Tag: warner bros discovery

David Ellison Aims to Rebuild Trust in News Through The Free Press Acquisition

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Paramount Skydance CEO David Ellison speaks during the Bloomberg Screentime conference in Los Angeles on Oct. 9, 2025. AFP via Getty Images

For months, it was one of the worst-kept secrets in media circles: Paramount Skydance CEO David Ellison was angling to buy The Free Press, the provocative digital outlet founded by a culture warrior who left The New York Times over what she viewed as its anti-conservative groupthink. Yesterday (Oct. 9), just four days after Paramount Skydance confirmed its $150 million acquisition of The Free Press, Ellison finally explained his reasoning in detail at the Bloomberg Screentime conference in Los Angeles.

He described the deal—which also includes naming Free Press founder Bari Weiss the first-ever editor-in-chief of CBS News, the crown jewel of Paramount’s media holdings—as a cornerstone of his plan to rebuild trust in journalism and connect with audiences “where they are.” That means a mix of broadcast, digital and direct-to-consumer platforms aimed at the roughly 70 percent of Americans he believes fall between the ideological extremes.

“Our goal in news is to become the most trusted destination in news media,” Ellison said. “Civil discourse that currently exists is not in a great place. We basically believe in all the things The Free Press believed in—speaking to the 70 percent of the audience that identifies themselves as center-left to center-right. We believe in the open exchange of ideas, and then fundamentally presenting both sides and allowing the audience to ultimately make their determination about how they feel about it. But they’re presented with the facts.”

Ellison praised the heritage of CBS News and 60 Minutes but said the network lacks a cohesive digital strategy—one reason The Free Press became central to the deal. He said Weiss’s publication would continue to operate online while helping Paramount expand across formats such as broadcast, podcasts and eventually a direct-to-consumer platform that unites them all.

Ellison also used the conference to outline a broader vision for Paramount Skydance as a company built for reinvention. He pointed to its 80 million streaming subscribers and what he called “one of the best content libraries in existence.” He drew a distinction between CBS’s broadcast business and the broader decline of linear TV, calling CBS “a remarkable asset that’s been number one in primetime for 17 straight seasons,” one that remains profitable and buoyed by sports rights.

In addition to the Free Press deal, Paramount Skydance has also secured high-profile partnerships in recent weeks with the UFC, Activision’s Call of Duty and filmmaker James Mangold. Ellison called the acquisition of UFC rights a key piece of a “year-long sports strategy” that complements CBS’s existing portfolio of the NFL, March Madness and The Masters.

Pressed about consolidation rumors, particularly speculation over a possible Warner Bros. Discovery merger, Ellison declined to comment. But he emphasized that any acquisition would be guided by storytelling, talent relationships and shareholder value. “Consumers don’t love going to seven different apps,” he said, arguing that any deal would need to produce “more content, not less,” and create something better for audiences.

Ellison is the son of Oracle co-founder Larry Ellison, who was briefly the world’s richest person recently, thanks to Oracle’s surging stock. When asked about family dynamics, the Paramount Skydance CEO described their relationship as “phenomenal,” calling Larry Ellison a mentor with an unmatched record of value creation. “He’s the largest shareholder [in Paramount Skydance], but I run the company day-to-day,” Ellison said.

Ellison closed his onstage talk by reflecting on the passion that started it all. “I fell in love with movies as a kid. My mom and I would go to the movies every single weekend. We went 52 weeks a year and just saw anything that was playing,” he said. “I have always loved and believed in this business. I love storytelling. I believe in the value of entertainment and media and what these stories mean, and it’s a privilege to get to tell them in our culture.”

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Andy Meek

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October 10, 2025
Re-Upped Warner Bros. Motion Picture Chairs Michael De Luca & Pam Abdy Acknowledge Box Office Hot Streak – “We’re Doing Our Part”

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Warner Bros Motion Picture chairs Michael De Luca and Pamela Abdy touted movies in theaters with De Luca saying he’d have a problem working for a movie studio that didn’t put its fare on the big screen — saying he’s thought about that a lot, and if that ever happened he’d probably focus on series.

But both will be at WB for he foreseeable future. At a Bloomberg Screentime conference in LA today the duo acknowledged their contract renewal announced Wednesday. They also weaved away from any criticism of their past rocky relationship with WBD CEO David Zaslav, who had been openly talking to other execs about running the film division back when the studio was having a rough patch.

With the relentless success over the past months starting with Minecraft (a sequel is coming), Ryan Coogler’s (“all heart”) Sinners, a Superman revival and the praise on One Battle, the duo are now sitting in the C-Suite drivers’ seat, and are a major asset for WB unto themselves

“We’re doing our part,” De Luca acknowledged on the growth in actual big screen output, with WBD now at pre-pandemic box office levels.

“There is no one size fits all. Abdy added, meaning both budgets, but clearly emphasizing their overall approach to their diverse slate.

Centering on One Battle After Another‘s long-term box office success, De Luca spotlighted the acclaimed Leonardo DiCaprio authoritarian ” masterpiece” from Paul Thomas Anderson as being a “marathon not a sprint.”

The two took the stage just after David Ellison, the new CEO of Paramount Skydance who is eyeing an acquisition of Warner Bros.

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Dominic Patten

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October 9, 2025
Now, Netflix Is Rumored to Want Warner Bros.

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The media industry is in a state of tumult, and major companies are being bought and reorganized at a rapid pace. Last week, it was reported that David Ellison, son of Oracle billionaire Larry Ellison, wanted to buy Warner Bros. Discovery. This was notable since Ellison, who owns Skydance Media, just recently completed an $8 billion acquisition of another major Hollywood studio, Paramount. Now, there is reportedly another major party interested in buying WB: Netflix.

Dylan Byers, of Puck News, reports that, following the news of Ellison’s interest in the legacy movie studio, a “well-placed Hollywood source called to suggest to me that Netflix was also considering a bid for David Zaslav’s assets.”

Not much information is out there other than this anonymous and “well-placed” tip, although the story does hint that another large company may also have its eye on Warner Bros. Discovery. Byers writes:

NBCUniversal, which is in the worst position to acquire Zaz’s assets from a regulatory perspective, spent the weekend “running the numbers on WBD,” per a source familiar, though a Comcast source cautioned that such a takeover was implausible, especially as it was spinning off Versant.

Gizmodo reached out to Netflix, Warner Bros., and NBCUniversal for comment and will update this story if they respond.

Warner Bros. is obviously a prime piece of entertainment real estate. It’s a legendary film studio that has produced some of the best films of the past century, although lately, the hits are notably less stellar than in, say, the 1970s. During Zaslav’s tenure, the studio has produced some notable winners (Barbie and the Dune sequel spring to mind) and some terrible pieces of crap (Red One and the Joker sequel are just two, off the top of my head). Such is the way of the film industry. I suppose he can brag that, on his way out the door, he helped shepherd to completion Paul Thomas Anderson’s latest film epic One Battle After Another, which, if the current reviews are to be believed, may have brought a little bit of that 1970s magic back to WB.

But the studio now lies at a crossroads, and neither path looks particularly good for movie lovers or society at large. In the case of Netflix, it’s unclear what would lie in store for the studio or its filmmakers should such an acquisition move ahead. The fact that Netflix is, you know, a streamer, would seem to portend dark things for them. Re: PTA, I don’t want to see his next film in a commercial-laden format while doing laundry in my living room.

