As anyone leaked how much the Ellisons merger is going to affect the cash flow?
Kinda feels like WB is a poison fruit at this point
93
Odd-Anteater-61835 days ago
+45
What’s also poison is the foreign money loan they got to make it happen.
45
Bleakwind5 days ago
+23
Not for Saudi.. but their wealth fund has been buying up American and other media and entertainment institutions left and right.
They got golf, they have a big chunk in Disney, EA games.
At this point it’s too much work to care where their money comes from. As long as we and other people can still mock the hacksaw ass, we’re good
23
oaklandperson5 days ago
+13
Saudis are thinking of shutting down Liv Golf after 2026. They lost $600M in 2024 (poor viewership).
13
Self_Owned_Tree5 days ago
+6
And their golden boy flamed out at the Masters, too.
6
fuzzyfoot885 days ago
+10
That’s the funny part. Americans are so concerned with the billionaires and Elon becoming a trillionaire, they aren’t considering the sultans on the other side of the world have at least that much or more.
10
oaklandperson5 days ago
+9
No one has that much money. The Saudi family is worth $1.6T but that wealth is spread across 15,000 family members.
9
NandoDeColonoscopy5 days ago
+2
>They got golf
PIF is divesting from LIV
2
ConkerPrime5 days ago
+64
The merged company is going to get killed by interest payments. For Netflix, this whole thing was win-win.
They either get WB’s lucrative library or they successfully trick the Ellisons into driving price up to ridiculous levels and so get the library through streaming deals using Paramount’s own money and later buy up their IP anyway when Ellisons start selling the merged company for parts to keep it afloat.
64
oaklandperson5 days ago
+15
They can buy WB in 5 years when it gets sold again with the dissolution of skydance or skydance needs to spin off all their debt.
15
Kind-Armadillo-23404 days ago
+2
Maybe if there’s a change to the regulations that allow these types of investments. As it current stands I would expect the Saudi Arabian sovereign wealth fund to just bail them out again in 5 years. However much money SkyDance is losing each year, it’s a drop in the bucket compared to how much oil money Saudi Arabia makes each year.
If they can invest in a media company that leads to Americans voting republican, delaying the transition to renewable energies by another 5 years, that investment will pay for itself many times over.
2
TheNerdWonder5 days ago
+11
Ted alluded to this like 2 months ago too when he talked about WB’s history of going up for sale every few years. He knows that it’s just a matter of strategic patience and waiting for them to go up for grabs again.
11
Count-Bulky5 days ago
+8
I hope someone rescues HBO asap
8
noturaveragesenpaii5 days ago
+8
Nah, the way things are going aint no corporation gonna respect the prestige that HBO has always had.
8
Count-Bulky5 days ago
+6
Good luck out there
6
BlackGold095 days ago
+6
Let’s not forget the almost 3 billion they got just to go away.
6
[deleted]4 days ago
+5
[deleted]
5
Kind-Armadillo-23404 days ago
+1
Very much Lukas Matson vs Kendal Roy.
1
rysker65 days ago
+52
This merger is a time bomb because of the debt, and the Ellisons delusional strategy of creating MAGA content.
Netflix knows this.
Universal, and Apple are also waiting
52
Bleakwind5 days ago
+8
So their debt leverage seems to sit at 6 to 6.5 against earnings. Their debt, including assumed debt for the merger is about 80b.
And not including the 2.4b for Netflix to walk out on.
Donno about historical debt interest wdb is under, but assuming a conservative 5 percent over 80b.
They’ll have to pay 4b a year just on interest payments.
And from an industry that is very hit and miss, that’s a huge risk.
How much cash would this merger have and how much headroom before they have to sell off parts.
8
Original-Clue-33645 days ago
+4
My goodness those are terrible books.
From your perspective as an outsider, what do you think happened to WB? Were they just horribly managed over the last few decades? How does one of the legendary movie studios end up as this poisonous entity to acquire?
4
Bleakwind5 days ago
+3
Well cutting from 6% leverage to 3 or lower is what they ideally want.
