TBPN Live - Netflix Acquires Warner Brothers, Apple’s Leadership Shakeup, SpaceX Prepares For IPO | Diet TBPN

Episode Date: December 6, 2025

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We're live again from the New York Stock Exchange. Thank you for the Boats Found Journey. Let me give you some facts about Netflix. They're going to buy Warner Brothers in HBO Max for an $82.7 billion deal. The acquisition is expected to close following Warner Brothers Discovery spinoff of Discovery Global TV Networks Division in Q3, 2026. There's a bunch of fun, interesting things hitting the timeline. Obviously, this is a tech story because of Netflix. And it is a story that we will be talking about for quite a while.

Because although this has gotten announced in the last 24 hours, it's very likely that this is going to be a very long, drawn-out process before it actually gets regulatory approval. So, it's official in a move that will dramatically reshape the entertainment business. Netflix and Warner Brothers, or WB. Don't call it Warner Bros. Although we want to. The insiders, they call it Warner Brothers or WB. Warner Brothers Discovery announced an agreement Friday under which Netflix will acquire Warner Brothers, including its film and TV studios, HBO Max, and HBO. The deal has a total enterprise value, including debt of $82.7 billion, with an equity value of $72 billion. The company said the announcement of Netflix's deal to buy the Warner Brothers streaming and studio business came after a week's long bidding war that pitted the streaming giant

against David Ellison's Paramount Skydance and Comcast. Didn't Netflix's stock trade down on this news? Some people are excited about it. Yeah. Some people are, plenty of people are not excited about it for various reasons. Some people don't think it'll get approved. Other people think this is, you know, it's quite an extension. WB obviously does theatrical releases.

They have a movie theater business. It's not, it's definitely will be quite an extension to Netflix's core business today. So Netflix said it expects to, quote, maintain Warner Brothers. The company has historically been more of a builder than a buyer, and so Netflix is trying to sort of reassure both fans, employees, even people who might just see Warner Brothers Discovery as like a fantastic asset that doesn't need to be, like, stripped for parts.

He's trying to push back against a potential narrative that Netflix will be very ruthless in cost-cutting and lose some of that, you know, what people think made WB amazing. art. So he said, Netflix expects to maintain Warner Brothers, current operations, and build on its strengths, including theatrical releases for films. I know this doesn't matter to you because you never go to the theater and you never see it from. Hey, we went and saw Dune. That was like two years ago. But we got a, we got a, when we did that, it was a lot of fun. We got a bunch of the guys. We got a bunch of the guys together. We said, we're going to make

a monthly thing. Yeah. We were close. At the start of the year, we were doing that. We were doing that. We were getting everyone together, just like guys, not. out, kind of, but to the movie theater. Because we were like, okay, what do you do if you're a guy, and you have a bunch of guy friends and you want to, you know, go meet up, but you don't really like drinking. You don't know anything about sports. Like, what can you

do on a Tuesday night? You can suit up and head to your local movie theater. You can suit up and head to the local movie theater. I mean, the reality is that theaters are going to change. They are like, there's a question of like, you know, fast takeoff in AI, fast takeoff in streaming. Like, it's been 20 years since

you've been able to watch things on the internet. so you've been able to watch Home Box Office was a way to watch a movie at home. In some ways, the ability to put a TV in someone's house was the beginning of the end for the theater. They were immediately substitutes, although the difference was massive screen versus tiny CRT.

And then it was like, okay, a 42-inch TV, flat screen. Now that might cost a couple grand. And it was like a serious expense. It was a couple grand. Now they're regularly giving them away. And so, of course, that's going to be a competitive pressure. but also it's not going to destroy the theater immediately, but it's going to have an erosion of fact over decades,

and that's exactly what's happening. But it's nice that Netflix is not declaring this the end of the theater. They're going to continue to invest in support. So Netflix signal it would keep HBO Max as a discrete service, while it also touted the addition of HBO and HBO Max content to its lineup. And so we're going to add the deep film and TV libraries and HBO to an HBO max programming. Netflix members will have even more. high quality types. Will it be called Netflix Mac?