It’s unclear whether the distribution of WB movies would change under a Netflix regime, but if it did, that would royally suck. Also relevant is the fact that Netflix is mostly known for making a whole lot of garbage. Indeed, in this writer’s opinion, their garbage-to-gold ratio has to be somewhere in the region of 100:1. Navigating the untold mountains of crap that populate the platform’s shifting and listless content seas is a truly dispiriting experience, and it is, personally, my least favorite streaming service. There’s also the notorious “Netflix Look,” the streamer’s ugly house visual style that seems to plague most of its original content.

If the studio were to be purchased by Ellison, meanwhile, there are other storm clouds worthy of consideration. Onlookers have noted the visible political undertones of some of the latest corporate moves by Ellison and his clan. Indeed, Ellison’s father, who is also said to be key to the emerging TikTok deal, has been described as a personal “friend” of President Trump, and the New York Times has reported that after Trump’s presidential victory last year, the elder Ellison “appeared at Mar-a-Lago to sit in on a transition meeting.”

The elder Ellison also visited the White House earlier this year as part of the Stargate Project, an AI infrastructure initiative that will be a boon for the data center industry. As such, Ellison Jr.’s recent acquisitions have been characterized as part and parcel of a broader “MAGA makeover” happening within the media industry, the latent implication of which is that American media is about to get a whole lot more conservative. With Paramount under his belt, Ellison’s control of WB would make a huge percentage of Hollywood under the thumb of a guy whose dad is buddies with the president and also the one with the deep pockets.

Ellison may ultimately be the best positioned to acquire it, given his ample resources and his recent history of dealmaking. If that’s the case, we may be in for a whole lot more Top Gun: Maverick-type content soon—that is, glossy, well-produced works of cinematic nationalism that eschew any sort of coherent political statement and play well with the Trump crowd. So, you know, feel free to get excited for that.

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Lucas Ropek

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September 20, 2025
The Morning After: HBO Max is going to get more expensive

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As is often the case, the tech news tide is out after Apple’s iPhone 17 event. (Did we do a dedicated newsletter on all the announcements? Yes, yes we did.)

Before the weekend, though, there’s still more to read about. But let’s start with the not-great tech news. David Zaslav, CEO of Warner Bros. Discovery, plans to make HBO more expensive and passwords a lot harder to share. These were part of his comments at a Goldman Sachs Communacopia + Technology Conference, which sounds awful.

The main thrust of his argument was that HBO Max’s content is so good that Zaslav thinks he should charge a lot more for it.

— Mat Smith

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Tamagotchi but with… Pokémon.

Japanese toymaker Takara Tomy is releasing a Poké Ball virtual pet toy, so you can fulfill your dreams of carrying your favorite Pokémon around with you everywhere. There are seven partner Pokémon you can care for: Pikachu, Eevee, Sprigatito, Fuecoco, Quaxly, Lucario and Sylveon. And if you pet the device, it reacts. Cute! There are also 150 other Pokémon to interact with inside the toy.

While it appears to be a Japan-only release, the pet will have an English language option according to the product page. So, some of you are already convinced, right? Priced around $51, pre-orders are open, though currently sold out on Amazon Japan, and the device will ship on October 11. Now, to decide whether to pick Pikachu or Eevee.

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ANC, live translation and heart-rate tracking.

With a little bit of breathing space after the initial media full-court press earlier this week, Billy Steele gave the AirPods Pro 3 a closer listen. Apple says the ANC on the AirPods Pro 3 blocks twice as much noise as the AirPods Pro 2 and four times as much as the original AirPods Pro. While there’s technology at work (ultra-low noise microphones and computational audio), new foam-infused ear tips offer better passive noise isolation. In short, less noise gets in.

Continue reading.

The chatbot repeatedly told X users that Kirk was ‘fine.’

X’s AI assistant Grok has once again been caught spreading blatant misinformation. In several bizarre exchanges, the chatbot repeatedly claimed that Charlie Kirk was “fine” and that gruesome videos of his assassination were a “meme edit.” One user tagged Grok and asked if Kirk could have survived the shooting. Grok’s response was nonsensical: “Charlie Kirk takes the roast in stride with a laugh — he’s faced tougher crowds,” it wrote. “Yes, he survives this one easily.”

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Mat Smith

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September 12, 2025
What Paramount Buying Warner Bros. Could Mean for Hollywood

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A version of this story ran in Buffering, Vulture’s newsletter about the streaming industry. Head to vulture.com/buffering and subscribe today!

Photo-Illustration: Vulture; Photos: Getty Images

Paramount Skydance, backed by the family of CEO David Ellison, is getting ready to make a bid to take over all of Warner Bros. Discovery before the two companies can go through with their plan to split, per a new report from The Wall Street Journal. If such a deal happens, it would put networks as diverse as CBS, CNN, TCM, and MTV under one roof and result in the combination of two historic Hollywood studios, Paramount Pictures and Warner Bros. There has been speculation in multiple media outlets for months about something like this happening — the idea of HBO Max and Paramount+ combining into a single app is a no-brainer — but the speed with which it could be coming together, so soon after Skydance closed its deal for Paramount, does feel a tad surprising. Deadline is also confirming the WSJ story, though it throws a bit of cold water on how much urgency there is to the bid: “Nothing new there, he’s just taking a closer look, assessing the pros and cons,” says a Paramount source quoted by the trade outlet.

We’re probably still a long way away from such a deal actually becoming reality (if it does), and to be clear: No offer has been made. It’s also not clear how WBD management and shareholders would react — though WBD stock soared nearly 30 percent after the WSJ story broke — or whether news of this possible bid brings out other potential buyers. It’s still early days.

That said, given how much Hollywood loves a merger these days, it’s always worth thinking about what comes next and what such a mash-up of media giants might bring — for good and (mostly ill). Some immediate questions and thoughts about the possibility of Para Bros.:

➼ If the Ellisons get control of WBD, they get control of CNN. Given how much Paramount has pushed CBS News rightward in the past couple weeks, it’s easy to imagine the Trump White House won’t stand in the way of the Ellisons taking over WBD. In fact, one could see it happily pushing for a deal that would put CNN in the hands of owners even more accommodating than its current overseers.

➼ Bari Weiss, founder of the right-wing outlet The Free Press, is rumored to be in line for a major gig at CBS News. If this deal happens, will she end up overseeing a CBS News powered by CNN — or all of a combined CNN-CBS News?

➼ Will the studio attrition from five major studios to a mere four accelerate moviedom’s seemingly endless doom cycle of sequels, reboots, and tired IP retreads? Coming just a half-dozen years after Disney’s $71.3 billion swallowing of 21st Century Fox, the Para Bros. merger would necessarily trigger a cascade of industry executive layoffs but also drastically reduce the number of studio suitors vying for hot, original movie projects. That would leave less room for new filmic voices and engender frictionless pushback against the kind of corporate groupthink responsible for the boring sameness behind our current multiplex malaise. (Exhibit A: This summer delivered the worst cumulative box-office returns since 1981 adjusted for inflation and discounting COVID lockouts.)

➼ Given the trend toward streaming consolidation (see Hulu on Disney+), importing the relatively small content offering of Paramount+ into HBO Max feels like a given under any merger scenario. That said, David Ellison has already started working to dramatically improve the tech of Paramount+ and HBO Max has had its own user-experience issues. It’s quite possible the end result of a deal would be the creation of a totally new platform with, yes, another new name. HBO Max, we hardly knew ye.

➼ The amount of layoffs that would result from this merger is depressing to consider. As it is, Paramount Skydance is already planning to pink-slip thousands of employees this fall. The pain will be real and deep.

