Netflix vs. Paramount: Inside the Epic Battle Over Warner Brothers

From the New York Times, I'm Michael. Baro. This is the Daily. [music]. [music]. To hear the CEO of Netflix tell [music]. it, his $83 billion offer to buy Warner. Brothers Studios will benefit everyone. >> Uh, we think this deal with Warner. [music] Brothers is good for. shareholders. We think it's good for. consumers. We think it's good for. creators. We think it's great for. [music] the entertainment industry as a.

whole. >> To hear the CEO of Paramount tell it. that same offer is a monopolistic. disaster. >> Allowing the number [music] one. streaming service to combine with the. number three streaming service is. anti-competitive. That's like saying. Coke can buy Pepsi. today. The. blockbuster deal that is rocking. Hollywood, the competing [music] hostile. takeover bid that it's inspired, and. what it all means for the future of TV. [music] and film, and for all of us, the.

viewers. I spoke [music] with three of. my colleagues, Nicole Sperling, Kyle. Buchanan, and Lauren Hirs. [music]. >> [music]. >> It's Tuesday, [music] December 9th. I want to welcome the three of you to.

the first ever edition of the Roundt. Hollywood edition. Lauren Hirs, >> hello. >> Nice to have you in the studio. And. joining us from Los Angeles and its. environs, Nicole Sperling. Nice to have. you on. >> Hello. >> And Kyle Buchanan, thanks for making. time for us. >> Hi, Michael. >> So, we usually put together these panels. to make sense of major moments in. politics and government, but the world. of business gave us a story so big and. so high stakes and so theatrical that it.

could not be contained, I believe, to a. single guest. And that story, of course, is the emerging fight over who will. control Warner Brothers Studios. this. storied Hollywood institution, which is. why we've asked the three of you on. And. I just want to explain what each of you. bring to the conversation. Nicole, you. write about Netflix streaming and the. business of Hollywood. Am I capturing. you correctly? >> Yes, that is correct. >> Kyle, you cover the movies for the Times. and the actors and the directors.

involved in making them. You brilliantly. profile them week in week out and you. cover the awards season. Does that do. you justice? That scratches the surface. [laughter] Thank you. >> And only the surface. And Lauren, you. write about corporate mergers and you've. been steeped in the details of this. particular deal. >> Yes. >> Okay. [snorts] So, just to give us a. little bit of a road map, we're going to. spend a lot of time in this conversation. talking through the implications of. Warner Brothers Discovery ending up in. the hands of either of its current major.

suitors. But I think we have to start at. the boardroom level because that's. literally where it begins. There are a. lot of moguls and multi-billion dollar. media brands involved in this battle. And so we're going to bring each of the. major players on stage one by one. Kyle, give us the cliffnotes version of the. protagonist of this story, Warner. Brothers. >> Yeah, Warner Brothers is one of. Hollywood's crown jewels. It's been. around over a hundred years. It was. founded in Hollywood's golden age. It's.

made movies from Casablanca to Batman. You know, I was on that back lot the. other day and you're walking past film. and TV history wherever you go. >> It's run by a guy named David Zazloff. who came over when Warner Brothers. merged with Discovery and it's been a. little bit of a rocky road since that. merger. >> Why? >> Well, you know, Discovery has a lot of. uh flailing television channels at this. point, a lot of cable channels, which. includes CNN, that they're trying to get. rid of in some fashion. And so there's. been an expectation that Warner Brothers.

Discovery would be up for sale or broken. up into parts. >> And of course, one of those parts is. HBO, the gold standard of television. >> Yes. >> Lauren, I think this is where you come. into the conversation because the. realization that Warner Brothers. Discovery is going to be broken up, potentially sold, brings in our second. protagonist in this story, which is. Paramount. Mhm. >> So, just give us the quick backstory of. Paramount's place in this showdown.

