Media is a business about dreams, and Larry Ellison’s son is dreaming big. This might explain why the case for Paramount Skydance to buy Warner Bros. Discovery is so incoherent.
In October, Warner Bros. put itself up for sale, leading to a number of bids. The two we are concerned with are a bid from Netflix and another from two nepo babies: David Ellison and Jared Kushner. David Ellison is the head of Paramount, but most famous for being Larry’s son. Jared Kushner is most famous for being Donald Trump’s son-in-law, though he also got his start in business by taking over his felon father’s firm when Charles was in prison; his firm is involved in the financing.
Netflix won the bidding. Warner Bros. made an agreement to sell most of its business — the studio part — to the streaming giant for $83 billion, including debt. (That figure is a bit more than five times Paramount’s market cap.) Warner Bros. felt that spinning itself into two companies, the Netflix acquisition and the cable networks, gave shareholders a value of $31 to $32 a share, rather than the $30 a share Paramount was offering, according to The Wall Street Journal.
If the elder Ellison is serious about this, I’d like some of what he’s smoking
Nonetheless, Paramount announced a hostile bid to take over Warner Bros. for $30 per share, which puts the total at $108.4 billion, including debt. Apparently, Paramount has been after Warner Bros. for the last two years, even before Ellison père et fils entered the picture. But now, it’s backstopped the deal with the Ellison family trust, which includes a war chest of about 1.16 billion Oracle shares. The current offer from Paramount is not the “best and final” — at least, according to The New York Times — so this dumb fight is likely to drag on for a while.
Let’s pause here and notice that what Paramount is doing doesn’t make any fucking sense. At least, not business sense. Maybe I can see a case for consolidation among the streamers,…