WSJ What’s News - There’s a New Media Giant in Town

Episode Date: October 6, 2026

P.M. Edition for Oct. 6. Skydance has ambitions to take on Netflix and other tech behemoths in streaming now that it’s clinched its deal for Warner Bros. Discovery. But WSJ media and entertainment reporter Joe Flint says Hollywood has reservations. German police have arrested the country’s former spy chief on suspicion of espionage, a crisis for the German foreign intelligence service. And workplace reporter Ray Smith says a new layoffs playbook used by companies including Nike and Meta is leaving workers in limbo for months over the future of their jobs. Sabrina Siddiqui hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Paramount closed today on its $81 billion takeover of Warner Brothers Discovery, and we tell you what's next for the new media giant called Skydance. Plus, companies are telegraphing layoffs weeks or even months in advance. It's almost like there's this drip, drip, drip scenario. So there's this limbo and suspense of people sort of wondering, you know, am I next or should I be looking for another job? And Germany's former spy chief was arrested on suspicion of espionage. It's Tuesday, October 6th. I'm Sabrina Siddiqui for the Wall Street Journal, filling in for Alex Osce.

This is the PM edition of What's News, the top headlines and business stories that move the world today. David Ellison's Skydance now controls the Paramount and Warner Brothers Studios, Paramount Plus and HBO Max, and news operations CNN and CBS News. Joe Flint, the Wall Street Journal's media and entertainment reporter, says Ellison outlined his vision for the company today. The deal has closed, and David Ellison wrapped up his town hall remarks at the Warner Brothers Stephen J. Ross Theater on their lot in Burbank. He said that he believes that there is an even larger ambition now and that this industry needs a company with the scale, resources, technology, and creative firepower to go toe to toe with the biggest players in the world.

Joe says the hard part begins now as the company integrates the two organizations. There's lots of duplication. There's synergies they've promised Wall Street of $6 billion, at least. And synergies is usually code for cuts. So they need to set their goals for their division heads on where everyone needs to be in terms of staffing, budgets, all that sort of stuff. For both these companies, they've already been through a lot of this. Remember, it's barely a year. that Ellison acquired Paramount and they went through this exercise. And then there's the business decisions that need to be made. How are they going to consolidate these two streaming services, Paramount Plus and HBO Max? And that is what is motivating this deal to build a world-class streaming service to compete with Netflix, Amazon Prime, Disney Plus, Apple, you name it.

Joe says many people in Hollywood, like actors, writers, and producers still have reservations. They fear what it means for jobs, what it means for opportunities. Paramount did a lot of work to get the support, at least, of some of the unions of movie theater owners to get this deal through. But to the Hollywood working class, this is of great concern. And David Ellison knows he's got to convince the town and the people who work in this industry that this will be a good thing for them. And that's going to be a hard task. Skydance stock started trading today, too, and the shares closed down 2.7%. The country's biggest banks are on pace to make more than $90 billion in profits this year.

That's according to New York State Comptroller Thomas DiNopoly, and that means that the bonus pool for New Yorkers in the industry is expected to get even bigger from last year's record when the average bonus on Wall Street was close to $250,000. In markets today, the S&P and NASDAQ both closed at record highs. The Dow also gained today, adding half a percent. Enthusiasm about AI is driving stocks higher, but the lopsided nature of the rally is starting to worry some investors.

Over the last month, the S&P's tech and communication sectors are up the most, while seven of the other eight sectors are down. Meanwhile, Treasury yields are taking a breather after a punishing recent sell-off in U.S. government bonds. And international oil slipped slightly to under $101 a barrel. And in economic data, August was another volatile month for the trade deficit. The trade deficit jumped 14 percent to about $106 billion, its widest gap in more than a year. The AI data center boom is driving a lot of that, since it's causing a lot of chip and computer equipment imports. But for the year, the overall deficit is about 20 percent small.

Speaking of the AI boom, Google and power company Constellation Energy have struck a 20-year nuclear energy deal. It includes upgrading 11 nuclear reactors in Illinois, Pennsylvania, and New Jersey, and doing that will add as much power to the grid as building a large new reactor. It's the latest sign of big tech's hunger for nuclear power to run its data centers, as Amazon, Meta and Microsoft have also made nuclear deals in recent months. Constellation stock rose more than 12%. The New York City Council held a hearing this week on potential regulation of AI. At the hearing, lawmakers' growled executives from OpenAI, Anthropic, Meta, and Google, like City Council Speaker Julie Menon.

No one is questioning that the incredible medical and scientific breakthroughs and innovation that AI has brought to this world. But why should the public accept that bad things should be happening? and why should AI companies get to decide what level of risk society must bear? Wall Street Journal reporter Kevin Dugan covered the hearing and spoke to our colleagues at the Tech News Briefing podcast about how city laws could affect company operations. New York has a lot of capabilities to make companies do what they want.

