WSJ What’s News - Amazon and Netflix Are Winning: Can Old-School Media Compete?

Episode Date: November 9, 2025

This week we’re bringing you an episode of our sister podcast WSJ’s Take On the Week, a weekly show focused on the news that’ll move markets in the week to come. In this week's episode, guest host Miriam Gottfried is joined by Michael Nathanson and Robert Fishman, senior media analysts at MoffettNathanson, to break down the potential Paramount Skydance and Warner Discovery merger. Plus, co-host Telis Demos and Miriam discuss the Supreme Court case challenging President Trump’s reciprocal tariffs, how the affordability message is winning elections, and the recent drama in the private credit market.  Further Reading Warner Discovery Moving Fast on Split or Sale, CEO Says Supreme Court Appears Skeptical of Trump’s Tariffs Wall Street Couldn’t Stop Mayor Mamdani. Now It Has to Work With Him. Private-Credit Earnings Ease Investor Concern Over Asset Class’s Health Learn more about your ad choices. Visit megaphone.fm/adchoices

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WSJ's Take On the Week. It's our weekly show focused on the news that'll move markets in the week to come. We thought you'd like this episode on one of the biggest business stories right now. Paramount Skydance's bid to buy Warner Brothers Discovery. It also digs into other media mergers, streaming in tech, mega deals for sports broadcast rights, and plenty more. So give it a listen. And if you like what you hear, subscribe to WSJ's Take On the Week, wherever you're listening to us. Welcome back to another episode of WSJ's Take On the Week. I'm Tellus Demos. And I'm Miriam Gottfried.

Well, we've got a big episode this week. Our main conversation is about, well, our own business, the media. A lot going on. A lot going on. A lot of drama. But first, we've got a few hot topics to cover a lot happening in the news this week and a lot coming up. We've got Donald Trump versus the Supreme Court. We've got Mayor Mamdani. And we've got, as always, especially when you're here, Miriam, private credit. One of my favorite topics. More to talk about there. All right, Supreme Court. Well, of course, the president's lawyers were in court to defend the president's use of a certain tariff power, the I-E-E-E-P-A or IEPA, which I'm sure all of you know, AIPA, which all of you know, of course, stands for the International Emergency Economic Powers Act, which is one of the ways that he used to create the reciprocal tariffs.

Basically, by declaring that we were in a state of emergency and that was what gave him the power under this law to, you know, enact these tariffs, which would typically be the role of Congress. And so now it's all the way to the Supreme Court. And it sounded like it didn't go great for the president this past week. The way that our Supreme Court reporters here at the journal described it was that they seemed skeptical that the president is able to use the powers to act as aggressively as he did with terror. Yeah, a number of even Trump appointed justices seemed skeptical of this argument, of the government's argument. So that means it maybe isn't looking good for Trump in this case. And, you know, the question is what does that mean? You know, what our reporters have said is that typically when the government is found to have, you know,

illegally taken money from somebody, the court orders to give it back. Normally, of course, we don't pay too much attention to the intricacies of trade law. But in this case, there's the fiscal question of whether or not the U.S. government would actually have to be ordered to give back the billions and billions of dollars that had collected in tariffs. And then there's the question for the stock market of whether companies that had been impacted by tariffs will no longer be impacted by tariffs. Which has been one of the main narratives this year in the stock market. In the huge, really, really the big story in the stock market this year. But that said, even if President Trump does ultimately lose this case. There are other authorities that President Trump can use

to impose tariffs. For example, there's Section 122. I won't get into the super details of it, but that basically will allow tariffs of up to 15 percent for 150 days to address trade imbalances, which one of our reporters, Gavin Bade, wrote that that would give time for Trump to devise individualized tariffs for trading partners under a different provision, section 301, So basically, tariffs wouldn't go away. They might just come back in some other form. But tell us, you know, what this all boils down to is more uncertainty for corporate America. I mean, if you're a company that's been subject to these tariffs and now they may or may not be going away and there may or may not be another set of tariffs that could be put in their place, you really don't know.

