Paramount Skydance’s hiring of Makan Delrahim was the straightforward half.
Now the media big’s CEO David Ellison is hoping his new tremendous lawyer can entice David Zaslav to promote most if not all of Warner Bros. Discovery.
The Submit has realized that since taking the job final week, Delrahim — who was the Justice Division’s antitrust chief through the first Trump administration — is quick at work plotting a technique to get Zas to chunk on a bid from Ellison.
The pitch goes one thing like this: If Zas doesn’t promote to Ellison, he might discover himself with a Shari Redstone-like future.
Recall that Skydance simply bought Redstone’s media empire Paramount — which incorporates fading properties like CBS, Comedy Central, MTV and a mid-tier Hollywood studio — for a mere $8 billion as a result of the heiress bit the bullet and offered solely after it was too late.
Delrahim, in fact, is not any dummy — he’s possibly the best-positioned media dealmaker given his ties to the White Home.
His drawback is that Zas additionally is not any dummy. And Warner Bros. Discovery, identified in media and Wall Road circles merely as WBD, isn’t Paramount.
Simply earlier than Ellison — backed by dad Larry Ellison, the Oracle tycoon who’s now the second-richest particular person on the earth — reportedly signaled that he needed one other trophy property in WBD, Zas employed bankers at Goldman Sachs to begin buying it.
There’s curiosity and for good cause: Whereas Zas has taken warmth for a sluggish inventory worth and getting paid some huge cash, trade insiders are quietly recognizing the great issues he’s finished.
Stable field workplace
Warner Bros. studio has cranked out a bunch of huge box-office attracts; it’s the primary studio to earn $4 billion on the field workplace to this point this 12 months, HBO Max is worthwhile and standard; its subscriber development made it the third largest streamer.
Zas has been chipping away on the debt used to make the TimeWarner deal work.
He’s been separating cable channels like CNN from streaming and the studio, which might make issues simpler to promote, notably the streaming and studio unit since it’s going to have virtually no debt.
Individuals near Zas say Goldman has acquired curiosity from some formidable new gamers — Netflix, Amazon and even Apple amongst them — for the streaming and studios a part of the enterprise and at ranges above what the Ellisons have leaked.
“If the Ellisons need this, they higher convey money and a number of it,” stated one one that is aware of Zaslav nicely.
Zas scoffed at a leak to CNBC that Ellison is making ready $22 to $24 a share for all of WBD.
“Zaslav needs nicely north of that, someplace within the $30 vary and only for the streaming and studio,” this particular person added.
That’s the place Delrahim is available in.
In line with his pitch, other than Paramount Skydance there are solely two attainable suitors for WBD: Netflix and Amazon.
Netflix is already the No. 1 streaming service; combining it with the No. 3 service will face hurdles even from the extra deal-friendly Trump regulatory cops.
Consent decree
Ditto for Amazon, which purchased MGM Studios in 2022.
It’s additionally underneath a consent decree with the Federal Commerce Fee over allegations that it screwed customers once they signed up for its Amazon Prime.
Delrahim believes — or will inform Zas he believes — the consent decree provides yet one more stumbling block for an Amazon deal, with the FTC being essentially the most hazardous.
(There’s additionally FCC, DOJ antitrust and God is aware of what else.)
And if Zas is banking on a bid from Apple, he shouldn’t maintain his breath; the iPhone maker is on the lookout for content material however seeking to construct it organically.
That is why there’s close to radio silence from the Ellisons.
Plenty of conferences are happening in Skydance land on simply how you can proceed with Zas.
(By the point you’re studying this, the bid might have already been made.)
As reported, Delrahim may ask John Malone — aka “The Cable Cowboy,” a mercurial dealmaker who’s a significant shareholder in WBD — to instantly make the pitch.
Their drawback: This ain’t Zas’s first rodeo — and Malone is amongst his mentors.
Zaslav was a additionally was a protégé of Jack Welch when Basic Electrical owned NBCUniversal.
Zas is aware of stability sheets and he is aware of how you can do offers. In any other case, his comparatively small Discovery Inc. wouldn’t have managed its 2022 mega-merger with TimeWarner to create WBD.
In different phrases, possibly it’s attainable that he and Goldman can persuade the Trump administration to greenlight offers for Netflix and Amazon, or Apple lastly needs to purchase one thing — and Ellison can kiss that $22-a-share bid goodbye.
