want to hold this up? Is this a fait accompli? It's not. But my understanding is that the federal antitrust authorities, which are the FTC and the DOJ, although they kind of split up, which industries, they oversee. They have a lot more, a lot more kinds of authorities and objectives that they can

draw on to try to block a merger. It's not strictly about like our prices going up. They can also talk about, you know, is it within the public interest? Is there viewpoint diversity? Which is a thing that intermittently we care about, particularly when Stephen Colbert is hosting a Democratic primary candidate. in Texas. Anyway, so they are, they do oversee these other kinds of authorities. The law is much broader. My understanding is that at this state level, generally the states have a much narrower set of constraints under which they can challenge a merger. And I don't know what the law is per se in California, but they would have to prove that as I understand it, this is going to raise costs or reduce variety or something else that drips down to consumer welfare measured in some

way. And that's going to be a much harder thing for them to prove because of all of the factors we've just brought up, including that this is a really fragmented media space. They're competing not just with other streaming companies. They're competing with YouTube. They're competing with TikTok. And how do you define the market? I think it's going to be really. really challenging. Do we even really care that much about theatrical releases anymore as its own thing? What are the confines? He's going to come through the camera at you. Oh, my gosh. Is your cortisol spiking? Cortisol spike. I just got framed mug. You got totally framed mugged by Catherine.

Yeah. No, the theatrical thing is really interesting because, again, this is like the best case you could make for a concentration of power. But it's also arguably, you could be. make a pretty compelling case that it's better for consumers for theaters not to be there, frankly. It's cheaper to stream things on VOD. It is, it's easier to get to. So I, you know, I don't know. It's, uh, you can see the tweet from Rob Banta right there. This is the AG of California. Paramount Warner Brothers is not a done deal. These two Hollywood Titans have not cleared regulatory scrutiny. California Department of Justice has an open investigation. We intend to be vigorous in our review. So there is that hurdle. And then the Europeans, I guess, have to

have some saying this. I don't know why we listen to the Europeans about that, but whatever. They actually, antitrust law in the EU is actually much broader than it is here and they take into account, they're more likely to take into account things like, how does it affect the workforce

and not just like how does it redound to consumers? So I guess it's possible that the EU could be a bigger obstacle. I think ultimately this thing is going to go through, but it may be very costly, as I think.

Well, isn't there? And now, I guess the question also is, we'll go through and how long will it take, right? So, Sonny, how long did, how long do these normally take and how long do you expect this one to take? Again, it depends, it depends on, it depends on who is mad at what, right? The Warner Brothers discovery, I'm sorry, the Warner Brothers AT&T deal, the Time Warner, AT&T deal that we discussed before, took almost two years because Donald Trump was dead set on holding it up because he hated CNN. And again, like CNN is a tiny part of that. that was, what, a $100 million deal? Like CNN is nothing of that. And he and he spent two years fighting that. And eventually, as Catherine said, the courts were like, this is obviously a personal

vendetta. You have to stop. This is fine. This deal's going through. If there isn't that, if there isn't that, and if there isn't a serious challenge in the EU, which, you know, there were some rumblings. Netflix was trying to make the argument that you will get the regulatory approval here, but you're not going to get it in Europe where they hate Donald Trump. They don't like Donald Trump. And if you're seen cozying up to Donald Trump, it's going to be a problem. It could take a while. I have a hard time seeing it not go through, though, just because again, certainly in the United States.

Because again, the thing that people look at in the United States is cost to consumers. And I do not think that this will necessarily lead to a big cost increase to consumers. All right. I'm going to close it up by kicking it to JVL. here for final thoughts. I will just note, sometimes it's kind of like hard to fathom just the sheer amount of money that we're talking about here. I mean, we mentioned a few figures, the $2.9 or $2.8 billion breakup fee.

But Warner Brothers CEO, David Zaslov, is going to gain more than $500 million. Close to $600 million. Just from the deal. Okay. Just from the deal. That's on top of like the hundreds of millions. of dollars he's made in compensation over the last six years, you know, for really his stellar stewardship.