For context, Disney has a leverage rate of 2.5%, Netflix is less than 0.5%
Thing we need to remember is David zaslav. The butcher of wbd.
As much as the creative, film and tv world loathe him, he did 2 things that created this merger. He brought wbd debt from 55b to 29.
And
He did the dirty work to make their debt more forgiving for the merger.
The same can be said to paramount. They cancelled late night show for example. There really not much more they can cut before talent walks off.
I say to cut that down in a few years is extremely difficult, and they’ll need to make those saving asap. They’re just bleeding money everyday. 11m a day.
It’s unlikely to work.
And in that event, the broad will more than defo force them to sell off assets.
The news division would offer the fastest sale. Elon would love to jump in. Selling that would buy them about a year.
Here’s something I just realise. With the slated release from both studios, if any few big ticket films flops,
So if the new King Kong, sonic, Harry Potter reboot, top gun 3, if the majority of these don’t score big means big sell off os inevitable
3
ImperatorUniversum15 days ago
+1
Bad executive choices, and every time WB is sold off the one selling is adding more debt to WB books,
1
futuresdawn5 days ago
+2
All I can think is ellisons counting on a government bailout because his massive merged studio is deemed to big to fail
2
LaserGuidedPolarBear5 days ago
+2
He is basically doing the ae thing with Oracle. Oracle is raising $50b through debt snd equity to spend on AI. The plan is to make it a leader in AI hyperscaling, which is pretty insane considering how much market share Oracle captured with the cloud platform. Also, Oracle has "laid off" 20% of its workforce that actually makes profitable products to further fund AI expenditure.
Oracle's cloud offering was widely considered a rounding error, so they have decided to bet the farm that they can compete in the AI space with the cloud providers that kicked their asses before.
So yeah, Oracle is going to need a government bailout in a couple years.
2
Mister__Mediocre5 days ago
+1
The picture is incomplete if you don't account for Larry Ellison, Oracle and other debtors and how much money they're willing to infuse into this merged entity.
Oracle has a 500B market cap. Worst case, they treat this like a 80B entry to consolidate their media empire (along with US TikTok and Paramount).
1
Bleakwind5 days ago
+3
That’s not a measured way to assess the situation.
Oracle has a market cap of 500b, that not to say they have 500b in cash to infused into para-wbd.
And it’s a public company, though Larry has a high share, 40% give or take, the board wouldn’t still by any bail out of his son’s company that is of no strategic interest to oracle. They’ll drag him through court, pen anti trust investigation and block things to slow down any bail out, all while para wbd bleeds.
3
Mister__Mediocre5 days ago
I think at this point, both the board and the shareholders agree that a bet on Oracle is a bet on the Ellisons. The board won't revolt. Same as Tesla and Musk.
0
Bleakwind5 days ago
+2
It don’t have to be the board. It’s a public company, shareholder can petition these. Anyone can be a shareholder.
Besides, as much as the Ellison are political and societal terrorist. They’re not fiscal arsonists. A man who fights against his own financial self interest is doomed to fail.
2
Mister__Mediocre5 days ago
I'm saying that they're willing to lose money on the WBD+Paramount entity if they can make money on the AI+Media angle through Oracle. They're going to ensure that if AI for Hollywood becomes a thing, it's going to happen entirely on the Oracle stack.
0
Bleakwind5 days ago
+1
That’s a bit of a stretch.
Oracle don’t need para wbd to create any media.
By the very definition, AI generates slop purely on servers and software. What buying para wbd got to do with anything.
All AI companies already scrap media data anyway.
And oracle does deploy AI but it’s just very fancy database systems. They built, run and rent server capacities to literally everyone but they themselves don’t compete with their customers like OpenAI, SAP. Disney, etc.
Group these together and media customer will switch to aws, azure, google.
1
Mister__Mediocre5 days ago
+1
They're going to move all Para and WBD media libraries from AWS to OCI in the near future and partner with firms who want to train on this data who will also be forced to use Oracle to avoid moving data between datacenters (which can be very expensive).
