Paramount overpaid for WB Discovery

[bmichaelh]

Here is an article about valuations of WB over the years.

https://www.hollywoodreporter.com/business/business-news/david-ellison-wins-netflix-warner-bros-1236517313/

The WB Discovery merger was valued at $43 billion a few years ago.
Netflix was willing to pay $83 billion.
Paramount is paying $111 billion.

If it goes through, would not be surprised that they start shutting down units or selling off assets.

[CincyDem]

1. They will sell off everything EXCEPT CNN

I suspect CNN division’s financials are crap and violate whatever limited governance constraints PARA has. This prevents them from buying cnn standalone as a spin out from Netflix.

But..they can buy WBD with its aggregated books, integrate it into PARA and piece by piece, sell off everything else except CNN. Avoids the issue with cnn’s poor profitability.

Mission accomplished.

[kimbutgar]

2. They are overhedging themselves and will have money problems soon

Adding to that debt is going to take them down. Especially when people stop watching the channels and they lose advertisers. That debt is not sustainable.

[SocialDemocrat61]

3. These companies are being managed by idiots

I was involved with another company doing one of these large multi-billion dollar buy outs. All they did was incur a huge debt and ultimately had to sell the company that they acquired for less than they brought it for.

[Xolodno]

4. The latest bid may be nothing more than trying to stick it to Netflix.

Thinking they would at least match it. Netflix may have kept its cool and decided "nope".

[bmichaelh]

5. Superman

MAGA was upset when Superman was described as an undocumented immigrant.

Many of them did not like the last WB Superman movie and called it "woke".

Wonder if Ellison is going to force the artists to produce media that is uncritical of Trump or MAGA.

[Johonny]

6. A lot of AI written movie scripts

The quality will go way down.