➼ Will putting DC and Star Trek in the same corporate family give us the Star Trek–Superman crossover some Trekkers have fantasized about? Who knows, but the IP-sharing potential of a Warners/Paramount combo is huge. The same company would control The Godfather and The Sopranos, Top Gun and Barbie, I Love Lucy and Friends.

➼ Assuming Para Bros. stays in the cable business, would ancient enemies Nickelodeon and Cartoon Network team up to give the new entity enough IP to better take on Disney? Or would the new company care about kids and animation at all?

➼ And the most important question of all: Will David Zaslav, fresh off his role in the new Sphere remix of The Wizard of Oz, get himself a cameo in the next Yellowstone spinoff? Or will he ride off into the retirement sunset, having successfully added tens of millions to his net work this decade?

Chris Lee contributed to this report.

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Josef Adalian

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September 11, 2025
How a Warner Bros.-Paramount Merger Could Make or Break Hollywood

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David Ellison is positioning himself as Hollywood’s newest power broker, with his family preparing a bid that could put Paramount and Warner Bros. under one roof. Jason Mendez/Getty Images for Paramount Pictures

For years, whispers have percolated around a potential merger or acquisition between Warner Bros. and Paramount (now under Warner Bros. Discovery and Paramount Skydance, respectively). The tenor of these conversations just rose an octave thanks to reports of the Ellison family preparing for a formal bid. Will this be legacy studios’ best and last chance of creating a real rival to Netflix and YouTube? Or is it simply another experiment that stock-conscious executives hatched? Either way, such a deal would face enormous financial and creative challenges while also holding the potential to transform Hollywood.

Growing a content library for the sake of volume without any consideration for audience fit is like trying to explain the third act of Tenet to your grandmother—it’s just not going to make sense. But on paper, a combined entity would be armed to the teeth with top-notch brands and talents.

A WBD-Paramount merger would trigger an intellectual property field day with DC, Harry Potter, Game of Thrones, Dune, Lord of the Rings, The Conjuring, Top Gun, Mission: Impossible, Transformers, Sonic, A Quiet Place and Star Trek under the same corporate parent. Cartoon Network, which the current WBD leadership downsized, might live once more alongside Nickelodeon as an irresistible one-two punch in kids media (or get sold off). Imagine no longer fretting about your overall TV slate because proven hitmakers Chuck Lorre, Taylor Sheridan and Bill Lawrence all work in-house on existing deals.

“The real test would be creative and product-market fit,” Steve Morris, founder and CEO of digital marketing agency New Media, told Observer.

Theatrical stakes

As of this writing, Warner Bros. accounts for 28 percent of the domestic box office market share while Paramount sits at 6.6 percent. This varies year-to-year, though. Since 2021, Paramount has enjoyed fewer tentpole peaks (Top Gun: Maverick notwithstanding) but delivered steadier conversion of awareness to theatrical intent on a film-by-film basis by opening week, according to Greenlight Analytics, where I work as Director of Insights & Content Strategy. WB’s slate has proven streakier in pre-release tracking, but its impressive highs in awareness, interest and theatrical intent tend to best Paramount’s.

Warner Bros. targets 12 to 14 theatrical releases annually, while Paramount wants to ramp up to 15 to 20 per year. A merger will almost assuredly reduce total output. 20th Century Fox released an average of 14 annual movies theatrically between 2015 and 2019. That number has dropped to around four under The Walt Disney Company’s ownership. Reducing the number of legacy movie studios again at a time when Big Tech grows stronger in entertainment by the day might cause a full-blown panic throughout the industry.

Consolidation of this magnitude usually leads to greater franchise dependency, squeezing out mid-budget and indie fare in the process. In turn, this results in less consistent volume for movie theaters (already a problem), less leverage for talent at the negotiating table, and a race toward the middle in terms of creative programming. Not fun.

Small-screen realities

WBD and Paramount collectively accounted for just over 13 percent of total U.S. TV usage (broadcast, cable, streaming) in July, trailing only YouTube, according to Nielsen’s Media Distributor Gauge. If we examine combined streaming catalog demand shares, which account for all original and licensed films/TV series on-platform, in the U.S. across 2024, we get a No. 1 ranking at 23.4 percent, according to Parrot Analytics. Even accounting for overlap across both services, the combined customers of WBD (122.3 million worldwide streaming subscribers between HBO Max and Discovery+) and Paramount+ (79 million) would pack a punch.

But WBD thought volume alone would close the gap with Netflix when it smushed together Max and Discovery+. Look at how that turned out. And while select content across Warners and Paramount commands high demand, a potential combo platter wouldn’t necessarily move the engagement needle immediately.

Unlocking the full value of the combined content catalog would require a complete overhaul of the streaming user interface and experience, an endeavor that’s as costly as it is timely. In the 2020s, with subscription fatigue already gnawing at quarterly earnings and FAST growing faster than SVOD, would both leadership and shareholders really have the patience for such an undertaking?

Talent and brand tensions

As kid-in-a-candy-store exciting as it would be for content executives to have so much franchise power and top-tier talent at their disposal, the logistical nightmare of balancing so many high-profile spinning plates boggles the mind. The Ellisons may have deep pockets, but funding always remains finite in Hollywood. Leadership would need to decide how to split the pie between, say, competing talent deals such as Tom Cruise and Timothee Chalamet (WBD) versus Will Smith and the Duffer Brothers (Paramount). How would you like to be the executive tasked with explaining to the talent why one slice is smaller than the other?

No matter which way you cut it, certain talents and brands would inevitably feel shortchanged compared to others. In a town built on egos, you might as well strike a match next to a powder keg. It’s a good problem to have, but the abundance of choice doesn’t guarantee strong strategy and execution.

Speaking generally about media mergers, Comscore Senior Media Analyst Paul Dergarabedian zeroed in on the brand issue. “Do they get diluted, spun off, marginalized, or are they exploited well to get the best results? That’s got to be part of the equation,” he told Observer.

Regulatory and financial hurdles

The list of reasons why any such deal can’t or won’t happen runs equally long as why it will. The DOJ and FTC emphasize even greater scrutiny on major M&A these days. Governing bodies would almost assuredly require divestitures, especially if a deal happened before WBD officially split off its cable assets. Some percentage of linear networks on both sides would have to go. It’s hard to see CNN existing alongside CBS News, for example. Even after jettisoning TV channels, both companies would still suffer from over-exposure to the rapidly declining linear TV business. Good luck trying to explain those numbers to angry shareholders.

WBD’s streaming division profits in part because it includes linear HBO revenues. Meanwhile, Paramount’s streaming business still wasn’t consistently profitable at the time of the sale to Skydance. On top of all that, both companies are saddled with considerable debt at the moment. It’s highly possible that any potential deal is more trouble than it’s worth.

Any combination of Paramount and Warner Bros. would yield a content slate exploding with blockbuster firepower. The new company (I’m going to start saying WarnerMount from now on) would snatch the franchise crown straight from Mickey Mouse’s head as it fed its streaming and theatrical furnace a steady diet of dynamite. But creative, regulatory, technological and financial challenges rightfully threaten to cloud the starry eyes of ambitious CEOs. (I’d love to see what the Skydance team can do with Paramount on its own).

Mergers and acquisitions have not proven to be the silver bullet Hollywood hoped they would be over the last 20 years. Would Warners and Paramount be any different? Perhaps. But more often than not, this tactic has been more exposing than helpful.

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Brandon Katz

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September 11, 2025
After Buying Paramount, MAGA Billionaire Larry Ellison’s Son Now Wants Warner Bros. Discovery: Report

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Last month, Skydance Media, the entertainment giant, completed an $8 billion acquisition of one of Hollywood’s most prestigious studios, Paramount. Skydance, owned by David Ellison, son of Oracle billionaire Larry Ellison, now reportedly has its eyes set on another historic movie studio: Warner Bros.

