Emily Flippen

By comparison, Warner Brothers is coming into this deal with, I don't know, tens of billions of dollars in debt, a fraction of the subscriber numbers, and of course, a lot of skepticism from Wall Street on its long-term viability.

When you saw this deal come out, what was your thought process in terms of the strategic logic here for Netflix?

Yeah, it's a critical question.

And to your point about Netflix being such a disciplined operator, I think that's why it surprised so many investors when they saw that Netflix even made a bid because it seemed like something that lacked, you could argue, a bit of financial discipline.

But to your point, Jason, I mean, I saw this and I wasn't surprised at all because to me, this is Netflix saying, we don't need this content library, but we know if we get this content library, we are absolutely crazy.

crushing the competition.

When you compare it to other bids like Paramount, which we're going to talk about in a second, they need that content library just to stay competitive.

So it's a position of strength versus a position of weakness.

And Dan, I know there was a lot of interest from other streaming and entertainment companies.

And of course, we have to talk about Paramount, who is coming from that position of weakness.

They actually launched their own Tinder offer to Warner Brothers shareholders for $30 a share

all cash.

Now, if more than 51% of shareholders choose to sell these shares to Paramount in the next 20 days, Paramount, of course, effectively control Warner Brothers.

As of right now, Netflix and Warner Brothers have reiterated that they're committed to the initial deal despite Paramount's offer.

And the math behind this offer isn't exactly clear.

It's not cut and dry.

What Netflix is offering is a combination of stock and cash and then also the potential value of the cable assets when they've been spun off versus Paramount's flat $30 cash rates.

But I want to ask you, Dan, I mean, why do you think ultimately Warner Brothers decided to go with Netflix bid?

And what, if anything, do you think comes out of this deal?

That's exactly where the difference is between the two bids.