The city has the ability to create and enforce licenses for different companies and can use regulation to withholds. or threaten those licenses. The city can also regulate how whistleblowers are treated here. What they're trying to do is implement a kind of kill switch in case there is some sort of doomsday scenario that AI brings about. Will all these pass? I don't know.

And whether they're effective, I think that's a bigger question. But right now, in the absence of larger federal movement to regulate, New York wants to be a leader for other cities and other states to put in their own regulation. And this would create a kind of nightmare scenario for large companies because you have a lot of patchwork different rules. That was Wall Street General Reporter Kevin Dugan. To hear more of his report from the hearing and what's on New York City's AI agenda, listen to tomorrow's tech news briefing. Coming up, why there's a new layoffs limbo period for workers and how they feel about it. That's after the break.

German police have arrested Germany's former spy chief, August Henning, on suspicion of espionage and attempted treason. It's one of the biggest scandals to hit the agency since it was created back in the 1950s, and it's the first time a former intelligence chief has ever been detained in the country. Here to walk us through the allegations and what they mean for Germany's spy agency is the Wall Street Journal's Germany bureau chief Bertrand Benoit. Bertrand, what has Hanning actually been accused of doing? So Hanning was running the German foreign intelligence agency. And after that, he created a business consulting firm. And he's accused of organizing to acquire over a very long period of time,

classified information produced by the B&D, by the agency used to run, in order to use this information for his business activities. according to the allegations by the prosecutors. He was mainly gathering the information to compile in what he was producing at his consulting firm, but in one instance, he is alleged to have passed information to an intelligence officer for a foreign government. He was also in regular contact with another intelligence officer working for another government, but it's not known if he passed classified information to this person. And how big of a black eye is this for German intelligence?

This is a big setback. The B&D has had a number of leaks over the past. It has acquired a pretty bad reputation in terms of operational security. And the B&A now is currently in the middle of a reform that should increase its powers. And the problem here is that it will sound like it's trying to run before it can walk. partners of Germany abroad will be asking whether it should focus instead on securing its own house and plugging all the holes in the leaks that it suffered from. Do you think this has any impact on Germany's relationship with the United States,

especially as it pertains to intelligence sharing with U.S. spy agencies? So the B&A is quite dependent on information provided by friendly countries. The B&A has quite limited powers compared to other agencies in other countries. And when something like that happens at such a high level, it really raises doubts among other agencies and in other countries of whether they can trust that the information they give to the B&A is going to be safely kept there or if it's going to be sold for a profit or passed on to other governments. That was the Wall Street Journal's Bertrand Benoit.

Bertrand, thank you so much. Thank you. We should note that a spokesman for the German government declined to comment and that a lawyer for Henning couldn't be reached. And turning to Asia, India is facing a wave of protests over voting rights. The country's election authority has removed about 130 million names from India's voter roles in a massive cleanup effort. Opposition parties, students, and a youth movement called the Cockroats Janta Party

say the process is confusing and unfairly targeting young voters and Muslims. They pointed to issues like software flagging people for having large families. Opposition lawmakers and protesters in Udeli today called out the election commissioner. The most corrupt man in the country who is a blot on the democracy is the election. And Indian Prime Minister Narendermody's party, the BJP. The government says it's just clearing out dead or fraudulent voters. But the backlash is adding to pressure on Modi, months after another round of massive protests had forced the resignation of his education minister.

And finally, big employers like Nike, Starbucks, Meta, and Disney have adopted a new approach to layoffs, announced that cuts are coming, then leave employees waiting, sometimes for months, to find out who's actually affected. Companies say it beats blindsiding people all at once, but for workers, it can mean weeks of guessing games, quiet panic, and watching the Slack messages for clues. Ray Smith, the Wall Street Journal's reporter covering career and workplace issues, says that what companies are doing is sending a message to their investors. Some of the reasons why they're taking this approach is, one, they want to signal to the

stock market that they're serious about cutting costs. But another reason is that they're trying to sort of say, yes, we're aware that there are going to be some changes, but we just don't know. where they're going to take place or what that's going to look like. Workers that I reached out to for this story were very upset at being told there will be Laos, and then that's it, like not knowing when and who it will affect. I talked with one engineering manager at Meta. They had forecast they were going to cut jobs in April,

and then they didn't actually do it until May. And this engineering manager observed colleagues scrambling to try to finish projects, you know, in the hopes that they could save their jobs. And he told me that was the worst part of watching this go down. He resigned a day after the layoffs. It's almost like there's this drip, drip, drip scenario. Like, for instance, with Starbucks, they told employees in January that they would be cutting jobs in March.

And then it didn't really specify which roles would be impacted, only that in-store teams would be unaffected. And so there's this limbo and suspense of people sort of wondering you know, am I next or should I be looking for another job? And that's what's news for this Tuesday afternoon. Today's show was produced by Anthony Bansy with supervising producer Tali Arbell. I'm Sabrina Siddiqui for the Wall Street Journal.

We'll be back with the new show tomorrow morning. Thanks for listening.