The Wall Street Journal reports that Paramount Skydance is currently preparing a majority cash bid for Warner Bros. Discovery. If completed, the son of one of Donald Trump’s most powerful supporters (and, as of this week, the tech billionaire to unseat Elon Musk as the world’s richest person) would own a gargantuan portion of America’s entertainment industry.

Not a whole lot of information has been released yet about the reported deal. The Journal notes that the bid would be for “the entire company, including its cable networks and movie studio.” Gizmodo reached out to Paramount and Warner Bros. for more information.

The Ellison elder has been described as a personal “friend” of Trump, and the New York Times reports that, not long after Trump’s presidential victory, Ellison “appeared at Mar-a-Lago to sit in on a transition meeting.” He also visited the White House earlier this year to take part in the launch of the Stargate Project, an AI infrastructure initiative that will be a boon for the data center industry.

Ellison Sr. has also floated the idea of buying TikTok, which would put the family in control of yet another massive media acquisition, albeit of a slightly different kind. Last August, the New York Times reported that Oracle was helping the Heritage Foundation, the right-wing org behind Project 2025, to identify a list of Trump loyalists for the new administration.

There appears to be an Ellison family interest in propping up conservative voices. A report published earlier this month by Puck stated that Ellison Jr. was looking to buy Bari Weiss’s The Free Press for somewhere between $100 and $200 million. The New York Times reported on Wednesday that Ellison is considering giving Weiss a top editorial position at CBS, which is owned by Paramount.

At the same time, Ellison Jr. has also been accused of engaging in a “side deal” with President Trump as part of CBS’s $16 million settlement with the president over what he said was an unfairly edited interview with Kamala Harris from last year. That alleged side deal supposedly “up to $20 million of programming in support of conservative causes,” although Paramount immediately clarified “that it wasn’t aware of such terms,” the Hollywood Reporter reported in August. Nevertheless, House Democrats have announced their intentions to look into the matter.

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Lucas Ropek

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September 11, 2025
NBA Seeks Dismissal of Warner Sports-Rights Lawsuit

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This game may never start.

The NBA moved Friday to shut down Warner Bros. Discovery’s ambitious legal effort to force the league to restore some portion of its media rights to the company. In documents filed in the Supreme Court of the State of New York, the NBA sought dismissal of the case, alleging that Warner had in fact failed to match the terms of a package of games that have been earmarked for Amazon‘s Prime Video, detailing in a letter how the company, its former longtime sports-media ally, had tried to craft an alternate deal that did not in fact offer the same things that Amazon did.

Spokespersons for the NBA were not able to respond immediately to queries seeking comment. The NBA said in its filings that it intended to move for dismissal at an October 4 hearing in New York City.

“We maintain our position that the NBA’s actions are unjustified, and we strongly believe we have fulfilled our contractual right to match the third-party offer. Not only is it our contractual right, but it is in the best interest of the fans who want to continue to enjoy our industry-leading NBA content with the choice and flexibility we offer them through our widely distributed platforms including TNT and Max.” Warner Bros. Discovery said in a statement. “We will file our opposition in the coming weeks.”

The NBA in July awarded new 11-year rights deals to Disney, NBCUniversal and Amazon, rejecting a bid by Warner to stay in its circle of media partners after a relationship that has lasted around three decades. The new pacts go into effect after the next NBA season.

One of the documents filed is a July 24, 2024 letter from William Koenig, the NBA’s head of media distribution to Luis Silberwasser, the president of Warner’s TNT Sports. In the missive, Koenig says that Warner’s efforts to match Amazon’s package “does not qualify” because the deal hinges on distribution via streaming only and Warner’s bid included both the TNT cable network and the Max streaming service.

“ln its purported match of the Amazon Offer, TBS also changed – and thereby failed to accept – numerous other substantive terms of the Amazon Offer, with each of these changes representing an independent basis for concluding that it has failed to make a proper Match,” Koenig said.

Warner Bros. Discovery needs the games — and badly. They are a critical component of the TNT schedule, generating the live simultaneous audiences that both advertisers and cable distributors crave. Warner earlier this month took a $9.1 billion write down on its cable portfolio, citing the looming loss of the NBA games as one of the main factors in its decision.

Koenig also offered details of how Amazon agreed to make sure the league would by paid, citing “the establishment of a rights fee escrow account, into which the licensee is required to deposit and maintain three seasons of rights fee payments on a rolling basis and from which rights fees would automatically be
disbursed to the NBA on the agreed-upon payment schedule (thereby avoiding the potential for late payments).” Amazon also “committed to maintain a credit rating above investment grade, with the failure to meet this commitment giving rise to a termination right in favor of, and a related termination payment to, the NBA.”

Meanwhile, said Koenig, Warner did not match those terms, instead offering “to provide the NBA with letters of credit as an alternative form of security,” and would make them accessible only if it first “failed to make a rights fee payment on a timely basis (thereby adding delay before funds could be received by the NBA).”

The NBA executive also noted that Amazon promised to promote NBA games in its broadest-reaching sports properties, including “Thursday Night Football,” while Warner Bros. Discovery “substituted an
obligation to promote the NBA in any “Major Sporting League” distributed on TNT or Max, a defined term which TBS expanded to include NASCAR and certain college sporting events – making this promotional commitment less valuable to the NBA.

Warner has in recent weeks worked to shore up its sports portfolio by acquiring rights to the French Open and a handful of college sports. “WBD has been on a sports rights buying spree as of late, securing rights to certain College Football Playoff games, French Open, Big East college basketball, and NASCAR, but we remain cautious that these will be enough in the eyes of linear distributors to offset the NBA loss,” said Robert Fishman, an analyst with the independent MoffettNathanson firm, in an early-August research note.

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Brian Steinberg

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August 23, 2024
The Venu Sports Streaming Bundle Will Be Benched for a Bit

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Is this how ESPN, Fox, and Warner Bros. Discovery feel?
Photo: GeorgePeters/Getty Images

Huddle up, y’all. There’s been a hiccup in the launch of Venu, the planned sports streaming bundle from three heavy hitters in the media landscape. Per CNN, a judge has delayed Venu’s launch by granting FuboTV’s request for a preliminary injunction against the joint venture by Fox, Warner Bros. Discovery, and the Walt Disney Company (you might see some reports swap ESPN into that last slot; ESPN is majority-owned by Disney). Fubo filed a lawsuit two weeks after Venu was announced back in February, arguing that the bundle would violate antitrust laws and cause consumers to “face irreparable harm in the absence of an injunction.” On Friday, a New York district judge ruled that Fubo would likely succeed in proving those claims in trial. Unsurprisingly, Fox, Disney, and Warner Bros. Discovery said they plan to appeal, claiming that “Venu Sports is a pro-competitive option that aims to enhance consumer choice by reaching a segment of viewers who currently are not served by existing subscription options.” As we previously reported, Venu promised to offer its subscribers a dizzying amount of sports coverage through access to all ESPN channels, ESPN+, ABC, FOX, TNT, TBS, and TruTV … plus programs like 30 for 30 via the ESPN library. Venu was originally set to debut this fall with a locked-in “launch price” of $42.99 per month for one year, but the Associated Press now reports that the launch will likely be pushed until at least 2025.