And what does that mean for your stock price and what does that mean for your ability to plan? I think uncertainty is the enemy here if you are a publicly traded company. Yeah, but is it, though, because here we are at or near all-time highs for the stock market and the companies have been living with this uncertainty for some time, it seems that the market maybe has moved on and that this uncertainty isn't holding people back the way it was. I think the uncertainty is holding people back, but people don't know whether to react positively or negatively to these particular tariffs being removed. Like, let's say, you know, things are leaning.

toward, you know, Trump losing this case, this argument. What does that mean? We still don't really know because, as you said, there could be another set of tariffs. So should I sell my stocks? Should I buy stocks? Like, I don't really know. And, of course, there's all other layers of uncertainty that are coming in to focus right now, which is what happened in politics elsewhere, which was we had some elections. We had, of course, the New York City mayoral race, Zoran Mamdani.

One. We had a couple of other closely watched races. too. We've got the governor's races in New Jersey and Virginia. Democrats took those races. And we had Proposition 50 in California passed, which means the Democrats are able to redraw some of the congressional maps there and likely pick up some congressional seats in the next time around. So what does it mean for the market if indeed Democrats are kind of succeeding, maybe going to be strong in these midterms? And what is the message that they have for Americans? What's helping them right now?

I think the unifying message across all of the candidates who won was affordability. Once again, you know, as our colleagues have written, the economy was front and center, as it always is. And, you know, inflation, which has been a big thing that we've talked about on this podcast, was, you know, was a big focus, I think, for these candidates. You know, daily life is unaffordable. That was something that Mom Donnie drilled home. His, you know, campaign platform was all tied to affordability in the city. and that was a winning argument. And, of course, you know, that was part of how President Trump got elected by saying, you know, Biden was responsible for all the inflation and I can get us out of that.

Yeah. But live by the sword, die by the sword for Republicans, right? They've got to be wary of these inflation and kind of cost of living. I mean, it just shows that a lot of it isn't really within the control of politicians, probably. I was watching the market the day after the New York City mayor race and a bunch of banks who are lenders into the New York City rent. regulated market. Of course, Mamdani has promised to freeze the rent, meaning that he will not allow rent-regulated, rent-stabilized apartments' rents to go up. In theory, of course, that's bad for landlords and bad for their lenders. But the stocks of several of these banks were actually

up the next day. And the shares of one of the largest apartment developers, one of the largest apartment real estate investment trusts, which, again, you know, has rent-regulated properties in New York. Their shares were up a little bit, too. Some drama in the market that I cover in the past couple weeks, the alternative asset managers, also known as the private equity and credit firms, when Blackstone reported earnings, even though it beat earnings, its shares fell because people were really worried about the health of the private credit market, and private credit has become a very big business for Blackstone. That narrative seems to have changed throughout the course of the earnings cycle. Over the weeks, as more and more of these lenders started reporting earnings and sort of continued to beat the drums saying that recent bankruptcies tied to first brands and a subprime lender called tricolor or tricolor, however you choose to pronounce it, you know, that these bankruptcies were isolated incidents. They didn't really have to do with the thing that we normally call private credit, that their businesses were still healthy. There's no major crisis going on.

And they, you know, as executive by executive continue to repeat this mantra, people seem to maybe sort of buy it a little bit more. And we saw, you know, an improvement in their stock price performance after earnings. By the time Apollo reported, people were kind of cheery about it, although there were other factors in that Apollo report, too. Yeah. Although Jamie Diamond scared everybody earlier this cycle when he talked about cockroaches in reference to recent corporate bankruptcies that were scaring everybody about what other sort of. disasters could lurk. But, you know, despite that, we haven't seen a wave of increased defaults for any of these markets yet. Now, maybe there's still things bubbling under the surface. But, you know, at some point, does the greed factor kick in for the market and

