1 00:00:00,080 --> 00:00:01,920 Welcome back everyone. Today on the Joseph Carlson 2 00:00:01,920 --> 00:00:05,120 Show, Paramount has officially been denied. 3 00:00:05,320 --> 00:00:09,240 And Warner Brothers Discovery. Is now saying that Larry Ellison 4 00:00:09,240 --> 00:00:12,400 and especially his son David Ellison, not only were they a 5 00:00:12,400 --> 00:00:14,800 little bit dishonest and misleading with the way that 6 00:00:14,800 --> 00:00:17,360 they presented their deal on CNBC. 7 00:00:17,920 --> 00:00:19,360 But they were straight up. Lying. 8 00:00:19,440 --> 00:00:21,880 They're basically just saying mistruths, in fact. 9 00:00:22,240 --> 00:00:24,560 From Warner Brothers Discovery. Some of the things that they 10 00:00:24,560 --> 00:00:27,000 outline the the board when they went over the deal. 11 00:00:27,360 --> 00:00:30,640 Is they say that it's. Quote illusionary, meaning it's 12 00:00:30,640 --> 00:00:34,000 basically fabricated. Most of the deal doesn't even 13 00:00:34,040 --> 00:00:36,400 exist. It's not reliable. 14 00:00:36,400 --> 00:00:39,360 There's no way to actually pin Paramount down to a deal. 15 00:00:39,440 --> 00:00:42,120 O this headline from the Wall Street Journal is actually an 16 00:00:42,120 --> 00:00:44,880 understatement. Warner didn't just reject 17 00:00:44,880 --> 00:00:49,040 Paramount's hostile bid, they outlined it as a fabricated lie. 18 00:00:49,120 --> 00:00:51,920 And in this episode, we'll be going over that entire letter, 19 00:00:51,920 --> 00:00:54,640 the full thing from Warner Brothers Discovery, outlining 20 00:00:54,640 --> 00:00:57,440 why they believe that Paramount's being so dishonest. 21 00:00:57,440 --> 00:01:00,680 What they actually believe is. Wrong with their proposal and 22 00:01:00,680 --> 00:01:02,480 the deal with Netflix and why they believe that's actually a 23 00:01:02,480 --> 00:01:05,200 much stronger deal we also have an interview with the CEO of 24 00:01:05,200 --> 00:01:07,280 Netflix explaining this deal why he. 25 00:01:07,280 --> 00:01:10,200 Believes it will go through. Regulation and why they're even 26 00:01:10,200 --> 00:01:11,320 doing it in the first. Place. 27 00:01:11,320 --> 00:01:13,280 What do they see? In this asset of Warner 28 00:01:13,360 --> 00:01:16,840 Discovery and HBO Now, we know that Larry Ellison is not happy 29 00:01:16,840 --> 00:01:19,080 about this. He wants to own this asset. 30 00:01:19,280 --> 00:01:22,000 He's trying to get money from everyone he can, including the 31 00:01:22,000 --> 00:01:23,600 Saudis. And although the Saudis have 32 00:01:23,600 --> 00:01:26,400 kept in the deal so far, Jared Kushner, one of the. 33 00:01:26,400 --> 00:01:28,280 Backers of this deal has dropped out. 34 00:01:28,400 --> 00:01:31,520 And we even have Paramount going out today saying that they're 35 00:01:31,520 --> 00:01:34,480 standing by their deal and Warner Brothers discoveries 36 00:01:34,480 --> 00:01:36,640 being unfair. With their criticism, we'll. 37 00:01:36,640 --> 00:01:39,120 Be looking at Paramount's reply and the big thing that they're 38 00:01:39,120 --> 00:01:40,680 leaving out. So this is a huge. 39 00:01:40,680 --> 00:01:43,280 Developing story, especially for someone like me that's invested 40 00:01:43,440 --> 00:01:45,440 in Netflix that still. Believes this is a great. 