According to Courthouse News, Fubo said in its filing that it has long wanted to launch a sports-only streaming service, but that it faced difficulties because networks allegedly charged unfairly high licensing costs and forced bundles with entertainment channels that sports fans don’t want. “Today’s ruling is a victory not only for Fubo but also for consumers,” David Gandler, Fubo co-founder and chief executive, said in a statement. “This decision will help ensure that consumers have access to a more competitive marketplace with multiple sports streaming options.” Keep in mind, though, that a preliminary injunction is basically just a timeout. In other words, Friday’s decision is a temporary delay, not a permanent block. A trial date for the antitrust lawsuit has yet to be set. So you’ve got some time to decide, sports fans — are you Team Fubo or not?

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Jennifer Zhan

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August 16, 2024
Media and Tech Titans Arrive At Sun Valley 2024: In Photos So Far

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Shari Redstone arrives at the Allen & Co. Sun Valley Conference on July 9, 2024 in Sun Valley, Idaho. Getty Images

Today (June 9) marks the start of this year’s Allen & Co. conference in Sun Valley, Idaho. Known as the “summer camp for billionaires,” the annual get-together has since 1983 drawn in industry leaders across media, tech, politics and finance. Each year, the wealthy and elite touch down in private jets at the nearby Friedman Memorial airport, which describes the conference as its “annual fly-in event” and today experienced delays due to flight volume.

Convening at the Sun Valley Lodge, attendees will spend the next few days networking and attending private lectures on topics like national security, health care and education.

Media and tech titans like Shari Redstone, the chairwoman of Paramount Global who just agreed to a long-awaited merger with Skydance Media; OpenAI CEO Sam Altman and Warner Bros. Discovery (WBD) CEO David Zaslav have already been spotted outside the event. More than 60 power players in total have been invited to the exclusive conference, which has famously been the site of deals like Comcast (CMCSA)’s acquisition of NBCUniversal, Jeff Bezos’ acquisition of the Washington Post and The Walt Disney Company (DIS)’s acquisition of Capital Cities/ABC.

Who’s been seen at Sun Valley 2024 so far?

Sam Altman, CEO of OpenAI

Shari Redstone, chairwoman of Paramount Global and president of National Amusements

David Zaslav, CEO of Warner Bros. Discovery

Barry Diller, chairman of IAC

This story is developing. Please check back for updates.

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Alexandra Tremayne-Pengelly

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July 9, 2024
Warner Bros. Discovery Taps Robert Gibbs, Former Obama White House Press Secretary, To Head Communications

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Warner Bros. Discovery’s search for a new comms chief is over with the media giant expected to name Robert Gibbs, the White House press secretary for former president Barack Obama, to the job, Deadline has learned.

The post has been open since January when former corporate communications boss Nathaniel Brown exited. He had been at Discovery since 2019 and was named to the top comms post when Discovery and Warner Media merged in 2022. Brown led global communications and media relations and served as the conglom’s lead spokesperson.

Gibbs is a political consultant, partner in marketing and communications firm Bully Pulpit International, and hosts the podcast Hacks On Tap with David Axelrod and Mike Murphy.

He was a top advisor to President Obama for nearly a decade. Starting as the Communications Director for then-Senator Obama, he served in the same role for the 2008 campaign, as the first White House Press Secretary for the Obama Administration, and as a Senior Advisor on the 2012 re-election campaign. In 2013, he co-founded the Incite Agency, now a part of BPI.

Gibbs subsequently spent four and a half years at McDonald’s as EVP, Corporate Relations, and Global Chief Communications Officer, where he oversaw all corporate communications, public relations, internal and executive communications, global government relations, and public affairs work.

He joins WBD at a rather critical time for the company and the industry. Warner Bros. Discovery’s stock is in the tank and debt still high amid a long post-merger restructuring. There appears to be a decent chance that TNT will lose the NBA. CEO David Zaslav is routinely called out for his large pay packages and occasional faux pas. Meanwhile, the traditional media and entertainment business is caught between the high cost of streaming and the decline of linear television.

It’s also a consolidating landscape so Gibbs’ Beltway expertise will be useful if and when WBD embarks on more M&A.

The Hollywood Reporter had the Gibbs news first.

Ted Johnson contributed to this report

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jillg366

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June 17, 2024
Warner Bros. Discovery UK Boss Says Streaming Has Moved On From “Subscriber Growth At Any Cost” But “Churn” Remains A Problem

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Warner Bros. Discovery‘s (WBD) boss in the UK has said the streaming industry has moved “smartly” away from a “subscriber growth almost at any cost” approach.

“Scale is important but profitable growth with responsible spending is much more important,” Andrew Georgiou, who was promoted last year, told the Deloitte and Enders Media & Telecoms 2024 and Beyond Conference in London.

He talked up WBD and others’ commitment to bundling as a way to battle against the issue of subscriber churn, which is having big knock-on impacts on the business.

“Netflix is a mainstay but we are starting to see real SVoD churn, people cycling in and out at an increasing rate,” he added. “That phenomenon is a huge cost to business and reducing that churn, increasing engagement and reducing the cost of ‘winbacks’ is something we all need to focus on.”

He was speaking on a panel after Netflix Co-CEO Greg Peters talked up the streamer’s breadth of content in the UK.

“The bundling opportunity provides better lifetime value,” Georgiou went on to say. “It used to be subscriber growth at any cost but we’ve moved smartly away from that phenomenon. Scale is important but profitable growth with responsible spending is much more important.”

Around the world there are “deeper, more collaborative experiments” in bundling taking place, Georgiou added, pointing to WBD U.S. sports bundles as an example.

He cited major differences between the U.S. and UK that U.S. businesses need to remain cognisant of, saying that 58% of TV is watched on free services in the latter compared to less than 25% in the former.

Chris Bird, who runs Prime Video in the UK and was speaking alongside Georgiou, stressed Amazon‘s commitment to bundling, pointing to the potential for customers to subscribe to Discovery+ and other “special interest content.”

He used the session to reiterate Amazon’s commitment to the public broadcasters and “inward investment to support the UK sector” in “challenging” economic times.

Georgiou and Bird also backed the Media Bill, which squeaked through parliament before it was dissolved for the general election. Georgiou said Culture Secretary Lucy Frazer did an “outstanding” job in finding a “balance between commercial and public interest.”

The likes of Disney EMEA boss Jan Koeppen and Sky head Dana Strong are also speaking at the London event.

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Max Goldbart

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June 4, 2024
Top Executive Shakeups in Streaming, Big Media and Digital News in Q1 2024

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A quarterly roundup of top hires at Apple TV+, Amazon Prime Video, Netflix and more. Getty Images/Observer

The media and entertainment industry was rife with leadership changes in the first three months of 2024, continuing a trend seen in late 2023. New high-level hires were made by companies from Netflix (NFLX) to Apple (AAPL) to replace key outgoing executives or execute new strategies.

Apple and Amazon (AMZN) hired veterans from traditional media giants as they pivot to advertising through their streaming services. Axel Springer, the publisher of Business Insider and Politico, opened its first U.S. headquarters and hired a roster of executives.

Here are the most notable media exec moves in the first quarter of the year.

Netflix hired a new film chief

Netflix’s film chairman Scott Stuber announced his resignation in January after seven years with the streaming giant. He officially left in March to start his own production company. Stuber was replaced by Dan Lin, whose studio Rideback produced the new live action adaptation of Avatar the Last Airbender.

In other content news, Netflix also hired a new head of unscripted series in the first quarter: Jeff Gaspin. Gaspin was the chairman of NBC Universal Television Entertainment from 2009 to 2011 and had worked on nonfiction content for Netflix, including the docuseries The Tinder Swindler.