overcome the fear factor that, okay, maybe there are some cockroaches, but maybe that these things won't derail what has ultimately been this huge wave of money coming into the private markets, you know, in search of yield and alternative forms of credit and things like that. Yeah. The AI boom will continue to fuel all of this. And, you know, okay, so we have to smush a couple of cockroaches and then move on, right? Well, and I think there's also this idea that stocks are, you know, at all time highs. And, you know, our colleague Spencer Jacob wrote a very well-read column about how, you know, a very

important metric, you know, the Schiller-P.E ratio is indicating that stocks are not going to going to really give us that much over the next few years in terms of returns. So people are looking for alternatives, and there's an argument to be made that maybe private credit could be one of those alternatives. And that's an argument that Apollo made, too. So I think that's kind of an interesting theory. We'll see if that pans out. Obviously, another thing powering these alternative asset managers will be the improved

deal-making environment. We're seeing a lot more M&A, a lot more deals taking place. People predicted that earlier this year. It finally seems to be landing now. That could be good for these managers, too. So that's, I think, something to really watch with them. And speaking of dealmaking, that relates to our big conversation today, which is about media consolidation, specifically the possible deal between Paramount Skydance and Warner Discovery and what else might happen to Warner Discovery if that deal doesn't happen. Well, I'm glad we're doing this because I know, even though I work in the media biz, I lose track of who owns what these days.

Like, for example, I learned recently when CBS News was in the news itself, who owns them? Which of the firms owns them? Paramount Skydance owns CBS. Okay. But then CNN is owned by... Warner Discovery. Okay, great. So they could, in theory, be part of the same company at some point?

Yeah. I mean, wouldn't that be quite a convergence? Well, that's wild stuff. And joining us remotely for this episode to talk about that are Michael Nathanson, senior analysts from Moffat Nathanson, and his colleague, Robert Fishman, also a senior ad. analyst at Moffat-Nathanson. These guys are both longtime media analysts. They've been following this industry forever. And they say that this is potentially the very last stage in the long history of media consolidation. Yeah, you recorded this interview earlier this week. And I've been excited to hear it ever since. So let's get to it. That's coming up in a bit.

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Good to be here. Thanks for having us. So the biggest story in media right now is what's going on at Paramount Skydance. Fresh off the merger that created this company, it's now trying to buy Warner Discovery, which is itself a product of a 2022 merger. And a deal to combine these two companies would create a media behemone. Robert, what are Paramount Skydance and its CEO David Ellison trying to achieve with this merger? I think the timing of when they're trying to do this signals, to me at least, that this was the plan all along. And the reason that they, I think, are pushing forward here is because they need

to reach scale and scale in streaming specifically. Most of the media companies are trying to compete with Netflix now, who's already won in terms of the scale. scale war and in terms of profitability. So when you think about global scale, what I think Warner Brothers' discovery is looking to solve for Paramount is to achieve, get them closer to achieve that global scale ambition. And that kind of gets to the next question I wanted to ask you, which is the media business is facing a lot of stress right now from a variety of factors. We have, you know, the changing economics of streaming, the ongoing decline of the cable ecosystem and the rise of short-form video sites like TikTok.

What can consolidation and scale, as you said, do to change that? So in terms of the global scale, really what these media companies need to achieve is having that global subscriber base that allows you to spread all of this investment costs over a much larger base. And so what they need from the scale, both in the U.S., if we want to start there, is the ability to better monetize the existing subscribers, both through subscription pricing, but also probably more importantly, going forward advertising. And as these ad dollars are shifting from the traditional linear ecosystem that you alluded to and going towards connected TV and different ways that the viewers are, engaging with content today, that allows you to compete better for those ad dollars going forward, especially on a global basis when thinking about how these companies are looking to grow over

the next five, ten years. Miriam, what's been the biggest change the past decade has been the advance of these really large tech companies who have enormous balance sheets, global reach, right? So if we think about the people that are now competing with our coverage of media, you know, its likes of Amazon, Amazon Prime, of course, YouTube at Google, Netflix is a massive company. If you're a traditional media company, you have to get scale, scale of balance sheet, scale of cash flow, scale of cost cutting. You know, it is a different playing field that what Robert and I encountered when we started our careers 20 years ago. Things have flipped

on its head. And in the days where we used to say, you know, international businesses and media where Australia, Canada, and the UK, because he spoke English, that's no longer true. And I think our companies, ours mean the media companies that we started covering way back when, they've been slow to wake up to the fact that you need global scale in all markets of the world, at all price points, at all content types in order to compete longer term. So we should really start to be thinking about these media companies as competing with the big tech balance sheets in a lot of ways. I mean, that's a pretty high hurdle for them. I think it's incredibly high hurdle for them.