>> Before Paramount Sky Dance, as it's now. known, there was Sky Dance, which was. run by David Ellison, the son of Oracle. founder Larry Ellison. >> Really rich family. >> Really rich family, which is important. to this story. Larry helped finance. David's acquisition of Paramount, which. just closed a couple months ago. >> And we should just say that was a very. small brand, eating a very huge brand. very huge brand. It has CBS. It has the. studio behind The Godfather, Mission.

Impossible. It's a huge company. And all. of the sudden, David Ellison comes on. the scene as a media mogul. But what. also becomes very evident is he is a. small media mogul in comparison to David. Zazoff over at WBD, Ted Sarandos at. Netflix. What's really important right. now in media is streaming and Paramount. Plus, Paramount streaming business is a. drop in the bucket when compared to. those, >> right? The undisputed leader of. streaming is Netflix with about 300.

million. I think Paramount Plus is at. about 80 million subscribers. So, so. many fewer, >> right? And so key to Ellison's strategy, frankly, even before they closed his. purchase of Paramount was buying Warner. Brothers Discovery. So once Warner. Brothers Discovery made clear that it. might be considering some kind of option. like splitting its business in half, David Ellison pounced and he has made a. number of bids trying to buy Warner. Brothers. >> Great summary. And that of course brings.

us to Nicole Netflix which clearly. understands that Warner Brothers is kind. of in trouble, maybe up for sale and. that Paramount has its eyes on it. >> Yes. And it's the giant. It is the one. that has transformed the movie industry. Netflix was the upstart. It was the. disruptor. And when they came in and. started streaming content, it has. prompted every other studio in town to. start their own streaming business to. take on their own loads of debt in order.

to create this huge infrastructure. And. they have not been able to do it as well. as Netflix has done when it comes to. acquiring subscribers all over the. place. They also have the ethos of they. have to constantly grow, right? >> And they are constantly going into new. areas of business. They went into games. They started an advertising tier. And. they are constantly in that growth. mindset. And now they feel that the best. way to do so is to acquire this storied. legacy studio that has an incredible.

library of content that Kyle mentioned. earlier and to exploit that content in. the ways that only Netflix can. They. have the best optimization. They have. the best tech. They can do things with. content that the other streaming. services can't do. >> And Lauren, why is it that amid all. these offers, it's Netflix offer that. Warner Brothers accepts, not Paramounts? >> So, Warner Brothers board ran a process. and they spoke to biders. They asked. Paramount. They asked Netflix to tell.

them what they were willing to put up, how they were hoping to finance it. And. it came to the conclusion that Netflix's. offer, which was only for part of Warner. Brothers Discovery, its streaming and. studio business, was better for its. shareholders than the offer that. Paramount put on the table. Now. Paramount doesn't agree with that, >> right? They don't agree with that so. much. >> that they're making a hostile bid. >> for Warner Brothers Studios, which is. not all that normal in this generation.

of business. And I want you to just. quickly explain how a hostile takeover. works. >> and if it's ever seen as a good idea. >> Sure. So the way the hostel bid works is. a bidder says, "Your board isn't all. that good. They aren't doing, you know, well by you. We're going to go directly. to the shareholders and we're going to. give you $30 for each share in cash. Wouldn't you rather do that then sell to. Netflix?" And the reason why hostile. bits often don't work and we hear a lot. less about them these days is because.

companies have a number of mechanisms. that they can use to protect themselves. That being said, hostile bids can be. successful, but they're not fun. You. have a company out there screaming how. terrible your board is. >> Kind of a nuclear option. >> Nuclear option. And you know, one of the. most famous hostile bids that was. successful was actually done by David. Ellison's father, Larry Ellison, in his. acquisition of Peopleoft. So they can. work and I will tell you in my. conversations today I'm not getting the. sense that Paramount is going to be.

timid about its pursuit. >> This is the moment where I have to say. that my favorite hostile takeover of all. and Kyle I hope you appreciate this is. Gordon Gecko's takeover of Teldar paper. >> Yes, >> greed is good. >> Greed is good and greed is never ending. It is utterly rapacious and these. conglomerates that are already so. gigantic show no signs of slowing their. appetite. My my there are producers on. our team who want to make sure I have. explained properly that Gordon Gecko is. a character from [laughter] Wall Street. the movie. Now, if you needed that.

