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And why David Zaslav is the winner.

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A lot to cover today.

The body of this actual e-mail will only have my notes on Paramount outbidding Netflix for Warner Bros in a $110B deal.

Find the rest of the issue at this link:

• 6 Takeaways From Citrini's Viral AI Doomer Article (& Rebuttals)
• Norway's Sporting Secret Sauce 
• Anthropic vs. the Department of War
• ...and so many wild posts (including maybe the greatest Zillow bidding war ever)

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Warner Bros Agrees to a $110B Merger With Paramount (and Netflix Gets a Fat $2.8B Termination Fee)

What a roller coaster!

Paramount and the Ellisons have officially outbid Netflix to buy Warner Bros. studio and cable assets. The deal values Warner Bros at $82B and Paramount will also take on the company’s ~$30B in debt.

To close the deal, the combined Paramount and Warner Bros will see a net debt of $70B…which is why they are already talking about $6B in cost savings “synergies” and — after briefly freaking out about Netflix’s commitment to the theatre system — Hollywood actors, agents, writes and directors are now freaking out about Paramount cuts (Ellison has committed to release a juicy 30 films a year).

The new Ellison empire is formidable. It has CNN and CBS News. Dozens of TV networks. All of March Madness. The UFC. And IP galore:

• Paramount: Star Trek, Mission: Impossible, Transformers, SpongeBob SquarePants, South Park, PAW Patrol, Top Gun, and the “Sheridan-verse” (Yellowstone, which they keep even after the director moves to Universal).
  
  
• Warner Bros: DC Universe (Batman, Superman, Wonder Woman), Harry Potter, Lord of the Rings, The Matrix and the legendary HBO (Sopranos, The Wire, Succession, Silicon Valley etc)

Please please please give us a mash-up between South Park, The Sopranos and Paw Patrol. 

Anyway, as discussed on the The Town podcast, this deal will have to still go through anti-trust review but the Ellisons closeness to the current White House suggests they’ll pull it off. European and state regulators can still gum it up, though.

With a combined 219m subscribers (some are def double counted), Paramount+ and Max can legit give Disney+, Netflix and Prime a run for their money.

The undoubted winner of all: Warner Bros Discovery CEO David Zaslav. He walks with a $500m+ golden parachute payout AND got Warner Bros to pay Netflix a $2.8B deal termination fee out of its coffers (BTW, $2.8B was straight profit and equal to 25% of Netflix’s entire profit of $11B in 2025).

That’s a solid consolation prize for co-CEOs Ted Sarandos and Greg Peters…and they could do the funniest thing ever with those funds.

Back to Zaslav, he originally ran the Discovery cable network between 2006 and 2022, overseeing a GOAT-level run on personality-driven reality TV delirium: Deadliest Catch, Mythbusters, 90-Day Fiancee, Jon & Kate Plus 8, Property Brothers and Fixer Upper etc.

When A&T failed its Warner Bros project, Zaslav was waiting to level up and make real hay in Hollywood.

I imagined Zaslav was thinking, “I gotta level up from this TV slop and go full Hollywood, including buying the 8-figure mansion formerly owned by Hollywood legend and Paramount producer Robert Evans…who was instrumental in getting The Godfather made.”

Well, he did all of that.

Because, in 2022, Zaslav spearheaded the merger of Discovery with WarnerMedia and became the CEO of Warner Bros. Discovery. The plan was to take Discovery’s assets and combine with with Warner’s legendary IP into a Netflix competitor.

The strategy looked bust by early 2025.

Weighed down by debt and the dying TV cable bundle, the value of Warner Bros. Discovery sank by more than half from its IPO to ~$20B.

Enter David Ellison.

Along with his father Larry’s $200B backstop, David had a mission to build a next-generation media, streaming and technology juggernaught (Oracle + a TikTok stake + Paramount + AI stuff).

Last summer, he closed a deal for Paramount and immediately set his sights on Warner Bros. By combining Paramount+ with Max, he could create a scale streaming service to take on Netflix.

As we all know, Netflix wasn’t going to let that happen lying down.

What ensued was a bidding war that saw ~10 bids over 4 months. Most of it was Paramount just pumping the price. 

Netflix's best offer was $72B equity for just the Warner Bros film and TV studio. The cable TV assets were to be spun off this fall. Paramount long held it had the better deal because Netflix was overvaluing the value to shareholders of those cable assets.

Ultimately, the potential spin off was moot. Paramount eventually pushed its offer valuing Warner Bros at $50B (including debt) to $82B of equity (and $110B enterprise value overall).

The 66-year old Zaslav was able to juice the value of Warner Bros, all while Netflix and Paramount both saw sell-offs of 30%+ (shareholders terrified by the debt).

Dude legit pulled a rabbit out the hat. 

Paramount & Warner Bros is a major player but they still have a tough hill to climb…

Read the rest of this newsletter by smashing that blue button:

• 6 Takeaways From Citrini's Viral AI Doomer Article (& Rebuttals)

• Norway's Sporting Secret Sauce 

• Anthropic vs. the Department of War
• ...and so many wild posts (including maybe the greatest Zillow bidding war ever)

Written by me, Trung Phan.

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Austin, TX 78721

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