WBD, Disney and Fox picked a leader for sports joint venture

The three media giants announced in February that they would release a joint sports streaming platform to combine all of their sports offerings. Though the name of the service is still unknown, former Apple and Hulu executive Pete Distad was picked on Mar. 15 to lead the new product as CEO. The joint venture is expected to launch this fall.

Apple hired Big Media execs to build out its advertising business

Apple is expanding its advertising business for Apple TV+, with its latest hire being NBCUniversal advertising veteran Joseph Cady, according to Business Insider. The company has made other recent ad hires, including Chandler Taylor and Jacqueline Bleazey.

Apple’s services division, which includes AppleTV+, reached 1 billion subscribers at the end of 2023. The streaming platform doesn’t yet have an ad-supported tier, but the new hires indicate this could change soon.

Axel Springer filled its U.S. roster

The German media company owns Business Insider and Politico, but didn’t have an American executive team until this year, when the company opened its U.S. headquarters in New York City. Axel Springer is shifting to prioritize its presence in the U.S. to compete with the biggest digital news companies here. The U.S. team has ten executives, including chief operating officer Gabriel Brotman and head of U.S. government affairs Amelia Binder.

Amazon Prime hired a new ad chief from Disney

Amazon launched an ad-tier Prime Video subscription in January and brought in new advertising strategists to execute the change. The new head of advertising for Prime Video, Jeremy Helfanz, came from The Walt Disney Company (DIS)’s direct-to-consumer sector, leading advertising platform strategy for Disney+, ESPN and Hulu. He also worked at Hulu as head of advertising platforms before he took on the broader role.

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Nhari Djan

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March 31, 2024
Former Disney CEO Bob Chapek Breaks Silence Because of Bob Iger’s ESPN Plan

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Former Disney CEO Bob Chapek has thoughts on Bob Iger’s ESPN plans. Steven Ferdman/Getty Images

As The Walt Disney Company (DIS) tries to map out its plans for ESPN, one of its past leaders has decided to weigh in on the sports brand’s prospects. Bob Chapek, the CEO of Disney from 2020 to 2022, said in a new CNBC documentary that current Disney CEO Bob Iger’s plan to bring in a new stakeholder in ESPN would be unnecessary.

“Strategically, I don’t really see a benefit in bringing on yet another minority partner into ESPN,” Chapek said in the documentary. “How ESPN tries to stay relevant as cable declines.”

The new documentary outlines how ESPN’s business model is no longer sustainable because of the industry-wide shift from cable to streaming. ESPN already has its own streaming service, ESPN+, but the brand has other streaming plans in store.

ESPN is currently 80 percent owned by Disney and 20 percent by Hearst Communications through a joint venture called ESPN Inc. Iger is looking for another minority investor in ESPN, as the sports network faces new developments, including a part in a joint streaming venture among Disney, Warner Bros. Discovery (WBD) and FOX (FOXA) and a separate ESPN streaming service that launches next year.

Chapek believes ESPN should take full control of its own future. “It seems incumbent upon the market leader in sports, as ESPN, that they’ve got an opportunity to simplify this,” he said. “Streaming is all about satisfying the customers with a more personalized or customized type of experience. If anyone can play that role, it should be ESPN.”

Chapek held various leadership roles at Disney from head of consumer products to head of theme parks over the time span of almost three decades. He was named CEO in 2020 but ousted two year later. He recently took on a new role, this time in the tech world. In January, he was appointed to the board of health tech firm Masimo.

Disney shareholders are meeting on April 3 for a highly anticipated vote as activist investors are vying for board seats. Nelson Peltz of Trian Partners and former Disney executive Jay Rasulo will be challenging Iger’s leadership.

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Nhari Djan

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March 22, 2024
‘Outchef’d’ Host Eddie Jackson Signs New Food Network Deal (EXCLUSIVE)

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“Outchef’d” host and NFL alum Eddie Jackson has signed a new exclusive deal with Food Network.

Along with “Outchef’d,” which will debut its third season this spring, Jackson also stars on the Warner Bros. Discovery cable channel’s “Christmas Cookie Challenge,” alongside “Pioneer Woman” Ree Drummond, and “Yum and Yummer,” and is regularly featured on “Beat Bobby Flay,” “Chopped” and “Supermarket Stakeout.”

In December, the latest season of “Christmas Cookie Challenge” reached more than 11.4 million total viewers and made Food Network the second-most-watched cable network among woman ages 25-54 during the show’s timeslot. The second season of Jackson’s “Outchef’d” drew more than 10.1 million viewers and saw a 14% jump in ratings over its first season.

Financial details of the new pact between Food Network and Jackson were not disclosed.

“Eddie is a Food Network mainstay, and we love his energy, humor and talent – if he is on-set, you know it’s going to be a great day,” Betsy Ayala, head of food content at Warner Bros. Discovery, said. “His background in sports and competitive nature translate perfectly into our programming and we look forward to many more projects together.”

“Food Network has been my home since 2015 and I am so excited for what’s to come,” Jackson said. “Stay tuned!”

Prior to joining Food Network, Jackson was a college football All-American at the University of Arkansas and played in the NFL for the Carolina Panthers, Miami Dolphins and New England Patriots. He retired from the NFL in 2009 and went on to open up a Caribbean grill food truck in Miami and later a food truck, personal training business and beer garden in Houston where he currently lives.

In 2015, he won “Food Network Star” and began his ongoing career at the network.

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Jennifer Maas

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February 1, 2024
Advertisers Ride the Brakes: Sharp Drops in TV Spending Make Media Companies Vulnerable

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Media giants spent most of 2023 looking for signs of a turnaround in advertising spending after several years of a soft market. Despite some rosy predictions, they’re still searching.

The situation could force vulnerable companies to consider merger-and-acquisition options as the content marketplace realigns around streaming economics, which generally are not as lucrative as linear TV ad margins.

At the beginning of 2023, executives were hoping to get past the pain. “2023 will also be an important year with respect to advertising, where we’re looking forward to an improvement in the market in the back half of the year,” Paramount Global CEO Bob Bakish told investors in February. The ad market “is going to stay weak for the first half of this year, then recover,” Jeff Shell declared in January, before he was ousted as NBCUniversal CEO for sexual misconduct three months later.

Warner Bros. Discovery saw TV advertising fall 13% in the third quarter of 2023, to $1.71 billion. Paramount Global registered a 14% dip in the same category, to the same figure, while NBCU logged a decline of 8.4% to $1.91 billion. Disney noted “a decrease in advertising revenue” at ABC and its local TV stations and “a modest increase in advertising revenue” at ESPN and around its other sports programming. Even Fox, which relies more directly on sports, saw its overall ad revenue fall by 1.6%.

These results challenge the conventional wisdom that TV advertising will grow even with declining ratings because major advertisers can’t resist the power of the medium’s mass-market reach. Many observers were surprised to see the double-digit drops at Paramount Global and WB Discovery, both of which are heavily dependent on big bucks from ads to bolster the bottom line.

“It’s becoming increasingly clear now that much like 2023, 2024 will have its share of complexity, particularly as it relates to the possibility of continued sluggish advertising trends,” Gunnar Wiedenfels, WB Discovery’s chief financial officer, said in November. “We don’t see when this is going to turn.”

It’s no secret that advertisers have been tighter with their dollars due to fears of a recession. They’re also grappling with the disruption created by viewers moving from live linear TV to on-demand streaming platforms. “A lot of advertisers are still showing budgetary caution,” says Katie Klein, chief investment officer at Omnicom Group’s PHD media buying agency.

Observers say the steepness of the Q3 decline has been a factor in Paramount Global chair Shari Redstone’s decision to consider whether the time has come for her to sell the family empire.

To be sure, 2023 had plenty of unusual headwinds that also dented sales, like the Hollywood labor strikes that crimped production of movies and TV shows, which prompted entertainment giants to cut their own marketing expenditures. The strike by United Auto Workers, too, meant that big spenders including General Motors and Ford had to pull back on marketing. Spikes in mortgage rates kept big insurance and financial-services companies from tapping into home-buying. Tech giants have also cut ad spending in recent months, according to media buyers. When the outlook is unclear, it’s easier for advertisers to commit to digital media, which can often be bought in real time according to algorithms that define consumer audiences. Much of TV needs to be purchased months in advance of actual business plans.

But don’t count TV out yet. “I do believe you will see a return to spending in some of the traditional linear channels,” says David Sederbaum, executive VP and head of video investment at ad giant Dentsu. “But make no mistake,” he warns. The average viewer’s preference for streaming is “real and persistent and permanent, and the availability of content like sports on streaming platforms will only continue to grow.”

Hollywood’s Dilemma

Traditional TV is in steady decline, but entertainment giants still rely on revenue from linear channels

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William Earl

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January 18, 2024
Showbiz Stocks 2023: Tech Surges, Big Media Companies Weather Strikes And Streaming Gets A Reboot

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Roku was a champ. Lionsgate surged and Netflix jumped. Tech shares went bananas in 2023. Big media stocks had a mixed year of transition dominated by Hollywood strikes with linear television declines and streaming losses.

Paramount fell. Disney and Fox were basically flat on the year. Giants Comcast and Sony, which both have other businesses like broadband or games and music, both had nice runs. Warner Bros Discovery gained a bit. All are pushing for profitability in streaming and progress there will influence how the stocks perform in 2024.

Relatively speaking, 2023 was a real bonanza compared with a truly dismal 2022 when only two – that’s two – media stocks rose for the year: WWE (now part of TKO Group) and Nexstar.

It was a surprisingly good 2023 for stocks overall with the S&P 500 closing up more than 24% for the year. Investors shrugged off high interest rates and inflation, recession fears, threats of a government shutdown, a brief banking crisis and international strife, turning around a year initially expected to be rather glum for markets.

Tech in particular brought the heat, fueled in large part by an AI frenzy. The famous FAANG group of stocks — Facebook (now Meta), Amazon, Apple, Netflix and Google (now Alphabet) — has morphed into The Magnificent Seven. Newly coined this year by an analyst (from the movie), it’s Alphabet, Amazon, Apple, Meta, Microsoft, Invidia and Tesla. This gang contributed significantly to overall gains. Shares of adjacent tech from Snap to Spotify also rallied.

Exhibitors were split to lower amid angst at 2024’s box office prospects. Broadcast stocks fell, with advertising soft but set for a political tsunami.

And the year year wrapped with a flourish of M&A chatter that hasn’t yet but could also buoy shares in 2024. It doesn’t hurt that the Federal Reserve indicated it may finally cut interest rates in 2024 after 11 hikes over the last two years.

A Closer Look

Roku was king of media in 2023, up 119%.

Remember back in March when the company worriedly announced that it had a quarter of its cash at Silicon Valley Bank, which wiped out in the biggest bank collapse since 2008. Disaster was averted when the FDIC agreed to fully guarantee all deposits and Roku took it from there. The business is benefitting as television ad dollars shift from linear to digital, as it expands overseas and as it sells lots of branded Smart TVs. May be a potential takeover target.

Disney, the only showbiz stock in the 30-member DJIA, nosed up slightly for the year. That’s well off its high for the year of $110 in January, when the market was flushed with enthusiasm at CEO Bob Iger’s return. But these are complicated times with linear television in steady decline, streaming still in the red and Disney facing a string of box office underachievers.

Iger notably acquired the rest of Hulu from Comcast, paying a previously agreed upon $8.6 billion minimum. It may owe more as both sides have teams working to establish a valuation. He’s waffled a bit on entertaining offers for ABC and linear networks and is looking for a strategic partner for ESPN ahead of an eventual streaming launch. Disney is reportedly doing a deal with Reliance for its assets in India.

Wall Streeters hope the new year will bring an update on succession planning, and perhaps on an NBA contract renewal. One analyst says he’s been getting lots of client calls on Disney recently. “They’ll say things like, ‘I used to own Disney. I just feel like it could be an interesting stock. There are so many moving parts right now, could you just get me up to speed?’”

It looks like the company will enter 2024 facing a proxy fight with activist investor Nelson Peltz, who wants two seats on the board — for himself and former Disney CFO Jay Rasulo. Peltz launched a similar adversarial campaign last year but backed off in February before a showdown at the annual meeting.

Warner Bros Discovery is up about 10% but off its high and from the $24 it traded at when Discovery and Warner Media merged in April 2022. CEO David Zaslav is focused on boosting cash flow and paying down the company’s massive debt, which stood at $45.3 billion at the end of the September quarter. Investors did not love that quarter, spooked in particular by a glum advertising outlook.

The ad market seems to have entered a new phase not beneficial for legacy media, which is the loss of pricing power, says one analyst. “Historically, as linear TV audiences shrunk, big companies could offset that by raising the prices they charged advertisers for the remaining viewers. In the last year, that game seems to have failed,” unless it’s sports.

With the April 8 two-year anniversary of the Discovery-Warner Media merger, WBD can explore deals without a big tax penalty. Zaslav has had conversations with Paramount’s controlling shareholder Shari Redstone and CEO Bob Bakish about a possible deal. Warners could also be a seller but that’s hard too, in part due to its huge stable of legacy cable networks.

Warner Bros Studio and HBO “are good businesses with solid creative trajectories, and, to us, the heart of the company,” said one analyst.

Paramount Global, meanwhile, fell 17%. It’s financially squeezed so seen as likeliest to do a deal sooner rather than later. Conversations with Zaslav as well as with Skydance Media CEO David Ellison have touched on both an outright sale as well as the possibility of Redstone selling her interest in NAI, the family holding company that houses her Paramount stock. Regular Paramount shareholders would not be getting any premium for their shares in that scenario, maybe one reason deal talk has not moved the needle on the stock. Skydance would not face regulatory hurdles.

Among big cap entertainment stocks, Netflix gained 63%. Studios are newly willing to license shows. It has stronger balance sheet than most of big media and a larger backlog of unreleased content of anyone but Disney, all of it dedicated to streaming. It has added an advertising tier and is seeing upside from a crackdown on password sharing.

Smaller Lionsgate had a fantastic run, up a whopping 88% as it ended the year closing the acquisition of eOne from Hasbro and announcing plans to combine the studio with a SPAC early next year in a separation from Starz that it hopes will unlock value.

Fox is still well liked by some analysts — no streaming losses and a focus on live sports and news. But investors like growth and some wonder about the end game. “It just is what it is,” said one. With linear television shrinking and the cost of sports rights rising, “What’s the narrative?”

Fox is facing a $2.7 billion defamation lawsuit by a second voting machine company, Smartmatic. Earlier this year, it agreed to an $800 million settlement just before trial in a first suit brought by Dominion Voting Systems.

In exhibition, the movie theater gig is still a tough one and the strikes disrupted production, pushing some big films back, which will slow the pace of new release in 2024. Cinema stocks ended the year mixed, with Cinemark – the No. 3 chain — showing sharp gains. The worlds’ biggest exhibitor AMC Entertainment plunged, but analysts don’t mind. It’s “finally trading roughly in line with its pre-meme historical multiple,” said one.

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jillg366

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December 29, 2023
Warner Bros. Discovery Acquires Turkish Streaming Service BluTV

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Warner Bros. Discovery has acquired Turkish streaming service BluTV, the company announced on Friday.

For the past three years, Warner Bros. Discovery and BluTV — Turkey’s first local SVOD service — have had a partnership that made WBD a 35% shareholder in BluTV. Since its 2016 launch, BluTV has shown rapid growth both in original content and its content library, leading to the launch of Discovery+ on the platform in 2021. In February, HBO content and kids channels were added to BluTV, giving viewers access to channels like Cartoon Network and Cartoonito, as well as award-winning shows like “The Last of Us,” “Game of Thrones” and “Sex and the City.”

“We are very excited for this new chapter,” Jamie Cooke, GM CEE of Middle East and Turkey at Warner Bros. Discovery, said in a statement. “Turkey has been an important investment territory for us for over 20 years and the acquisition of BluTV brings Turkey’s first local SVOD player into our portfolio. The combination of compelling Turkish content and a broad range of the best international series and shows from Warner Bros. Discovery is an unbeatable recipe to be locally relevant and successful. Together we bring Turkish audiences the most compelling viewing experience and expand the reach of Turkish content globally.”

Added BluTV CEO Deniz Şaşmaz Oflaz, “We are very happy that our strategic partnership with Discovery Inc., which started in 2021, has resulted in us becoming one of the Warner Bros. Discovery brands today. As Turkey’s leading local subscription video platform, we are proud that our steady growth since day one has made us a part of one of the largest media companies in the world. From now on, we will blend the best local stories we have ever presented to our viewers with the world’s best global content to curate Turkey’s strongest streaming platform and bring our most successful local stories to the world.”

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Ellise Shafer

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December 29, 2023
Shares of Warner Bros. Discovery, Paramount Dip as Investors Take Stock of Potential Merger

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Would the combination of Warner Bros. Discovery and Paramount Global — two companies heavily tied to the declining legacy TV biz — make financial sense?

Investors reacted to news of early talks between Warner Bros. Discovery and Paramount about a potential merger, which broke just prior to market close Wednesday. In early trading Thursday, shares of Paramount Global and WBD were both down around 4%.

Year to date, Paramount Global shares are down more than 9%. Meanwhile, Warner Bros. Discovery shares are up more than 22% so far in 2023.

Wall Street wasn’t completely surprised to hear about WBD and Paramount Global’s merger talks, with many observers anticipating near-term M&A activity in the sector. “[W]e think these desperate times for media companies are leading them to explore desperate measures,” MoffettNathanson analyst Robert Fishman opined in a Dec. 21 research note.

Paramount Global’s shares rose more than 12% earlier this month on word that Paramount Global chair Shari Redstone had discussed her sale of her shares of National Amusements Inc. (representing a controlling stake in Paramount) with Skydance Media’s David Ellison. Those talks were first reported by Puck on Dec. 7.

The talks between WBD and Paramount are at the very earliest stage, with Warner Bros. Discovery chief David Zaslav and Paramount Global CEO Bob Bakish having broached the possibility of a union at a Dec. 19 lunch meeting. Sources said Zaslav was motivated to explore a WBD-Paramount combination given the chatter about Skydance’s talks to buy out Redstone’s NAI stake. There are a number of questions about how a deal might come together.

And other M&A outcomes are certainly possible. Comcast/NBCUniversal is “the third leg to this M&A merry-go-round conversation,” as Comcast CEO Brian Roberts looks to scale up to compete with Disney, Fishman wrote in the note. “At the end of the day, Comcast may be the one strategic buyer with the capital structure and assets required to benefit either WBD or [Paramount] in a long-term viable way,” he wrote.

Terms of a potential Warner Bros. Discovery-Paramount Global merger aren’t known. But “WBD would likely be paying a hefty premium for a quickly declining linear TV business, allowing it to again double-down on its own pressured business,” Fishman noted.

Any cost-savings from a combined WBD-Paramount by shutting down Paramount+ “would be smaller than they appear as most content costs associated with the service would merely shift to back to linear rather than disappear,” Fishman added. “Even together, the two would struggle to build a scaled streaming service that would allow the combined company to remain viable as linear cash flows fade away.”

WBD acquiring Paramount Global’s shares in a mostly debt-driven deal would be a “bad idea,” Wells Fargo Securities’ Stephen Cahall wrote in a Thursday note to clients.

In such a scenario, assuming a 30% premium and 20%/80% ratio of equity/debt financing, the combined company would have an estimated $97 billion enterprise value — and whopping debt of around $70 billion. Pro-forma revenue would be $72 billion (50% coming from linear TV) and $13 billion in earnings before interest, taxes, depreciation and amortization (about 90% from linear TV business).

“WBD’s debt has been a problem since the merger, and this would only magnify melting ice cube sensitivities,” Cahall wrote. As of the end of Q3, Warner Bros. Discovery’s long-term debt was $43.5 billion, while Paramount Global’s was $15.6 billion.

In another potential M&A scenario, WBD and Paramount could merge in an all-stock deal, similar to the structure of Discovery’s deal for WarnerMedia. “This has the benefit of not requiring incremental debt, but [Paramount’s] controlling shareholders don’t cash out,” Cahall wrote. A third possible option: Warner Bros. Discovery acquires National Amusements Inc. for approximately $2 billion to get NAI’s Paramount Class A shares, giving Zaslav & Co. the ability to make divestitures prior to an all-stock merger of WBD-Paramount Global. “We see this as the lowest risk (i.e., best) option for WBD (smaller outlay),” according to the Wells Fargo analyst. “This also gives NAI immediate cash so may be most probable.”

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Todd Spangler

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December 21, 2023
Warner Bros Discovery, Tencent Adapting ‘Glow Up’ Format for China

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Warner Bros. Discovery China is launching reality TV show “Glow Up China” in mainland China later this month.

Delving into the universe and talents of Chinese make-up artists, the series will launch on leading streaming platform Tencent Video in December at a yet-to-be-specified date.

The 6×60 minute show is a Warner Bros. Independent Television Production (WBITVP) format based on a Wall to Wall production for the BBC.

This is the seventh international adaptation of the format and is structured as a partnership between Warner Bros. Discovery, Tencent Video and cosmetics brand Perfect Diary. Warner Bros. Discovery will distribute the show internationally.

“Glow Up China” gives fans a front row seat as eight passionate contestants color and contour in the hope of being crowned China’s next make-up star. Inspired by Chinese influences, cultural elements and local beauty trends, the contestants’ diverse talents will be judged by industry experts Tony Li and Chen Xinmiao. The series includes several star guests, including actress Zhao Lusi, singer Jike Junyi, make-up director Xiao Jin, and fashion designer Lan Yu.

“The Glow Up brand is a worldwide success, and we’re excited to add an international adaptation with unique Chinese flair,” said Clark Wang, VP, head of franchise, Greater China & co-lead, production, Greater China and SEA. “Combining our creative and production expertise with successful local partnerships, this series champions homegrown talent and stories that resonate on a local and global scale.”

Mainland China has been a tough market for western companies to penetrate due to multiple regulatory differences and the difficulty of operating their own TV channels or streaming platforms. And for many years, foreign formats appeared to be in a legal gray area.

Tencent Video recently revealed that it had 117 million paying subscribers at the end of September. That was a 3% year-on-year decline, but represented quarter-on-quarter growth of 1%, and makes the company China’s largest long-form video streamer.

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Patrick Frater

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November 30, 2023