Fmr. Viacom CEO: Netflix 'Better Fit' For WBD Takeover

Video Description

MTV Co-Founder, former Viacom CEO and Principal at Firefly3 Tom Freston joins Bloomberg Businessweek Daily to discuss his book “Unplugged: Adventures from MTV to Timbuktu," and he also weighs in on today's media landscape, including Netflix's deal to take over Warner Bros. Discovery. Freston says he thinks Netflix is the "better" and "more interesting" fit for the merger, compared to Paramount. Freston also discusses whether a network like MTV could be created today, the impact of reality shows on pop culture and entertainment, how social media is changing audience appetites, and more. Freston speaks with Carol Massar and Tim Stenovec. Netflix has the financial firepower to raise its bid from the current $27.75 a share for Warner's studio and streaming assets, especially if its decision to change its offer to an all-cash one sparks a higher offer from Paramount Skydance. The current Netflix bid (cash-stock mix) implies around 3x pro forma leverage at closing. Changing the existing bid to all-cash would mean about $12 billion in incremental debt and around 3.5x leverage. A hypothetical $30 bid from Netflix would suggest potential leverage of around 3.7x. Though that's not ideal, the streamer's strong free cash flow generation -- combined with upside from a solid IP portfolio, content library and synergies -- could provide support. Though Warner will supercharge Netflix’s content offering, we think it should exit if the bidding war gets contentious.  Paramount Skydance Corp. is pressing to wrap up a Justice Department antitrust review of its tender offer for Warner Bros. Discovery Inc. shares in the coming weeks, according to people familiar with the matter.  Paramount has been turning over information requested by the government, said the people, who asked to not be identified discussing private information. Completing that task will trigger a 10-day waiting period for the Justice Department to make a decision on whether to challenge Paramount’s proposal over competition issues. Demonstrating it has an advantage with regulators is a key part of Paramount’s strategy to thwart Netflix Inc.’s planned acquisition of the Warner Bros.’ studios and streaming businesses. If Paramount can clear that waiting period, it could use that as a sign of government approval and use that to try and convince Warner Bros. shareholders to vote against the Netflix transaction.  The expiration of the review period doesn’t mean Paramount is in the clear, however. The DOJ can still investigate and potentially challenge a deal after that period is over. If Paramount were to change key terms such as price, or ultimately sign a merger agreement with Warner Bros., its proposal would likely need to be resubmitted for DOJ review.  Warner Bros. agreed to sell its studios and streaming businesses to Netflix for $82.7 billion in December, choosing that option over a rival bid from Paramount. Warner Bros. plans to hold a shareholder vote on the proposal by April. Paramount has been trying to undercut the Netflix deal by appealing directly to shareholders and lobbying regulators. The Justice Department is conducting in-depth reviews of both the Netflix and Paramount offers, Bloomberg News previously reported. Key constituencies in Hollywood, including talent agencies, have just received information requests from federal officials, according to a people with knowledge of the outreach. Paramount declined to comment. The Justice Department didn’t immediately respond to a request for one. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X: https://twitter.com/BloombergRadio Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts: https://www.youtube.com/bloombergpodcasts Bloomberg Television: https://www.youtube.com/@markets Bloomberg Originals: https://www.youtube.com/bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake