Chapter 1: What major acquisition is being discussed in this episode?
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All the videos there are free for anyone to watch. You don't have to be a subscriber. Download The New York Times app to start watching. From The New York Times, I'm Rachel Abrams, and this is The Daily. For months, a Hollywood drama has been unfolding that's fit for the big screen.
It's a corporate love triangle with a cast of characters including a billionaire scion, a tech giant, and the President of the United States. Now that story appears to be coming to a close, but with a twist ending.
Today, my colleagues Nicole Sperling, Lauren Hirsch, and Jonathan Mahler explain why the merger between Paramount and Warner Brothers has left Hollywood in a state of shock, and why the deal could reshape our political and cultural landscape. It's Wednesday, March 4th. Lauren, Nicole, Jonathan, good to have you here. Thanks for having us. Good to be here. Happy to be here.
So we have gathered the three of you here today because for months now, there has been this looming question over Hollywood about who was going to buy Warner Brothers. And we finally seem to have our answer. It's going to be paramount with the winning bid. Lauren, you've covered every inch of this corporate dealmaking so far.
Nicole, you have been paying close attention to how Hollywood is reacting to all of this. And Jonathan, your extensive reporting on the Murdochs means that you are pretty well positioned to comment on what it means when billionaires come to town. So, Jonathan, I want to start with you. Can you explain why this deal matters? Sure.
I mean, on the most basic level, this deal matters a ton because we are talking about the creation of an enormous media empire here. We're talking about under one single roof, Paramount, CBS, HBO, Warner Brothers, CNN, Nickelodeon, MTV, and on and on and on. We are talking about a huge media company. And we're also talking about Larry and David Ellison, who are new media power brokers.
Larry, of course, was the founder of Oracle in the 70s, an original legacy software company, a billionaire many, many times over, who has in recent years gotten very close to the president, to Donald Trump. And his son, David, who was at one point an aspiring actor who then went on to become a film producer and financier and then bought Paramount.
And now with his new deal, Warner Brothers Discovery, he's going to become one of the most powerful media moguls in the world almost overnight. And so the two of them together are now emerging as a new kind of father-son duo. Really, you would have to say kind of outstripping the influence of Rupert and Lachlan Murdoch. They are the new Murdochs, but quite possibly a lot more powerful.
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Chapter 2: How did Paramount's bidding strategy change during the acquisition?
There's a lot of gray. And that's where I feel the most interesting stories are. I'm trying to bring that complexity and nuance to our audience. And that's really what all of my colleagues on the politics team and every journalist at The New York Times is aiming to do. Our mission is to help you understand the world, no matter how complicated it might be.
If you want to support this mission, consider subscribing to The New York Times. You can do that at nytimes.com slash subscribe. I want to talk about the Ellisons for a minute, just given how risky this deal sounds. Nicole, why do you think they are so desperate for this deal? Well, David Ellison was really interested in buying Paramount. He closed that deal six months ago.
But what he got in that acquisition was a company that was also struggling, that had started its own streaming service years ago, that had its own share of debt, that had its own library of assets that were kind of underutilized, that hadn't been exploited as well as they could have been. It was a company that had changed hands over time and was not in a very strong situation.
It's got close to 80 million subscribers worldwide. They're not big enough to compete with the big streamers. They still need more to really be a player in this game. They look at HBO Max, which has a subscriber base of 132 million people worldwide, and they see a opportunity to combine their forces. And then now they will be a behemoth that can actually fight in this battle for subscribers.
That is what every entertainment company is desperate for at this moment in time. Right.
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Chapter 3: What are the implications of the merger for Hollywood's landscape?
But I would also say, so there are kind of two levels to this. One is, you know, the one we're just talking about here, which is competing in the kind of streaming entertainment ecosystem space. But then I think you can kind of go up a level. And when you ask the question of, you know, why do the Ellisons seem so desperate to have this company making a deal that, you
And I think that there's obviously like a bigger plan here, that the Ellisons have a bigger plan. And I think we're all still trying to understand what the kind of political ramifications of all of this is going to be. How much of this is about Larry Ellison wanting to put himself in a more favorable position with the administration to get more government contracts, which Oracle does a lot of.
And is that going to entail moving these news outlets, CBS and now CNN, toward the center or to the right? And is that what is going to be expected of David in order to kind of keep his father's business operations running as he would like them to be in Washington? And that's something that we're all kind of looking at and waiting to see. Right.
And we've already seen some evidence of how the politics could affect the media business. Right. Like, look what happened to CBS, for example, after David Ellison acquired it last year. We've already seen CBS make some moves that have positioned them a little bit further to the right. Yeah, that's exactly right.
I mean, when David Ellison took control of CBS, he put Barry Weiss in charge, you know, the founder and creator of Free Press. And she immediately started making changes to the news network.
She, in a now kind of somewhat famous, infamous incident, she temporarily shelved a report that was about to go on 60 Minutes about a detention facility in El Salvador where the Trump administration was sending deportees. Of course, the Stephen Colbert show was terminated pretty quickly after Ellison took over the
So, you know, you don't want to go too far with this, but there's certainly been an effort and an ongoing effort. We're seeing it now with the war in Iran, too, where a lot of free press contributors have been on the air, on CBS, putting a kind of a positive spin on America's engagement in Iran.
So, you know, there has certainly been a change at CBS, and there is a lot of anxiety that something similar is going to come to CNN. But just to point out, CNN is not the same thing as CBS, right? How do you think things might play out differently at CNN? Yeah, I mean, they are very different. CNN has a very different identity than CBS and CBS News does.
CNN is a kind of democratic, liberal network. This is a network that, first of all, drives Trump crazy, but also has really positioned itself against Donald Trump much more overtly than CBS News ever did. So when you think about how David Ellison might try to pivot at CNN, it would both be more challenging because the business model is really built around a democratic audience.
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