Oracle does far more than just database systems today. With OCI it's about hosting the entire tech stack for companies and with endless GPUs it's about being the platform to train and host AI models. Data has its own gravity in this world, which is their unifying strategy.
1
Bleakwind5 days ago
+1
They can’t move wbd yet. The merger isn’t done.
So are they generative AI company or are they going to partner?
Ai companies don’t care where wbd library is. We’ve all seem most of it. It’s there. That’s what they do. They create media that they try to make everyone see. The library isn’t a Biden vault, it’s the rights to….I have dvd…
There’s so many holes in this argument that…
Are you just making things up to prove something?
It feels like talking to a teenager who thinks they know everything
1
galaxyfudge5 days ago
+2
Would be absolutely nuts to see Apple get something like LoTR or Harry Potter.
2
The_Goondocks5 days ago
+9
Oh sure. They got a few billion to walk away AND raised their prices twice since.
9
Feeling_Education_355 days ago
+13
Nah this whole deal is a poison pill either ai gets regulated and oracle losses a shit ton or the Saudis pull out like with liv golf with the massive amount of debt they are Hollywood financing I give it 5-10 years then Netflix will sweep it up for pennies on the dollar
13
suspiciouscffee5 days ago
+3
“ai gets regulated” not happening unless we get all-out Butlerian Jihad
3
Original-Clue-33645 days ago
They’re going to pull out. Their sports and entertainment washing only goes so far. And with the Mideast at defcon red currently, my bet is the last thing they will invest in will be failed media companies.
0
yojumbo5 days ago
+12
I’m not pushing for this, but think about it-
If Disney bought WB, there would be Bugs Bunny and Mickey Mouse under the same roof, and there could finally be a Roger Rabbit sequel.
12
MsSobi5 days ago
+5
Most likely not, the Dude that wrote the book (Gary Wolfe) the movie is based on only JUST got back the rights FROM DISNEY, which is finally allowing him to write a sequel to the book i seriously doubt he'd want to give up the rights after not having them for 35 Years.
5
TanAllOvaJanAllOva5 days ago
+2
You know Ted didn’t put his ego aside since the first thing he said after it happened was how much money they got from Warner Bros going with paramount
2
Ok_Surprise_40905 days ago
+2
"Now we can get back to doing what Netflix does best: Making 8 episode seasons of mediocre TV shows that only come out every 3 years, and which you only hear about on the Today Show."
2
CrissBliss5 days ago
+1
Paramount must be hemorrhaging money.
1
SpiceEarl5 days ago
+1
The fix was in with the Trump administration for Paramount to buy Warner Brothers. Sarandos knew getting federal approval for Netflix to buy Warner was going to be an uphill battle. The smart move was to take the $3 billion and walk away, which is exactly what he did.
1
wumr1255 days ago
+1
Well a free 2.8 BILLION dollars payout for walking away sure makes the ride home feel nice
Bigggest free win of all time for netflix
1
GongTzu5 days ago
+1
Ellisons will run it into the ground with future debt.
1
Suspicious-Truth58495 days ago
+1
Probably figured the investment in the library and basically erasing physical onwers rights wasnt worth how much they'd have to make by raising subscription costs to make it back.
1
danielrobertcampbell4 days ago
+1
B****, please. The only reason you'd walk away is if it become financially disadvantageous. Are ***all*** CEOs lying dirtbags?
1
Apprehensive_Shirt185 days ago
+1
Great, prepare for 100 blockbusters/dramas about October 7th to be green-lit within the next 12 months.
1
Clear_Inspector_97965 days ago
+2
Maybe, but even CNN has been pointing out that Israeli approval rates have been absolutely cratering the last few years across parties and demos. Every single one of those movies will bomb.
2
DonnyMox5 days ago
Knowing Zaslav, it wouldn't surprise me if he wanted WB to go to Paramount from the start, but wasn't satisfied with the amount of money they were offering and used Netflix as bait to get them to increase it.
0
Stambro15 days ago
-2
And since his feeling are hurt, he decided to raise prices on the plans! It’s time to boycott Netflix!
52 Comments