Morning Brew Daily - Paramount-Warner Bros. Discovery FINALLY Complete & Is Midcentury Modern Cringe?
Episode Date: October 6, 2026#948: Skydance’s mega merger of Paramount and Warner Bros. Discovery is finally complete as it names its leadership team. The EV industry gets a lifeline as sales tick back up thanks to rising gas p...rices. Spain and Brazil are caught in tension-filled elections. Midcentury modern designs are so not cool anymore, apparently. Finally, Sam Altman thinks the bad stuff from AI is kinda inherent and we just need to go along with it. Learn more at https://intuit.com/ERP Vote for MBD at the Signal Awards! https://vote.signalaward.com/PublicVoting?utm_campaign=signa5_entrant_finalistnotification_092926&utm_medium=email&utm_source=cio#/2026/shows/genre/business Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here: https://www.swap.fm/l/mbd-note Learn more about your ad choices. Visit megaphone.fm/adchoices
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Good morning for Daily Show.
I'm Neil Fryman.
And I'm Toby Howell.
Today, how Paramount Steel for Wonderbush?
brothers will reshape Hollywood.
Then the war in Iran is bad for gas prices, but great for EV sales.
It's Tuesday, October 6th.
Let's ride.
In one of the world's greatest rivalries, the tables appear to be turning.
Cats are becoming more popular than dogs.
According to the research firm Package Facts, for the first time on record,
there are more U.S. households that own kittens than puppies.
Back in 2014, there were 1.8 households with a young dog for every household with a
a young cat. Last year, it was 0.94 to 1. It's not that kitty ownership has surged, though,
but more that people are going dog-free. The number of American households with dogs has fallen
5% since 2019 as cat ownership has been stable, to which I say, great, more animals that will
ignore me. So that's the shot. Here's the chaser. A new study also found that countries with
more cats are happier. So all these cats are making people pretty jolly. However, while reading about
the positive effects of cats, so I was surprised to learn about.
a negative one. The Washington Post wrote,
companion animals like cats and dogs are generally positive for well-being,
but with cats, there is a downside. They carry the parasite,
toxoplasma, Gandhi, which can affect humans and has been linked to
road rage, depression, and other mood changes. Is this well-known
amongst cat owners? I had never heard of this. Snuggling your cat can potentially give you
a parasite. Again, the data from 93 countries found that there was a net positive
association, but did not know about this potential danger. Maybe another
thing in the dog owner's corner that made swing the pendulum back that way. I asked a dog owner
whether they would consider getting a cat and they were like, nope, he's in the house. It's different.
Well, yeah. That was the only, it was like that was the bottom line. I think that was just, that was the
deal breaker right there. But it seems like more people are opting for kitties over puppies.
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Three years ago, David Ellison was known as a Nepo Baby movie producer
who achieved a modicum of success with Top Gun Maverick.
Today, Holby coordinated as the Prince of Hollywood,
when Paramount closes its deal for Wonder Brothers Discovery
in the industry's biggest M&A deal of all time,
$11 billion.
dollars. The combined company, known as Skydance, offers Legacy Entertainment's last best shot off
off a tech sector that's encroached on its turf. As co-ceo of Skydance, Ellison will lord over two
major movie studios, two major streaming services, HBO Max and Paramount Plus, a group of cable
channels, two influential news operations, CNN and CBS, and IP, including the DC superhero
universe, Harry Potter, Yellowstone, and Nickelodeon. It caps a stunning rise for Ellison,
who has reversed Pac-Man his way to the top through ever bigger.
acquisitions. First, he bought the larger paramount for $8 billion last year. Then he outmaneuvered
Netflix to gobble up an even bigger monster Warner Brothers Discovery. But at what cost?
$111 billion is far more than Ellison has in the bank account and to cinch the deal, he's
taken out loans and getting help from Dad. Oracles Larry Ellison, one of the richest people
in the world, who's bankrolling the merger with $46.7 billion in equity financing. The combined
company will be saddled with debt of over $82 billion, casting a financial.
cloud over Ellison's ambitions right from the get-go. Toby, now that the deal is sealed,
the hard part is just getting started. Yeah, let's talk about that looming villain in this saga,
the Joker of this potential merger, which is that debt load. The timeline to race this debt
was insanely tight, because remember, it was facing a lot of legal issues the merger was. And so in
just a week, Paramount sold $52 billion worth of loans and bonds. And the issue with the fact that
they had to kick the can down the road with doing this debt issuance.
is that their interest bill is now a lot higher than if they had issued the debt a few months earlier
because global borrowing costs have surge.
It's what we've been talking about, ad nausea over the last six months.
The added interest costs are adding between $250 million to $500 million a year just in interest.
And now again, Ellison is saying that we're going to cut a lot of expenses.
They think that they can cut $6 billion a year from expenses to keep sort of that leverage under control.
But that is the thing that would ruin this party if the debt load becomes too much.
And this mega merger of a company never really even gets their groove.
Yeah.
So how are they going to make money?
Well, last year, Paramount did $6.9 billion in revenue profits of $41 million.
Warner Brothers Discovery was bringing in $8.7 billion in revenue on $149 million in profits.
For both of those companies, a big chunk of those profits and revenue came from traditional TV.
cable channels, which is an industry in decline. They both have pretty successful streaming services,
and everyone's probably thinking about, okay, what does this mean for my HBO Mac subscription,
for my Paramount Plus subscription? Are they going to mash it into one? Are they going to keep them
separate? They're going to sell it as a bundle. We don't know exactly yet. For now, we know that they're
going to keep HBO Max and Paramount Plus as discrete brands. It looks like down the line,
they will probably sell them as a bundle because why buy, why have two if you're not going to
have them synergize in corporate speak. The one promising thing, I think, is that Casey Blois is going
to oversee the whole thing. This guy has been in charge of HBO for over a decade, long-time veteran
considered one of the best programmers in the business, I think, as anyone who is a fan of HBO shows
can attest. He is going to be overseeing programming of the entire portfolio. Parenthoodlept,
HBO Max, Pluto, and Discovery Plus. So he's getting a bigger role at this company. And I think
people who are concerned about what might happen with streaming are a little heartened that
Ellison is keeping him on. So I was reading some industry folk and what their takes on this was
media analysts Rich Greenfield at Lightshed Partners basically said that Paramount and Warner Bros still
isn't Netflix. That was kind of what Larry Ellison is trying to do is build up enough scale.
Oh, sorry. And Larry on the side. I know. She's, it is a Freudian slip there in all senses of the word.
he is saying that they want to become Netflix.
They want to get big enough, quick enough to compete with Netflix.
But the one issue that they have with actually going after Netflix and actually YouTube,
he mentions as well, is the fact that the advantage that Netflix and YouTube have is that they have vastly more things for people to watch,
which dials in their content recommendation algorithm to a point that Paramount in HBO have never been able to achieve.
Because when you open Paramount, the vast majority are going to go watch.
Yellowstone or a Taylor Sheridan movie, that's not an helpful signal for the algorithm if everyone
is flocking to a couple marquee shows.
First is Netflix, you open Netflix, you could watch everything from a cooking show to a
K drama to anything under the sun.
That helps it become better and better at surfacing content that you like.
Same thing for YouTube.
They have an abundance of content.
So their recommendation algorithm is really good.
So Rich Greenfield is basically saying you're not going to be able to compete, even though
you have many more prestige shows. So maybe this is just a fool's errand from the gate go.
And a final question that a lot of people have about this merger is what happens to these news
operations? Because remember when David Ellison bought Paramount, which CBS was under last year,
he installed Barry Weiss from the free press. And Barry Weiss really shook things up at CBS.
And 60 Minutes had this big exodus. And there was a lot of controversy around that.
Would he do the same with CNN? Looks like for now, just like with the streaming services,
not really rocking the boat. CNN chief Mark Thompson is going to stay on to keep CNN stable.
So that seems to be David Ellison's first sort of foray here into this new massive company
is not necessarily rock the boat right away, see how things shake out.
Because, yeah, he has his eyes on a bigger prize, which is taking down the tech giants,
like YouTube and Netflix, that have completely gone roughshod over this entertainment industry.
He's trying to save. It's been a turbulent few days in global politics with elections,
in Spain and Brazil, setting the stage for a rightward turn in both countries.
Let's start in Spain, where yesterday, longstanding socialist Prime Minister Pedro Sanchez
called for snap elections next month.
It's a direct response to a housing crisis that has engulfed the country.
Over the weekend, tens of thousands of people marched in cities to demand greater protection
for tenants sparked by the public eviction of an elderly woman.
A few weeks ago, an 87-year-old Madrid resident was forcibly evicted from the apartment
she had lived in for more than 70 years.
a stretcher on television after she couldn't afford a rent increase. While she will be allowed back
in her home, the incident sparked outrage over affordability frustrations that had been mounting for
some time. The elections on November 29th could help Sanchez cement the left's control or grant
more power to the insurgent right wing. Here is the massive gamble that Sanchez is undertaking.
He has been prime minister since 2018. Housing has deteriorated under his watch. And yet here he is
calling a snap election, trying to say that house.
is the core issue that we're going to go to battle over.
So he's trying to turn it into the center of his campaign instead of, you know,
he's going to open himself up for criticism that like, hey, if housing has become such
a big issue, you've been in charge.
How come you didn't address it here?
So that is why it's a massive gamble.
The one thing that may be in his corner is that Spain's economy is growing a little bit
faster than the rest of the Eurozone.
It grew 0.7% in the second quarter.
It doesn't sound like much, but when compared to the rest of its sister and brother countries,
it's doing all right.
So maybe the macro economy can give him a little bit of wind in his sales.
Crossing the Atlantic to Brazil, things are also looking bad for the left.
In the first round of the presidential election, incumbent Luis Inacio Lula de Silva,
aka Lula, suffered a stinging defeat to conservative Flavio Bolsonaro, since neither of the candidates
secured more than 50% of the vote for an outright victory. They'll head toward a runoff on
October 25th. Lula cannot be confident. The 80-year-old leftist is facing backlash for
stewardship of the economy by an electorate that is increasingly conservative and religious.
His opponent, if you recognize that last name, is the son of former Brazilian president
Jair Bolsonaro, who is currently serving a 27-year prison sentence for trying to overturn the
2022 election. Few are excited by either candidate. Half of Brazil's population disapproves of the
Paul Sonaro family, while the same amount disapprove of Lula's workers party.
It was an insane day in Brazil's stock market yesterday.
They exploded on this news that it was going to go to a runoff.
Brazil's stock index surge as much as 8.1%.
That is biggest inner day gain since April 2020 across 200,000 points for the first time.
It made Brazil the best performing major equity market in the world yesterday as people were just very excited for this.
Why did investors like the result so much?
Basically, a very similar situation to what's happening here in the U.S.
investors have become concerned that government spending in Brazil's fiscal credibility under Lula has been lacking.
And so, Flavio is seen as someone who is going to tighten the fiscal environment a little bit under his administration.
There's also the Trump angle.
Trump is a little bit more amicable towards the Bolsonaro family, his father and now the son.
And so the fact that Flavio is a Trump alley means maybe the beef industry will get a little bit of break.
Trump has kind of pivoted away from Brazil's beef industry and towards Argentina's.
Maybe some of those tensions will thaw a little bit.
So just a boondogle of a day, the greenest market in the world, all thanks to this election being a lot closer than people expected.
And whenever Brazil's presidential election has gone to a runoff, the candidate who finished first in the first round
has gone on to win the presidency.
So yes, it is looking very good for Bolsonaro, the sun, which is why you saw it stock market
surge.
And we're seeing a huge right-wing shift across Latin America.
If Bolsonaro does win in that runoff later this month, that would be the seventh consecutive
win by a right-wing presidential candidate in the region.
Let's move on.
Electric vehicles looked to be on life support.
A major tax credit was rescinded this year.
Elon got sidetracked by AI and robots.
And Americans never quite showed.
up to buy like brands thought they would. But the war in Iran has been a defibrillator for the industry,
shocking it back to life as high gas prices made that charging port look a little more attractive.
Tesla and Rivian both beat delivery expectations last quarter, while Hyundai and Ford say some
dealers are actually requesting more inventory on their lots again. Worldwide, the floodgates
have been opened. Gas powered cars now account for less than half of global new vehicle sales for the
first time ever. Just 49% of new car buyers are opting for gas guzzlers, which is down from 74% in
2021, according to Mobility Global Data. China is leading the charge with gas car sales falling 26%,
but Europe is not far behind, buying up nearly 50% more EVs in the first six months of this year
compared to the last, as diesel prices soar 38% higher since the Iran war began. Neil, when fuel
gets pricey, consumers start looking for more fuel-efficient cars, meaning this is a pivotal moment
for EVs and hybrids. People respond to prices going up and oil shocks. We've seen it a number of
times throughout history. Back in the 70s, there were two oil crises, 1973 and 1979. What happened?
Well, before 1973, global oil demand growth was about 8 percent, according to Bloomberg. Then
1973 happened, and it slowed to 3.9 percent. Then 1979 happened, and global oil demand growth
slowed to 1.7%. That's happening now. We don't know the exact macro numbers, but we are seeing
anecdotal reports and reports from folks like Rivian and Tesla saying that people, despite higher
prices because of that tax credit being removed, are once again embracing electric vehicles.
It's not a huge turning of the tables like the cats versus dogs thing, but we are seeing
the inkling of a comeback because people are going, are driving and they're filling up for 60, 70,
$80, $100, especially if you're a truck driver, it's a lot more. And they're saying, well,
maybe EV isn't a bad option. You mentioned trucks. Americans are starting to downsize a little bit.
They're not going for, you know, the full-size lifted trucks that you see in my high school,
Florida parking lots. Full-sized truck sales fell 2% in the quarter across all brands.
Large SUV sales fell 6%. And that's important because those have been the moneymakers
that all the American car brands pivoted towards. So like, this is where we're making.
our cash, let's make more of these and let's actually get rid of some of these hybrids and these
smaller and mid-sized trucks and SUVs that no one wants. Turns out that's exactly what everyone
wants right now. So it is another pivot that they seem to have missed the mark on. The real
winner, too, beyond EVs and beyond, you know, smaller and mid-sized vehicles is hybrids. 83% of new
cars still have an engine in them. Gas cars are under 50 so that you think that they're all
turning to EVs. No, actually a lot of these are hybrids that have gas and battery powered vehicles. And that
is great for Korean automakers. Hyundai hybrid sales up 39% this year. Kia hybrid sales up 152%. So they are
stepping in where the American companies are dropping the ball to say, you want a hybrid. Here
it is for you. Our business is growing like gangbusters right now. All right, we're going to take a
quick break and come back with Toby's Trends right after this.
Neil, do you know where AI actually creates an advantage when it comes to deals?
Finding coupons?
Wrong kind of deals.
Datasite and FD Longitude recently heard from 1,000 dealmakers to understand how AI changes the way dealmakers do deals.
More than half of respondents say human-only decision-making is no longer enough for complex deals.
The real competitive edge is knowing where AI can have the biggest impact and where human judgment still makes the difference.
Go to datasite.com slash brew for a full breakdown of the results.
datasite.com slash brew.
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Neil, I love a staple, don't you?
Finally, something we agree on.
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Filling your house with mid-century modern furniture used to signal taste in an appreciation of a vintage aesthetic.
But now it signals you're a millennial who loves madman.
and lives close to a West Elm, and that transformation is one I want to talk about on today's edition
of Toby's Trends. Wall Street Journal reporter Misty White Seidel wrote a piece called how mid-century
modern design went from cool to cringy, documenting the rise and fall of America's defining
post-World War II design language. Geometric side tables, tapered wooden legs, orange-toned lamps,
all were cool at some point, but have since been ruined by a fatal association with millennial
cringe, according to Sidel. It's not that the pieces themselves have lost their inherent design appeal.
It's just that they've both been overproduced and forced into environs where they look like a fish out
of water. Even an eam's chair loses some of its aura if it's a knockoff source from Home Depot and
stuck in the middle of a millennial gray starter home. The mid-century modern craze is showing signs of
slowing with sales on the high-end resale site for Stibbs down 4% compared to last year. Other vintage
furniture stores say pieces that used to fly off the floor are sitting unsold for longer.
Neil, everyone wanted to be Don Draper drinking in old fashion while lounging on in Saranen,
but instead we got millennials sipping pumpkin spice lattes lounging on Amazon basics.
It is remarkable how much of an impact Mad Men had.
And I'm not just saying that because I love the show, but Herman Miller, which makes the
Eames chair and other mid-century modern pieces, said that its business jumped 60% in North America
over Mad Men's seven-season run from 2007 to 2015.
Now, most design trends style people would tell you,
just come and go within five years.
That's the general timeline for these things
where a generation maybe embraces something
and then something new comes along
or they revert back to an old one like this particular thing.
But this cycle for mid-century modern
has gone on for 25 years.
So it's had remarkable longevity.
Yes, it was probably boosted by all these pop culture,
elements like Mad Men, but it seems like finally the steam has been running out because it's become
so popular that it's become cliche. And, you know, some experts have said that these pieces
that people are trying to put in their house come across more like props than something
that it has a coherent design. The issue is its popularity, because if you are a West Selm, if you are
a Home Depot, if you are in Amazon, you see everyone liking this from vintage stores and say,
wait, I can make that look pretty close to what an eam's chair looks like, but for a fraction of the cost.
So the fact that just this flood of dupes hit the market, that inherently makes the design language look a little bit more cheap, a little bit more cringy.
Also, they were just being put in the wrong places.
I mean, you walk into a coffee shop, you walk into an Airbnb, and it is like sometimes this cavernous starter home with an eam's chair knockoff there.
You're like, that doesn't look cool in any sense of the world.
What is next?
Yeah.
That's the big thing.
Tell me what's next.
If mid-century modern is out, what is coming in?
And apparently it's controlled chaos in aesthetic that anything goes and you want to be seen as more eclectic.
But somehow it all has to fit together.
That's sort of the big shift beyond like the sort of minimalism of mid-century modern.
Now people are intentionally mixing eras and aesthetics to make them seem like a cool, eclectic person.
I also have seen that we're seeing a resurgence in Arc Deco.
So we were going from the 1950s to the 1920s and the Jazz Age.
Both Pinterest and First Dibs reported a huge spike in searches for Art Deco elements last year.
So we're definitely moving away from the more traditional and more minimalist stuff to more geometric shapes to more modern materials.
That's as far as much as I know about Art Deco besides the Chrysler building and the Bayer State Building.
But if you want to look hip now, you're going to maybe ditch your mid-century modern unless you got this.
I still like it.
Unless you have like a Frank Lloyd Wright house, then you can probably keep your mid-century modern furniture.
Otherwise, maybe think about something like, you know, chunky styles like this maximalist thing or go even further back in time to a Art Deco.
Let's bring to the finish with some final headlines.
Sam Altman probably wants a do-over.
In an interview with Politico release yesterday, Altman said that people should be willing to tolerate bad things from AI because on net it will be positive for society.
Altman was responding to a question about how OpenAI's response to safety was different from Anthropics, a hot button issue right now.
He replied, one of the differences between us and some of the stricter AI safety people is that we believe that the world should accept some bad things happening for the benefits of this technology.
I do think the lighter touch regulatory stance we advocate for comes within accepting of the fact that some bad things are going to happen as society figures out the resilience.
This did not go over well with a lot of people.
AI researcher Gary Marcus at Altman was quote, saying the quiet part out loud, suck it up so you can make us rich and powerful.
Dude, it was been, had been on a media tour saying all the wrong things apparently. In a separate interview, Altman told Fortune that Open AI has not solved alignment, which is kind of a big deal where you want the AI to do the bidding of its creator in the way that its creator wants it to do. That also coincided with a Open AI safety team leader,
quitting due to safety concern. So you have that as the backdrop, all these hacks as the backdrop.
And then here he comes out and say, yeah, actually everyone just accept all these bad things,
did not come over very well, came over as a little tone deaf.
Moving on, Russia may have a problem on its hands that we haven't encountered since the 14th century.
The plague. A 28-year-old researcher at an anti-plague institute in Siberia has died from what
Russian authorities are calling pneumonia of unknown origin.