For losing money. You know what? He's going to go down as one of the most successful media execs of the current era, despite having lost money under his stewardship at Warner Brothers Discovery. Would you say they only made money two quarters? Yeah, they made money like two quarters. And yet, he has been a masterful dealmaker. Just so people understand, the company loses money, the CEO is getting a $600 million payoff for the sale of a company that the purchaser is going to have to go into some serious debt to purchase.

In addition to paying a $7 billion regulatory breakup fee, I mean, it's like silly stuff happening here where money's just exchanging hands and the actual value proposition, the actual value of these companies, we don't even know. They could be negatives. Anyways, JVL, button it up for us, please. That is, he's handing that to JVL on a platter. JVL, does capitalism work? So here's the thing.

I mean, two cheers, as Irving Crystal once wrote, two cheers for capitalism. The problem, I mean, there are many problems with capitalism, one of which is that market distortions wind up,

and externalities create market distortions, which give you capitalist result. but that don't make sense and that don't have a lot of logic to them. One of the biggest market distortions you can have is a federal government, which decides to insert itself in the workings of the broader economy. And that is what has happened here. So how does David Zazlav go from the purchase of Warner Brothers originally? And so the merging of Warner Brothers Discovery is he purchased it from AOL.

that was a terrible deal. His combined companies were saddled with tremendous debt. His stewardship of those companies went very badly, as Catherine said, unprofitable for all but two quarters. The entire thing is rescued, and Zazlov goes from goat to hero, only because the president of the United States gets involved, and one of the buyers is a motivated buyer who is there motivated by his kinship with the president. And so you wind up with this deal that only kind of makes sense because of the politics of it. It doesn't make sense on the finances of it. And you see this sort of stuff happening all over the place.

The TikTok sale is insane, right? You know, we had a law which was simply defied for like a good year and nobody bothered to try to enforce it. And then when TikTok was eventually sold, it was sold at an enormous discount, something like 80% off. because it was being sold to friends of the president. And I struggle with understanding whether we should call this socialism or whether we should call it like command capitalism or command economy. But the end of the day, it isn't really different than what the Chinese Communist Party does. In China, there are private companies who do their own thing and they have a simulacrum of a free market,

except that everybody understands that at the end of the day, the federal government can tell anybody what to do at any moment and you have to do it. Otherwise, you disappear like Jack Ma. And we're not quite there yet, but that is kind of the way the American economy is heading. And we have seen over the last year the way in which this turns out not to bother American businesses. You would have thought, like confronting American businesses with the possibility, of this reality in 2022 would have made them freak out and say, no, no, no, we want a free market.

But turns out they don't because they all understand that they can get along. They can figure out how to, you know, like Tim Cook, they show up to the White House with gold apples and stuff like that. And they think they can get along. They think that he's transactional enough. And they'll be the exception that finds the way to manipulate him. And it doesn't always work out that way. And that is a problem.

And I would just close by saying that this is a problem which we have seen in societies which make the transition to authoritarianism over and over again, which is the business class always thinks that they don't need the freedom stuff, that they can gain the system. And so they usually go along with the authoritarian's in the opening movements of it. And that, folks, is why you should support independent media like the bulwark. Become a paid subscriber. Subscribe to our YouTube feed. I will close by saying this. We just want to wrap for people who have not. We're joining late.

We've been talking for about 45 minutes now about the purchase or the impending purchase, I should say, Paramount's impending purchase of Warner Brothers, the Ellison family, which is now probably one of the big titans of media, the biggest perhaps, next to the Murdox maybe, is going to get a much larger portfolio that includes H. B, CNN, and a whole host of movie properties. And they did it because Donald Trump greased the wheels, really, for them. And that's just the world we live in. Sonny, JVL, Catherine, thank you for doing this.

For those who have been watching this entire time, I said a little tongue-in-cheek, but I do mean it. Your support to us in these moments and in these times really matters. And independent outlets like ours are trying to do a lot of the work, that is being lost by these consolidations and by Trump sycophans taking over these properties. So any support you can give us is greatly appreciated. We love you for it. We love our community.

Have a great day, guys.