explanation, I'm frankly sad for you. I. want to discuss what the world looks. like if either of these companies end up. taking over Warner Brothers. And I think. we should start with the version where. Netflix takes over Warner Brothers. because that's the deal that's already. been announced and is in the works. So. Nicole, what does buying Warner Brothers. precisely do for Netflix and its 300. million subscribers given this crown.

jewel library that it has? How's it. work? >> Well, it will initially give them. additional subscribers when you include. the subscribers from HBO Max. They say. that they have about a 75% overlap when. it comes to subs, but that still will. increase their subscriber base, especially in the US where they already. feel like they're pretty saturated. It. also allows them to go into two. different businesses that they're not. currently in. Yes, they make television. shows, but they don't have a television.

studio, and they're not able to sell. television shows to other entities, which is something Warner Brothers does. all the time. Ted Lasso that you see on. Apple TV, that's a Warner Brothers. television show. So, they can go into. that business as well. They also are. going into the domestic and. international theatrical movie business, which is something they have never. wanted to be in, much to the chagrin of. many movie directors who want.

desperately to both be in theaters and. be on Netflix. Netflix has always just. resisted being in theaters. Their whole. thing is we want to bring our product. right to the consumers right away. And. this pesky business of theatrical. distribution, which costs a ton of money. because you have to spend a ton of money. to market movies so that people will go. to theaters, is inefficient and it. doesn't give consumers what they want. when they want it. >> Got it. So the key thing that this does. for Netflix is it beefs up its central.

business, its reason for being, which is. streaming to people at home. Just to be. very clear about that, >> there's another way to look at it, too, and it's perhaps a less charitable one. Netflix is trying to take a competitor. off of the board. That competitor is not. Warner Brothers. That competitor is. movie theaters. There is a lot of hand. ringing in the business this week about. what the loss of Warner Brothers might. do for the already somewhat tenuous.

theatrical exhibition market. >> Well, just spell that out because I I. think those of us who have come up in. the kind of posttheater world imagine. the theater to be destined for the dust. bin someday anyway. So, just walk us. through what this deal would do to the. timeline of theat's already pretty big. problems. fewer movies would come out, fewer big movies, fewer small movies, movies of every stripe. And when you're. starting to take those movies off the. board, you are left with really big gaps. in the calendar that make it kind of.

unreasonable for a lot of theaters to. operate. You look at Warner Brothers. alone, the big hits that studio had this. year, from Minecraft to Sinners to. Weapons to One Battle After Another, without those movies this year in. theatrical distribution would be a. disaster. And it's already not easy. The. pandemic, the double whammy of the. actors and writers strikes, and yes, the. SE to streaming that this deal will. almost certainly hasten just make that.

not so rosy future look even more. discouraging. And I think that a lot of. people in Hollywood don't necessarily. expect Netflix to honor the initial. terms of the deal where Netflix's owner. Ted Sarandos is saying, "Sure, we're. still going to put Warner Brothers. movies out in theaters for now, then. that will evolve. Everyone can see what. that writing on the wall means." And it. doesn't mean lengthy theatrical windows. It means eventually those movies are. going to get to Netflix as soon as.

possible and the consumer will know they. don't have to see it in theaters. In. fact, maybe they shouldn't go to. theaters at all. >> Nicole, is that a justified fear? And. let me just spell out how that fear has. been expressed. There have been letters. written from theater owners saying that. the Netflix ownership of Warner Brothers. is a disaster for them. There have been. movie producers and writers, Kyle, correct me if I'm wrong, who've written. a note, I believe it was anonymously, saying this would be really bad for. them. The whole world of people who make.

movies that end up playing in a theater. have been talking about Netflix buying. Warner Brothers as kind of end times for. the theater. And I'm curious if you. think Kyle is right that Hollywood. thinks that any assurances to the. contrary are meaningless. >> Well, Netflix has never given any. assurances that they really believe in. the theatrical experience to begin with. Ted Sarandos, the co-CEO of Netflix, has. constantly dismissed the theatrical. experience. He's called it marketing.