You need to be Netflix maxing. The article goes out. This allows Netflix to optimize plans for consumers enhancing viewing options and expanding access to content. Netflix says it expects to see $2 to $3 billion in cost savings annually by the third year after the Warner Brothers Discovery Deal closes. This is from Martin Pears. He says Netflix's Warner purchase is an $82.7 billion dollar blunder. He's calling it a blunder. He says it will likely, announced Friday morning, will likely prove a stupendous error by a management team that until now has rarely put a wrong foot. Netflix paying a huge price, 27 and a half times next year's expected earnings well above prevailing multiples for film and TV companies for businesses that likely won't help it add many subscribers, right? Martin continues, moreover, the deal is likely to face severe regulatory obstacles.

Again, so Netflix is not exactly Trump aligned, right? they Netflix did the deal with the Obamas and so I think that in a world where WB is going to Paramount I can see that much more likely to get through whereas this this is going to make sure the Netflix team is going to be spending like at least the next year I would assume working on this

yeah I mean it feels like it's so hard to make the case that this creates some sort of monopoly because Disney owns it's like yes okay now Netflix has Swiggin, and they also have Batman, but... Jason Kalar, who's a former Warner Media CEO, says, if I were tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood

than selling WBD to Netflix. Ben Weiss says, disagree. Hollywood is competing with Silicon Valley, Apple, Amazon, Google, Meta, preserving some notion of competition in and in between Legacy Hollywood, risks winning a battle and losing a war that old media companies need to more of the right type of scale.

This does it for WB. and says, when I use that phrase competition in Hollywood, I'm referring to having a sufficient number of vibrant and robust entities that can and will aggressively compete against each other to produce and distribute films, series, live events, and more for decades to come. I'm not focused on the legacy of it all. I mean, it might be high, but just in terms of, like, Hollywood, filmmaking,

these feel like extremely competitive areas. There are so many different, there are so many different streaming, services and bundles that you can piece together, there are folks who are like, yeah, you know what, I order from Amazon, so I have Amazon Prime. That's where I watch everything. There are still people that just go to Apple, you know, Apple TV and just buy a movie. You know, you can still just do that. You can be off in the Netflix ecosystem. You can be in the Hulu ecosystem. Like, it doesn't feel like there's a crazy lack of competition in media right now. I would be somewhat surprise if this doesn't go through,

but, I mean, you never know. I don't know. I think Netflix, again, we were before this, we were having lunch with cable exec, and he was kind of bringing up how Netflix had gotten caught up a little bit in kind of some of the woke stuff. Sure. And again, I just think in Trump America,

it just feels far more likely that the Alicons could get a deal done. and they're notoriously absolute docked. Yeah, there's a rumor that they're going to try it out bid, right? Yeah, so right now, this is Chris Gasparin over at Fox says. Scoop, as reported, Paramount and Skydance, Skydance is now looking to launch a hostile bid for WBD because it feels it's $30 a share all cash offer is actually higher than what Netflix offered in terms of cash stock

and the value of the spin-off of the cable business. So this is still developing. Before Netflix IPO it in 2002, apparently Bezos offered $12 million to buy it. Can you imagine if Netflix had sold for $12 billion? Well, they also tried to sell the Blockbuster during the... So Blockbuster had a chance to buy it for $50 million, and they laughed it off. But then it was just a DVD delivery service, and they were like, we can build this. We have DVDs, we have all the infrastructure, we can just take it from the stores.

Like, we don't need to do this. But what they didn't realize was that actually building technology, actually building a real tech, like, dreaming service and scaling that platform. I mean, Netflix has some of the greatest, like, just infrastructure engines. And even the early recommendation engines. Like, I remember my dad being like, yeah, Netflix just recommended it knows what I like. And it just said it sent me this. They said, you're going to enjoy this.

You were making the point that putting Netflix and Warner Brothers together, it doesn't, like, everyone's already subscribed to Netflix. I don't know if that's true, if the trends continue. Like, Netflix has a fair amount of, like, they have their squid games. They have some big, they have some big IP. But if you just think about, like, the drumbeat of HBO, come back every season. Oh, you're not watching Game of Thrones. You're out of the loop.

Oh, you're not watching Succession. You're out of the loop. Like, the conversation driving shows, I feel like, are on HBO much more consistently than Netflix. And, in fact, I don't even know if I'm logged in to. Netflix on my phone right now. So you're a true enthusiast. For me, as someone who's not an enthusiast, I'll go to Prime because I'm like, I rarely watch movies. If I'm going to watch a movie, I want to just, I'm happy to just buy. I'm not like going like, let me get the, let me get the free option on Netflix. I'm like, I will just buy the thing that I want to fill this 90 minutes

with. Anyway, so the deal doesn't include WDBD's cable channels such as CNN, TNT, TBS, and Discovery, which are being going to spun off. Even if Netflix, Netflix gets regulatory approval. It will have to take on $50 billion in debt to complete the deal and we'll spend a couple of years cutting costs to reduce that debt. Netflix does do around $9 or $10 billion of free cash flow. And so they can certainly service the debt. Anyways, in the first nine months of this year, WBD's studio and streaming operations

generated $2.3 billion in earnings. Next year, Netflix executives said they expected the Warner business to generate $3 billion in EBDA. That's a price of 27 and a half times EBDA. Netflix says the deal value represents a multiple of 14.3 times. WBD's traditional rivals, Disney, and Paramount Skydance are each trading around 11 times. Kramer said so out of the box, Netflix as the world's biggest content creator by far, exciting, but not necessarily in a good way for shareholders. That's so funny.

I don't think people realize the licensing business Netflix is about to have if this deal goes through. Warner Brothers' animated IP library alone would bring in billions and new merchandise. revenue, coupled with new versions of these iconic shows on the platform. Game over. And he lists some of these out. And one of them, I think, is hilarious. It's Foghorn, Leghorn. They own Looney tunes. So they have Bugs Bunny, Daffy Duck, Porky Pig, Sylvester, Roadrunner, Wiley Coyote. These are, yeah, these are time-honored iconic characters. I just think it's funny because very clearly, there are a series of bankers out there that have a spreadsheet, and somewhere they have a row, and on that row is Foghorn Leghorn, and attached to Foghorn Leghorn is the value of

the intellectual property of Foghorn Leghorn, who's like a large rooster who talks with a funny accent, and I just imagine that they're out there saying, like, yeah, Foghorn Leghorn, that's like $30 million. That's a $30 million. Porky pig? Borgie pig's $80 million. Let's view a sum of the parts. What about snagglepus? I don't know. I thought you were making some of these out. No, these is a part of the Han Barbera. Okay, so, so Polly Market has, who will look require WB at 86% today. Paramount is still only sitting at 6%. Mike Mirafloor says we already have nano-banana Pro TVC commercials

with decent paid media budgets behind them. Everything is moving so, so quickly. Okay. So James Hardin is in an ad for my prize. I don't know what my prize is. He said this is the best commercial he's ever been in. He never stepped foot on the set. Let me show you how to crack the code on.

on-seleb deepfakes for this My Prize ad we did with James Harden. So this is a guy named Billy Woodward. Yeah. Who's been doing some... I think they're actually putting behind this, this ad on TV, because it looks like a TV commercial, but this also could just be a viral marketing campaign on... Wow, my prize is a premium online casino games.

Play games and win. James Hardin is getting in on the gambling trade. There's a very viral post right now that says breaking. President Trump set to announce a new AI platform. called Truth A.I. There's not a single, not a single legacy media institution has reported on this that I've found. So I would, given that this is a story that they'd be very excited to cover, I would be wary that it's real yet. But that's not stopping J. Bull, T-A-R-D from saying, and you guys think Google won the AI race talking about how Trump is set to unveil the new AI platform

truth AI. You know what the crazy thing is, like, I keep laughing about this fact that, like, it has got to be so hard to justify an in-house AI foundation model training run now, if you're a big platform, when the rebuttal has to be, okay, so you're saying that you need to do something special, you need to do something creative, you need to do some weird deal with some other people, put something together, but Apple can just work with Google. Yeah. It's enough for Apple to work.

It's not a good enough for you. Apple works to just buy tokens from Gemini from Google, but you, your business is more special than Apple's. I think Apple is in the position where they're like, we don't need to prove to, like, I feel like an analyst can look at Apple and say, like, they will have leverage in AI, at least today. Yeah, yeah, yeah, this is a multi-taic. Whereas, where there's other businesses that feel like, okay, we need an AI strategy, it's not enough to just announce a partnership with a lab, we need to, like, actually own the weights. Yeah, yeah, yeah. The Walser Journalist saying that Apple departures point to challenges for iPhone's dominance. And I'm, I think it's too early to call the iPhone challenged.

I feel like the iPhone's dominance has not been challenged yet. Maybe that is coming. You know, there have been several top lieutenants who have left in the past 12 months. Apple is facing a wave of executive departures as the company continues, a period of transition, not only among its leadership, but if rivals have their own. way for its businesses as well. On Thursday, the company announced that his general counsel and head of policy will both retire next year.

On Wednesday, a top designer left for meta platforms. On Monday, Apple said its head of artificial intelligence strategy would retire. Its chief operating officer announced its retirement in July, and the CFO has transitioned into a new role. Are the heads rolling, or are these retirements? There's a lot of like, you know, sort of management. It feels like Apple's just, like, not the place to let the drama kind of come to them. Apple was overdue for a full executive reset.

Just need to add Cook to the list. And for a replacement, Forrestall is only 56. Time for a comeback. Oh, that would be very interesting. Yeah, there's a lot of Forstall fans out there who think that he didn't get it, he didn't get it right, or he didn't get the opportunity he deserved. Cook can't catch a break. He's like, I still think Cook's done a lot of good stuff.

I'm still bullish on Cook. The executive departures underscore a changing of the guard underway at Apple. Even as chief executive officer, Tim Cook, himself shows no sign of stepping down, even though everyone is leaking a variety of rumors to the contrary. Cook and his new lieutenants face a critical test preparing Apple for the AI era and a wave of new competitive devices that results. SpaceX tells investors it's aiming for a late 2026 IPO. Apparently Elon Musk's SpaceX has told,

investors and financial institutions that it is aiming for an IPO in the second half of next year, the talk comes as SpaceX considers holding a sale of shares held by investors and employees that would value the company at $800 billion. Quite the markup, double its valuation in a sale this summer, and what would make it the most valuable private company, he's got to be the most valuable private company. It probably candidly makes him sick that Open AI has briefly eclips. Mark Benioff is saying that he must be. might rename the company Agent Force.

Trace Cohen says, just force. Why not just Force? Oh, Force. Well, isn't there a Force India, the F-1 team from a couple years ago? B-YT, or W-WT, Force India? That was like a team. Benioff is on a tear, his pin tweet right now. LLMs are the new disc drives.

Commodity infrastructure you hot swap for whoever's cheapest and best. The fantasy that the model is a moat just expired. People who really go wild. They're going off down here. Why not just sales? I like just sales. Just be sales ink. I don't think you can be.

I think that's too generic. I don't know. Not if you're- For what you do. I mean, he would have to update the ticker too. The ticker is the bigger one. F it, nothing else is working. Go for it, brother. A name change, sometimes we'll fix you.

For anyone who doesn't understand, cursor processes more tokens than Salesforce all-time figure every six days. Salesforce has 20 million users. I mean, Credit Cursor has a similar amount of users, I think. Sure. Assuming same average token count per active Agent Force user count is 40 to 60,000 truly active users, a.k.a. 0.2 to 0.3% adoption three years after launch. Like, all tokens are not created equal. Like, you can generate so many, so many tokens if you're doing these, like, deep research reports.

And, like, if you had Agent Force going around and basically, effectively running a deep research report on every contact, in every CRM under, like, under... Every conversation. Every time you get a new email from a lead, right? Like, the token generation could be incredibly high and also deliver very little value. On the flip side, you could have a really fine-tuned model that is, you know, laser-focused, more of a scalpel. Yeah.

And you can be getting a lot of value out of those tokens that you are generated. So I don't really know. Logan Paul, Jake Paul, and Jeff Wu are starting an eight-week Excel. It's a 25K safe followed by a $100,000 price round for a total of 7% equity. A lot of people are confused about doing it as a price round for 100K. A founder could easily end up spending like 30 grand, you know, like depending on who their lawyer is. Oh, yeah, that is tricky. So it's like 100K investment and then you have like, let's assume you're like super efficient and it's like 10 grand.

It's like, is that? Yeah, it's kind of annoying. And then, yeah, it's, it's annoying. That said, I think there's a lot of interesting businesses that could go through this that would really benefit from working with Jake and Logan and Jeff, right? It's so interesting that it's a 25 case safe and then a $100,000 price around. Like, why not just $125 for 7% like on a safe with a cap that ensures they get 7% no matter what? Like that feel, I would love to talk to them.

I think hopefully we're going to be able to get Jeff Wu on the show at some point. We can ask him about how he is. you know, thinking about that particular term. Oh, 7% for 125K, that's low. And that's certainly lower than YC. YC, you come in with like, I think, a $10 million evaluation. This is more like a $1 million valuation. But, you know, if you're an earlier in your career,

you're not ready to go to a different higher valuation. Like, this could still be a good deal. Or you don't need a lot of capital for your business, but you do need a lot of attention. Like, I could see some consumer brands getting started this way. Well, I mean, I just remember, like, like YC was minority. star for like what I wanted to get into with my first business but like I got denied the first time I applied and I was like if you gave me $5,000 for 10% of the business like I would take it

because I want to work on my thing and I want to keep going and like yes at some point it can be predatory but like with some of the first ideas that I was coming up with like I definitely didn't deserve 125k for 7% because they're like slop companies that were like very unlikely to win to succeed so I do wonder if they will position this as okay you're going to be able to accelerate on the go-to-market side. You're going to be able to accelerate on the creator side, creator partnerships. This will be, there's a whole bunch of different ways.

It could be something where you are working, you're going through this accelerator because you get to ask Logan and Jake about their media creation, their creator work, and then you're launching your company, more likely to go viral because these guys really understand virality. On the other side, it could be you're coming in and you're taking a crack,

building something that might wind up being more like an incubation for them. The remaining Apple leadership team. Who is this? Travis Scott, Tim Cook. And Mr. Beast? Mr. Beast did say that he's going to film on iPhones. I'm not sure what the Travis Scott connection is. Has he done a partnership with Apple in one way of this?

No, there are still plenty of folks. Eddie Q is still there. Apple leadership team is still stacked. Don't you worry. Don't you worry. Apparently, Open AI must turn over 20 million chat logs to play. Judge Ona Wang has ruled. You have to send an email to a server that adds a chat GPT response in with your lawyer c-seed.

That's how you maintain confidentiality. Harvey, who Keith also mentioned, raised $160 million at an $8 billion valuation. This is why Keith was talking about raising money. 2% dilution round from A16C. I mean, you got to take that money. They raised $300 million from Sequoia at $3 million. billion in January, $300 million at $5 billion from KOTU and KP in June, and then 1608 from A16Z.

Shout out to Spencer and the boys at KOTU for a little markup there. And I feel like law firms have got to be pretty discerning on making this purchase decision at this point. Like, it's not entirely exploratory budget anymore, and it's not viral, like, something that's like, oh, it's like a flash in the pan and then all of a sudden, like, they're not going to be able to monetize. My question is, like, do you, like, if anybody that wants to say, like, oh, this is, like, out of control, it's like, do you think they'll be able to get to, like, $8 billion of revenue? Legal industry is pretty big, and it's been traditionally pretty hard.

And they actually, they actually, so the labor displacement thing does feel real here, because I do think a law firm would say, hey, currently we have 100 associates. Yeah. We can condense that down to about 20 and do the same amount of work by working with something like Harvey. And again, the vibe had, at least with a lawyer buddy of mine, had shifted drastically with Harvey a year ago. He was saying, we're like using it a little bit. Now he's like, it's one-chotting stuff that I didn't think it would. He says, I'm one-shotted, actually, by it. I'm one-shot.

Thank you for tuning in with us today and yesterday from the NICC. And we will be back here soon. We'll see on Monday. Cheers. Thank you. Thank you.