Local reports suggest she may have been exposed to the pneumonic plague, a rare form of the
disease that can spread through airborne respiratory droplets after she allegedly broke a test tube
containing the bacteria, the same bacteria that can cause boobonic plague.
Sounds exceedingly scary, but authorities aren't worried yet.
It's actually very hard for pneumonic plague to spread from person to person, Dr. Ashiz Ja,
who served as the White House COVID-19 response coordinator,
told NBC News. The chance that this becomes a larger outbreak, let alone a global pandemic,
is exceedingly low. Still, Neil, the U.S. State Department is monitoring reported cases,
and I hope this clip isn't played as part of a newscaster montage documenting the rise
of a global pandemic. Especially with the mullet. I mean, that's how people will remember you.
If this is the start of something big, Russian authorities are saying this is not the start of
something big. Just this morning, the governor of Irkuz said that we did extensive lab testing,
of the woman's body and quote, their results show that no microorganisms connected to
where professional activities were found. However, Russian authorities have not done a lot to earn
the trust of the global health community. They have been accused of being secretive and mysterious
around total COVID-19 pandemic counts. So that's why you have global health bodies saying,
just be transparent with us. We're, as the U.S. said, we're keeping an eye on it. But there's
just it's just hard to keep an eye. It's like you're wearing foggy glasses when something happens
in Russia, especially in Eastern Russia, where they're not particularly transparent. So yes, this
headline was shared a lot because whenever there's the word plague in the headline, especially
when they're working at an anti-plague institute, is certainly something you're going to click on.
The people who are closest to the situation are saying, no, there's no problem here, but we'll
definitely keep an eye. Finally, Nobel Prize Week has kicked off with a first.
first award in physiology and medicine going to three scientists who showed how you can use light
to help explain the inner workings of the brain, a field known as optogenetics.
Carl DeSroth, Peter Hedman, and Georg Nagel, the winning trio, pioneered a technique where
you use pulses of light to activate neurons, helping scientists get to the bottom of memories,
behaviors, feelings, and psychiatric diseases like OCD and schizophrenia.
The tool is showing special promise in blindness therapy, but the Nobel Committee said it
laid the foundation for an entirely new era of neuroscience. More prizes will be handed out to some
very smart people every day this week. I think it's funny how different news outlets frame the Nobel
Prize being handed out. BBC said Nobel Prize awarded for revealing inner workings of the brain.
CNN framed it as helping decode the mysteries of the brain, while financial times went a little bit more
on the nose and she said Nobel Prize in Medicine awarded for light-based brain mapping. Toby's framing
is that they basically found a way to make specific brain cells respond to light.
And that's important because before scientists could see where activity was going on in the brain,
but now they can actually flip specific brain cells on and off and see what changes.
So maybe you flip one on and see if someone gets hungry, see if they feel fear.
It just allows you to dial in which sections of the brain are responsible to what.
We need to find the switch that makes you an Eagles fan nail.
switch that off, switch on a more exciting team.
Siriana is switching it off already. You don't have to worry about that.
I will say, if you want to warm your heart a little bit, watch the video of Carl Dsroth,
who's at Stanford telling his family that he won the Nobel Prize.
They're just in a living room and he walks out and his kids are just sitting there and they're
PJs and he goes, I just won the Nobel Prize and they all go hug him really closely.
It was just amazing because you just look at it.
Look at this guy. He won the Nobel Prize for doing some remarkable things. He just looks like a
regular dad. He has four kids. And he was like, yeah, well, the first thing I did after I won the Nobel
prize was make my kids lunch for school. So these in some ways are normal people. In many ways,
they are not normal people. The physics prize is coming this morning. That is all the time we have.
Thanks for starting your morning with us and have a wonderful Tuesday to share your thoughts on the
episode or anything else. Send an email to Morningbrewdaily at morningbrew.com or DM us on Instagram
at Embed Daily Show.
Let's roll the credits.
Emily Milliron is our supervising producer.
Raymond Lou is our senior producer.
Our producer is Olivia Graham,
and our associate producer is Olivia Lake.
Technical direction by Nina Miller.
Hair and makeup is thinking about getting a kitty
and our show is a production of Morning Brew.
Great show to Daniel.
Let's run it back tomorrow.
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