I think as Robert and I talk about it all the time, the media company's biggest strengths, you'd say right now would be sports contracts that they've tied up for five to seven years. And library, they have great library, they've great IP. And I think Robert and I would agree that they're starting to chip away

the tech companies at the sports rights. You're seeing that more and more. The harder part, Robert, right, has been there, they've not able to, the tech company has not been able to build, even Netflix, this kind of recurring great library content. You know, yeah, they have stranger things, but that's a one-off.

They don't have the IP that Disney and Warner's, you know, Universal, Paramount would have. So it's still really an IP game, yeah, for the media companies. Yeah, I was going to go there, too. So in terms of sports, I mean, clearly the tech companies that Michael referenced are all looking at sports as this last critical IP to the traditional media ecosystem. And if they can disrupt that, that's like the next leg in terms of where traditional media has been holding on to as their last real asset to drive incremental advertising and to hold on to affiliate fee dollars as well. But if they lose control exclusively over the sports rights going forward, that's going to have another leg down in terms of the disruption that it's had on the traditional ecosystem. So if you can bring the critical IP and franchises to the table and monetize that in both

the streaming and non-streaming world, that's kind of like the ultimate solution here to compete. And Mary, to your first question, I think the market was telling us clearly that our Paramount Global Audit Zone and Warner Bros. Discovery auto zoned with the balance sheets that they had and their assets were not going to be long-term wind. in this business. So in a way, it's almost like a race against time for Paramount Skydance to bulk up in some way to get there, it seems like.

And, Robert, given that, you know, we have Paramount Skydance reporting earnings coming up. And given everything that's going on, what will investors be focused on in that report? I mean, are they just looking at the big picture or do they care about, you know, the actual numbers for the quarter? Well, I think it's clear that the numbers for three Q-QA, specifically are much less important in terms of the overall picture here, especially when thinking about the future of Paramount and what we're going to learn in terms of the plans, this is really the first unveiling to Wall Street in terms of where they want to go with

this. And it will be interesting to hear how much we hear about consolidation as part of that plan. But even without consolidation, clearly Ellison and the whole skydance team is thinking about the long term here. You've seen that through a lot of their early investments and they might be head scratching and try to have difficulty in terms of making the math work initially, thinking about the UFC deal as one example. But if they're thinking about this from a completely different perspective about the next, call it five, 10 years and not the next couple of years, I think that's what investors are probably looking for. How How can you get returns on some of these initial investments?

Can you tell us a little bit more about the UFC deal for those who weren't following it? Sure. So ESPN had the rights to the UFC deal. And basically, TKO, who owns the UFC, took that to market and found a plus one bidder that was willing to pay in our perspective, much higher than what the market suggested. And so what it did was really signal to the market that Paramount is going to approach these investments in a very different way. Again, that might mean losing money initially. But I'm sure from Paramount's perspective, if they can drive incremental subs on a combined

basis, that can help offset the upfront losses. So making a splash here at the beginning, we'll see how that works out, I guess. I want to take a step back and zoom out a little bit. And I want to turn to you, Michael, because you've covered media for a really long time, and you have been following the ins and outs of these companies for a long time. And they're really part of a long history of, you know, big media companies getting together and breaking apart again. And, you know, if you look back at history, have media deals, media tie-ups yielded positive, you know, results for shareholders? Have they been a good thing for shareholders? Yeah, thanks, ma'am. Thanks for saying that. I'm old. but I appreciate that. You know, before I worked on Wall Street, I worked at a company called Time Warner.

And Time Warner was kind of poster child for big media tie-ups. If you remember in that time, you'd be two companies merged. Then they bought Turner and AOL. And that's always going to be kind of my exhibit one of why these tie-ups may look great on paper and strategically make sense.

They just don't work. So I don't love seeing these massive tie-ups. I think what we've learned over the years, Robert and I, is that the small tuck-in deals, like buying a Pixar, buying a to-be, which what Fox did, like being strategic and investing in growing categories with entrepreneurial spirits, it's a better use of capital

to just trying to fine scale through M&A. You end up paying a big premium for businesses that really, you know, at the end of the day, don't live up to, you know, the valuations that were paid. Robert, what do you think about that? I mean, given that history, should Paramount investors be rooting for this merger? And what about Warner Discovery investors? Well, from Warner Discovery investors, I think you're clearly rooting for these mergers.

But from the Paramount side, as Michael was saying that, I was questioning, you know, to myself, is this time really going to be different because streaming is this? this X factor. And clearly from the linear media side, I think to Michael's point, we haven't seen a lot of success stories there. But for streaming, I would raise the question, is this almost a necessity? Again, back to the scale issue, these standalone streaming services can't compete on their own. So I would argue it's almost a necessity that they have to come together. Let's look at Discovery standalone before they were merged with Warner Media, clearly that has not worked out well back to the Warner Brothers Discovery investors. But at the same time, without it,

Discovery standalone probably would have been even worse off, to be honest about it. So if we think about what is a necessity versus, you know, where the end payoff is, those two answers might be pretty different. Michael, after years of covering media, you now focus on big tech. And, you know, as we've been talking about, these companies like Amazon and Apple and obviously Netflix are big players, you know, in the media game now. We know Netflix, it's a pretty focused company in terms of its strategy. But if I'm Apple or Amazon, what is my goal in media?

What am I trying to achieve? And, you know, Warner Discovery has said that maybe. some of its assets could be of interest to companies like that. What would they be possibly trying to buy? Okay. If you're Apple, I'm not sure what the answer to that question is. They've been making great content for a while here. But Apple is an enigma. I don't understand why they haven't gotten more aggressive in sports rights, why they haven't looked at other companies to buy when they had a chance. I don't think Apple knows what I want to do when it grows up in media. And their bigger challenge is really, you know, trying to build Siri to be, you know,

next gen AI platform that people love. So I'd be surprised at Apple, you know, kind of broke thesis and went after media. Amazon, it's clear what they're doing, right? Their ad platform is growing like gangbusters, right? And they have basically focused more and more sports Amazon Prime. You know, they had to start the NFL, now they had the NBA this season. So I think if you're Amazon, you're like, look, this is a way to disrupt the linear world, add premium content, and drive ads through our platform. And we have all the first party data. We know what Mirren bought versus Robert. We have all this brand connectivity because we help brands sell more things on Amazon. Let's just find more surface areas to

sell more advertising. So I think it's, I think their story is really tight and really complete. And I think, you know, we think that they're not going away anytime soon. going back to Warner Discovery, what kinds of things, like if they were truly interested in some of the assets, like what assets might they be interested in? You have all the D.C. content. You have great history of D.C. comics. So you could see more Batman, more Superman coming through Amazon globally. CNN. You want to add CNN? Robert, am I missing anything like for the Amazon thesis of why Amazon we want to chase these guys? I think it comes down to that, you know, very valuable IP.

I mean, we didn't touch on HBO, which obviously is one of the crown jewels there. So HBO and Warner Brothers content, both on the TV side and on the theatrical side, what would be the reason that all of these other companies are going to at least look, right? Our colleague Craig Moffitt covers Comcast. He's been a bit doubt. that, you know, Brian Roberts will find the regulatory approval necessary to buy these assets and we'll see if Brian Roberts is able to horse trade to get a deal done. So I'm not sure that Comcast is really out of this at this point. Michael, if you could just tell us, you know, why Comcast, NBC, you might be interested in some of the Warner Discovery assets.

There's a bunch of reasons. One is Peacock, you'd argue, 41 million subs, not growing. No global footprint is underscale, right? So HBO and Peacock. solves a peacock problem. H.O.S. Global, Universal Studios and Warner's and NBC are all contiguous. They all, between Burbank and Universal City, they share a footprint. You would build the most dynamic studio in the world by combining Universal and Warner's. That would be pretty interesting.

You also have all these sports rights one place, right, too. The NBA, which now Comcast has, the NHL and baseball. It also now Comcast spinning on Versant, which is a cable network. company, and they can take out a lot of capacity in cable by combining Versant and Warner Discovery's assets. Right. Versant is basically all of the Comcast cable networks spun out into one separate company, right? Everything but Bravo. But Bravo works on Peacock. But yeah, it's like, to me, that's the perfect, that's a much better fit in my view than Paramount. So, Michael, let's say this mega media company, which I'm going to,

lovingly call Paramount Skydance Warner Discovery, or until it gets a better name, gets created. What would that mean for the competitive landscape? I mean, if I'm Disney right now, for example, am I quaking in my boots at the thought that this could happen? I don't think you're quaking your boots because what's going to happen here is that these companies will merge, there'll be more disciplined on types of content they invest in. Yes, they'll be bigger or other than we afford, you know, maybe more expensive things. but at the end of the day, you will lose a competitor, right?

Paramount or HBO will be merged into one. You'll lose a competitor. You won't be able to make as many films because you're going to look to scale back your film investment, right? So at the end of the day, I would say everyone who's in its industry will be better off by having, you know, another competitor, no doubt, scaled, but just less competition for weekends and for new content, you know, investments, right? So I think it's really healthy for the incumbents to have this deal happen.

We're going to take a quick break, and when we come back, we've got one more question. We are back with Michael Nathanson of Moffat Nathanson. Michael, you know, I used to cover media for hurt on the street, so I was following a lot of this stuff. I've been doing it for a long time, too, so you're not the only old one. Viacom split into Viacom and CBS, which later merged back together to create Paramount, which then merged with Skydance and now wants to merge with Warner Discovery. A decade from now, will we be talking about why these companies are breaking up again? That was the original sin, by the way. The breakup of the Viacom into two pieces was one of the dumbest things ever. We all knew it at the time. And look how badly the Redstone family has

as investors because of it. But I think we're at the end. That's kind of the sad part for me, to truth be told. We're at the end. This is probably the last mega deal we will see. The cable network assets are the problem, not the broadcast asset, the cable networks, but that's going to be pushed off of people's balance sheets. And what's left will be studios, streaming, broadcast in some combination of that.

That's kind of the end of it, Mary. I go back to my time warner start. now like the first mega conglomerate here. I think we're almost done. You know, that asset will no longer exist, sadly enough, you know. Wow. End of an era. Well, this has given me a lot to think about.

I love talking about media. You know, maybe it's because I work in the media. Thank you so much for joining us, Michael Nathanson and Robert Fishman of Moffat Nathanson. Our pleasure. Thanks for having us, Miriam. By the way, audience, I wanted to say that if you have a question, on a hot news topic. We'd love to hear from you. And we can answer your question in a future episode. We've mentioned some comments before on the show that we've seen on social media.

So who knows, maybe yours could be next. Drop us an email at Take On the Week at WSJ.com. And that's everything you need to know to take on your week. The show is produced by Anthony Bansy, Jessica Fenton, and Michael LaVelle, with additional support from Jana Heron. Michael LaValle and Jessica Fenton are our sound designers. Michael also wrote our theme music. Jessica Fenton is also our technical manager.

Asha Al-Muslim is our development producer. Chris Zinsley is our deputy editor. And Falana Patterson is the head of news audio for the Wall Street Journal. For even more, head to WSJ.com. I'm Telos Demos. And I'm Miriam Gottfried. Until next time. Should we expect fewer streaming platforms or higher costs?

Yes. In 30 seconds or less, is my dog's barking. Hold on a second. Hold on. This is a crazy day. Thank you.