stunt. He's said it's outdated. He's. constantly kind of maligned the whole. thing to a point where no one really. believes him. And though now they're in. this business because they have to say. they're in this business in order to get. this deal to close, it is not a crazy. idea that they're only going to do it so. that they can get the deal through and. we'll ignore the theatrical market. moving forward. I mean, let's be clear, the theatrical market and what is. required to sell movies into theaters is.

really an inefficient business. If you. have a newcomer come in and say like, "Hey, look at how this movie business. works.". >> [laughter]. >> They would say this is ridiculous. Like. you have to spend [snorts] $50 million. to market a movie in the US so that. people will show up on opening weekend. You spend two to three years making the. movie. You spend this much to market. You can know on Saturday morning if. you're dead in the water and the movie's. been deemed either a hit or a failure.

It happens that quickly. It's like. gambling with ridiculous odds. I can see. Kyle's head exploding. I know him to be. a lover of the theatrical. >> I'm also a lover of theatrical. experience, [laughter] but as a business. proposition, it's not a great idea. On. the flip side, though, that is the way. to create cultural conversation. It's. the way to make something last for a. long period of time. You can go out and. ask lots of people what their favorite.

Netflix movie is. >> I don't think anyone has a real answer. You can go out and ask people what their. favorite Disney movie is, or you can ask. them what their favorite movie was they. saw in theaters last year. And even if. you don't see it in theaters, you know. that Barbie was on 3,000 screens and was. a huge deal. And then you at some point. will find that movie. That whole. cultural conversation really starts in. the movie theater. And while it is. completely inefficient, it's kind of the. way it's been working all this time.

Kyle, are you [clears throat] really. convinced that a Netflixowned Warner. Brothers doesn't really put any movies. in the theater? I mean, it could in. theory very easily do both, if for no. other reason, to create a cultural. conversation, to create buzz, to create. buzz for the story you end up covering. every year, which is awards season, Oscars, Golden Globes. >> Yeah. I mean, it's been amply proven. that movies that come out in theaters. tend to do better once they make their. way to streaming because there has been. that cultural conversation already. because it did feel like an event.

Movies that just appear on streaming. often make no noise whatsoever. So, you. would think it would be in Netflix's. best interest to still put movies out in. theaters. They do a very preuncter. theatrical release for their Oscar. contenders, but they'd really rather. people see those movies in the comfort. of their own home. Those are really just. done to satisfy Oscar rules and. filmmakers who are agitating to have. some sort of theatrical component. But I. think once there's no more theatrical.

component to be had if theaters really. do go the way of the dodo, that's not. going to be something that Netflix is. crying about whatsoever. >> Right. And Carl, you've actually. explained this to me. When you send a. movie to the theater, the theater takes. a lot of the money. So, if you're. Netflix, giving up whether it's 50 or 40. or 30% of your revenue to some theater. doesn't make a whole lot of sense when. your central business is sending a. streaming video to my bedroom in. Brooklyn.

>> And I think, you know, Netflix has had. movies that can and do make money if. they're released in theaters. K-pop. Demon Hunters had two sort of stunty. weekends where it made money. Certainly, the Knives Out franchise, the last two. of which have appeared on Netflix. Those. movies can make money in theaters if. they were given really robust long. releases, but I don't think it's in. Netflix's best interest to do so. They. are perfectly willing to leave that. short-term money on the table if it. guarantees them a long-term future where. streaming is dominant above all else.

>> Okay, so these are the clear downsides. of the Netflix Warner Brothers deal for. the creative community and the. theatergoer. I want to talk about the. upside for a minute. And if you're a. Netflix subscriber, I wonder if you're. now going to get more for your money. Specifically, if you're a Netflix. subscriber who also pays for something. like HBO Max, which it would acquire in. this deal. And I think it's safe to say, I'm going to do a very quick poll. Who. among us subscribes to HBO and Netflix?

Everybody. >> Yes, >> I do. >> Yep. >> Everybody. Okay. So, in theory, you. might be paying less for those two when. they're housed under the same roof, right? >> Yeah. Yeah, that's the argument Netflix. is making that that's what they will. provide consumers is a cheaper price. Whether or not that's true, you know, prices keep going up. They keep raising. prices on consumers. So, you know, they. may start with it lower and then that. price may rise. It wouldn't be the first. time we've seen that happen. [snorts]. >> Suffice it to say, there will be less. competition between the two of them when.

they're owned by the same place. If they. want the price to go up, it will go up. If they want the price to go down, >> Exactly. >> It will go down. Lauren, Netflix is. making a pretty interesting argument. about why this merger, which puts a lot. of things in one box, which is suddenly. Netflix box, is not monopolistic. And I. wonder if you and Nicole feel free to. chime on this too, can briefly summarize. Netflix's case for why this is not. something that the Trump administration.

should worry about when it comes to. antitrust. So if you look at just share. of streaming, Netflix is already a giant. and now it's acquiring an HBO, another. streamer. If you look just little. pocket, red flags all over the place. Netflix is arguing that's the wrong way. to be looking at it. They'd say when. you're thinking about what to do. tonight, where you're going to watch. content, you're not thinking which. streamer am I going to watch. You're. thinking what am I going to consume? That could be TV on the cable. That. could be Tik Tok. That could be YouTube.

that is all different kinds of things. So, it's saying that regulators when. they're looking at control of the market. should be thinking about that backdrop, not just streaming. >> Nicole, does that argument feel. compelling? >> Yes. I mean, that is Netflix's argument. According to Neielson, you know, they're. sixth when it comes to total TV. watching. YouTube is number one and they. are sixth. If they combine with HBO and. HBO Max, they'll be 9% of TV viewing.

that still puts them in this metric. beneath Disney and all of their services. which that includes ESPN and Hulu and. everything like that and basically at. the same place as NBC Universal which. counts both their linear operations like. NBC and also their cable operations too. So that's the way they want the. regulators to analyze this. Whether or. not that's the case that will be made. remains to be seen. Paramount of course. as the rival bidder is arguing that it.

is of course monopolistic and that it. does present a big threat. >> It's also important to note that Tik Tok. and YouTube don't buy scripted. television. When the first word of this. merger leaked, I was at a poker game. with a bunch of working actors and I. just saw the despair on their faces. They've already been squeezed so much. You know, these are actors who live in. Los Angeles who have to travel out of. state and out of country often just to. work. And now there are going to be. fewer places that are buying the TV.

shows and movies that they hope to work. on. [music]. Okay. So, we are about to take a break. and when we come back, we're going to. talk about whether the alternative deal, which is paramount [music] buying Warner. Brothers, is any better, whether it. comes to the creative community and its. [music] concerns about this deal and all. the antitrust issues that it raises as. well. So, we'll be right back. [music].

Okay, welcome back to our Hollywood. edition roundt. Nicole, Lauren, and. Kyle. I want you all to conjure the. second possibility that it's Paramount. that wins Warner Brothers. Somehow the. Netflix deal blows up and what it would. mean if Paramount prevails for all the. constituencies that we have been talking. about so far, the movie makers, consumers, and regulators. So Kyle, let. me start with you. who wins and who.

loses in a Paramount victory here. >> To forecast what that might look like, I'd already look at how Sky Dance has. treated Paramount since they made that. merger. You know, David Ellison has. signaled a sort of willingness to. accommodate Trump. He has installed. Barry Weiss to run CBS News. It has. taken on a little bit of a rightward. slant. There's also speculation that. part of the reason that Ellison wants. Warner Brothers Discovery at all is to. remake CNN in a matter that would please.

Trump. When it comes to the film studio, it's hard to imagine then that Ellison. would be as eager to greenlight films. like One Battle After Another or. Sinners, >> right? One Battle After Another, the. only one of the two I've actually seen, is clearly a movie about a world where. revolutionaries take on a Trumplike. administration. Yeah. And not shy about. those things at all. >> So, you're raising the spectre right off. the bat that a Paramount owned Warner.

Brothers studio becomes somewhat. potentially politically neutered and. that would be a worry for the creative. class in Hollywood. >> Yeah, absolutely. You know, directors. have to deal with enough terrible studio. notes as it is. Uh, [laughter]. I think anybody trying to get anything. that is truly iconoclastic through this. system deserves kudos and it's only. going to be all the worse if you feel. like you've got to report to the. president, too. >> But in terms of the movie business, Nicole, since you know very well how.

streaming centric Netflix is, if. Paramount were to take over Warner. Brothers, it would clearly want to put. things on Paramount Plus, its streaming. business. But it sounds like the theater. would be in less danger in that. arrangement. >> Yes, I think the theater would be in. less danger in this arrangement. They're. steeped in the traditional theatrical. business model. They have said that they. would release. >> up to 30 movies a year, which is just. all that the theaters want to hear.

That's what they want. That helps with. that cadence that Kyle was talking. about. But on the flip side, there's. more redundancies between those two. companies. They're already laying off. four to 5,000 employees. There's only. going to be more redundancies if they. buy Warner Brothers. And there's going. to be a lot more layoffs in that. scenario as well. So, from an employment. standpoint, at the studio level, you. would expect a ton of people losing. their jobs. Consolidation isn't good in.

any scenario here, and people are going. to be hurt. It's either on the creative. community side or on the studio. executive side. There's just going to be. a lot of changes. >> Mhm. No matter who ends up winning. >> Exactly. >> Lauren, what is Paramount's argument to. Warner Brothers about why it should be. seen as the ideal suitor for the whole. company rather than for just a piece of. it the way Netflix is arranging the. deal. >> It has two main arguments, a cash and.

certainty. So the the bid they put out. today is $30 in the hostile takeover. >> The hostile takeover, $30 a share to. shareholders. It's clean. It's money you. can put in your pocket, be done with it. Um the. >> And when you say clean in your p it's. it's not borrowed. >> So Netflix is using some stock. So. there's there's less uncertainty. You. don't need to worry about whether or not. Paramount's shares go up or down or how. the deal performs after it closes. shareholders can take the cash, put it.

in their pocket and walk away. Now, they. can only do that if the deal closes. So, the other thing that Paramount is. pushing really hard is regulatory. certainty. Larry Ellison, David's. father, is close with Trump and some. people thought he may have helped them. in successfully acquiring Paramount, which faced its own challenges. So much. like Netflix is going to say that you. should be look broadening the market. with which you look at streaming, Paramount is going to argue you need to. look at the evolution of the.

entertainment industry and it's now. competing against big tech like Netflix, like Google, like Amazon and it needs to. be bigger in order to compete with them. >> In other words, Paramount may be making. an argument, who knows how compelling it. will be, that what the world really. needs is a bigger streaming rival to. Netflix. So, Paramount will say, "Yes, if we do this deal, we will be a very. large studio." But guess what? Traditional studios are no longer the. only ones making content. So, look at.

the competition in that perspective, not. just among the traditional old line. studios. >> Got it. And therefore, this is not anti-. >> competitive. >> Competitive. So, I'm curious as a. consumer. I think one of the curiosities. we all have is which one of these. companies, if they were to prevail, would make better stuff. Netflix is now. kind of famous for a formula in which.

you get lots of stuff, but some of it. ain't so good, some of it is good, some. of it's really good. What happens if. they win? What happens if Paramount wins. to the quot of really really good and. garbage? >> Michael, are you familiar with a movie. called Alien versus Predator? >> No. >> There is a tagline that has outlasted. this movie and that tagline is whoever. wins we lose. [laughter].

And you know, you can say, well, maybe. buying Warner Brothers, which has put. out some all-time classics, would make. Netflix movies and television a little. bit better. That's possible, but it's. hard to say, especially as these. companies merge, what creative. executives are staying on board, what. redundancies start to happen, who gets. absorbed into what studio, and what. executives can't play fair because. suddenly they're, you know, rubbing. shoulders with somebody else who's at. their level that they don't like.

>> It's very hard to say how this will. shake out. And much as we'd like to say. that this would create better content. for a consumer and certainly HBO itself. is considered the premium destination. for television, right? >> How does HBO change if it gets utterly. absorbed into Netflix? And what kind of. independence would HBO retain if either. company acquired it? It's it's difficult. to forecast. >> Mhm. And what's interesting is Netflix.

has always admired HBO and thought it. was the, you know, gold standard that. they wanted to emulate. So you could. imagine that they will try and preserve. it in the best way possible. But then. once they realize how expensive those. development processes are that they. engage in in order to get the kind of. prestige content that seems to beat them. every year at the Emmys, right? they may. not be as encouraged to spend that kind. of money in order to make the few great. shows that do win those prizes every.

year. >> Right. Game of Thrones does not come. cheap. That's just a reality. So, Carl. and Nicole, what you're both saying, I. believe, is that if you're Netflix or. Paramount, you have some incentive not. to pay top dollar for prestige. television. And that of course would be sad for. those of us who grew up watching. not just Game of Thrones, but Sex in the. City, The Sopranos. I'm on my seventh.

full series rewatch. So that would be sad. >> Yes, you would expect these companies to. try to retain that prestige that HBO. brings, but we've already seen with the. last HBO merger with Warner Brothers. Discovery that Zassoff was all too. willing to water down that HBO brand. I. mean, how many times did that icon on. your phone or your television change. from HBO to HBO Max to just Max, then. then back to HBO? Because they couldn't.

come up with a coherent corporate. identity. Zassoff thought that HBO was. too prestigious. He wanted to water it. down with all this DRE that was imported. over from Discovery, all these reality. shows, things you'd never see on HBO, but that he thought would open that. brand up. So, as much as we might like. to think that these corporations have. more sense than to mess with the HBO. brand, time has told us that in the name. of increasing shareholder value, all. sorts of misbegotten bids might be.

taken. >> Right? And I don't know if you agree. with this, but Netflix has taught us. something really important, which is. that people will pay and keep paying for. volume over a complete devotion to. quality. >> I mean, Netflix wants both. They want. volume and they want quality. You know, it's very clear that they're still in. the awards game. The Golden Globe. announcements were this morning and they. were bested by Warner Brothers. So, I. mean, they have a big awards operation.

It's something they still believe in a. lot, but they also want to make what's. best for you. What they've always said. and they is they compete with sleep. They want you there as often as. possible. So, they will give you. Wednesday. They will give you the. diplomat. They will give you a variety. of programming just as long as you stay. on that service. >> Okay. So, I think we've reached the. moment in the conversation where we need. to give listeners a little bit of a road. map of what to expect is about to happen.

and who is most likely to ultimately win. control of this crown jewel, Warner. Brothers. So, I wonder if the three of. you can venture a responsible. journalistically informed guess about. whether a hostile takeover bid for the. entirety of Warner Brothers Discovery. might prevail, Lauren, or if we think. the existing deal in which Netflix gets. the streaming and studio part of the. business already announced is the.

likeliest outcome. Well, to the extent that passed this. precedent, hostile bids more often do. not work than they do. So, just bas do. not. So, just based off that, I would. put my metaphorical money on Netflix. >> Okay, Nicole. >> The problem with that scenario is that. um we have an unpredictable president. who's inserted himself into this. process. So, >> literally, I will be involved in this. decision, he said. >> Exactly. So, I don't know how we can use.

past as president [laughter] right now. because I just don't know what's going. to happen. I just think I'll hold and. not bet on either. >> But just just to jump in on this, Nicole, this feels important. While the. Allison seem to have a very strong. relationship with Trump, I detected in. Trump's answers over the weekend a. certain fondness for the leadership of. Netflix. When the president wants to. make life difficult for people and he's. asked a question, he usually finds a way. to make life difficult for them. And I. sensed a reluctance to denigrate Netflix.

or this deal. >> Yes, I agree. And I mean, Ted Sarandos. has made those pilgrimages to Mara Lago. He went and met with Trump in November. at the White House to lay out the deal. for him and I think [clears throat]. probably explain how he would like that. market that we discussed to be perceived. that they're a share of television and. not a share of streaming. So with all. that being said, I mean the Netflix. offer has been accepted by the Warner.

Brothers board and they've entered into. exclusive negotiations. That puts them. in the pole position and the likely. scenario would be that their bid goes. through. >> Mhm. Kyle, finally, >> I will say it's making for some tasty. unscripted drama. [laughter] Um, I'm not. eager for the season finale, but in the. meantime, they're keeping us fed. >> I wonder if we need to end this. conversation with something a little. higher altitude about where the TV.

moviegoing experience is in this moment. of consolidation. Because consolidation. is the story no matter who wins. >> Absolutely. And you know and I think. obviously uh as has been borne out by. this conversation fear about the future. of theatrical distribution is very. justified. But I think the even. biggerrained longer range take on what. is about to happen is concern about the. future of movies period. M. >> I don't know that as we move into an all.

streaming future and theatrical. continues to die on the vine that it is. in streamers best interests to invest in. movies as a 2-hour medium. They want to. capture your attention and keep you on. that service for as long as possible. And by and large, a 10-hour limited. series or a 20our reality show that. costs virtually nothing is the better. way to do it than a discrete piece of. 2-hour entertainment that can be. sequelized sometime far in the future, if at all. Other streamers have already.

realized this lesson. They're making. fewer movies than they used to, including Netflix. Uh Netflix used to. put out a new movie every week. They. don't do that anymore. I'm not sure that. that would feel much more robust if this. acquisition goes through because. ultimately does it behoove them to spend. $250 million on a Superman movie or. would they rather that be a 12 episode. series that would keep you on the. service for 12 hours [music] instead of. just two?

That is a profoundly. sad assessment [music] for the cophiles. out there, of which I'm sure there are. many. I think for a fair number of. people that's going to be sad, but it's. also just their reality of being at home. swimming in a sea of serial streaming. shows. >> Swimming [music] and maybe drowning. Lauren,

Nicole, Kyle, [music] thank you all very. much. We appreciate it. >> Thank you. >> Thank you very much. >> Thank you. >> We'll be right back. Here's what else you need to know today. Members of Congress have put [music]. language into their latest defense. spending bill that would require the.

Pentagon to provide them with the. specific orders that have led to the. deadly air strikes on boats in the. Caribbean and unedited videos of those. attacks. [music]. That requirement, supported by members. of both parties, signals bipartisan. frustration with just how little. information [music] the Trump. administration is giving Congress about. the controversial air strikes, which the. White House claims [music] are killing.

drug dealers. And on Monday, [music] the. Supreme Court's conservative majority. appeared ready to make it easier for. President Trump to fire independent. [music] government officials. Despite. laws meant to insulate them from. political [music] pressure under. questioning from Justice Clarence. Thomas, a lawyer for the president, argued that [music] Trump's authority to. fire such officials, even from. independent federal commissions, was. total.

>> How far do you go with that? Can it be. arbitrary, [music]. completely arbitrary? >> It is conclusive and preclusive. So any. review of arguably bad reasons for the. president to remove an executive officer. would be subject to the political. process. It would not be subject to. judicial review. >> However, the court's liberal [music]. justices disagreed, saying that the. White House argument would give. President Trump far too much authority. [music]. >> So the result of what you want is that. the president is going to have massive.

unchecked uncontrolled power. Not. Today's episode was produced by Claire. Tennis, Relle Bonja, and [music] Luke. Vanderpluk. It was edited by Mark George. with help from Paige [music] Cowat. Contains music by Alicia Etup and Pat. McCusker and was engineered by Chris. [music] Wood.

>> [music]. >> That's it for the daily. I'm Michael. Boro. See you tomorrow.