41 00:01:45,440 --> 00:01:47,160 Investment. After all, I just. 42 00:01:47,160 --> 00:01:51,240 Recently bought $10,000 more of the stock and two $5000 43 00:01:51,240 --> 00:01:53,840 purchases. So I'm invested in this company. 44 00:01:53,840 --> 00:01:55,720 I'll be going over how I see this playing out. 45 00:01:56,080 --> 00:01:57,800 And of course, we have a lot of other news as well. 46 00:01:57,800 --> 00:01:59,920 We have Tom Lee going on to CNBC. 47 00:02:00,080 --> 00:02:03,160 Tom Lee is bearish. For the first time in a long 48 00:02:03,160 --> 00:02:05,400 time, we'll be going over why he's concerned. 49 00:02:05,400 --> 00:02:08,039 About the first. Half of 2026 we have Mark 50 00:02:08,039 --> 00:02:10,639 Mahaney outlining why. He still believes that Google. 51 00:02:10,639 --> 00:02:14,600 Should be in your portfolio as one of the top picks on the 52 00:02:14,600 --> 00:02:17,160 subject of Netflix. We also have them now entering 53 00:02:17,160 --> 00:02:20,440 into the game of podcast, bringing on many of the biggest 54 00:02:20,440 --> 00:02:23,880 podcasts in the world in video format on the Netflix 55 00:02:23,880 --> 00:02:26,640 subscription exclusively. And then finally, we get to our 56 00:02:26,640 --> 00:02:29,520 fail of the week. In this case, we have director 57 00:02:29,520 --> 00:02:32,720 Carl Rynch. He was found guilty of swindling 58 00:02:32,720 --> 00:02:35,040 Netflix out of $11 million in one of the. 59 00:02:35,040 --> 00:02:37,120 Craziest stories that I've ever read. 60 00:02:37,480 --> 00:02:40,320 This is a director that. Took money to make a movie, but 61 00:02:40,320 --> 00:02:42,560 instead of making the movie he did a lot of other things with 62 00:02:42,560 --> 00:02:44,920 that money so we have a ton to get to in this episode let's go 63 00:02:44,920 --> 00:02:47,160 ahead and jump in now as we start things off, I think it's 64 00:02:47,160 --> 00:02:49,520 important to catch you up on this developing story. 65 00:02:49,520 --> 00:02:51,720 If you've missed some of the. Previous episodes I'll just 66 00:02:51,720 --> 00:02:53,600 quickly. Go over what's happened so far. 67 00:02:54,160 --> 00:02:56,680 So far we've had Warner. Brothers discovery with their 68 00:02:56,680 --> 00:02:59,480 iconic. Assets of HBO The HBO. 69 00:02:59,480 --> 00:03:03,120 Max subscription service and Warner Studios, which is a maker 70 00:03:03,120 --> 00:03:06,080 of mini massive films, ones like Dune or Tenet. 71 00:03:06,120 --> 00:03:07,880 It's an incredible asset. It's one of the. 72 00:03:07,880 --> 00:03:10,560 Biggest legacy assets? It's one of the iconic movie 73 00:03:10,560 --> 00:03:13,400 makers and they. Decided to sell because they're. 74 00:03:13,400 --> 00:03:16,080 Struggling financially, they have enormous amounts of debt 75 00:03:16,600 --> 00:03:18,480 and. David Zaslav believes that 76 00:03:18,480 --> 00:03:19,560 there. Needs to be some level of 77 00:03:19,560 --> 00:03:22,720 consolidation when they put the company up for sale. 78 00:03:23,040 --> 00:03:26,360 There is numerous bidders including Comcast, Paramount and 79 00:03:26,360 --> 00:03:29,280 Netflix and a few others. But the ones that were taken the 80 00:03:29,280 --> 00:03:31,360 most seriously were Paramount and Netflix. 81 00:03:31,360 --> 00:03:33,240 They're the ones that were offering the best terms and the 82 00:03:33,240 --> 00:03:34,920 highest bids. Warner Brothers Discovery 83 00:03:34,920 --> 00:03:37,720 ultimately decided to go with Netflix, believing that their 84 00:03:37,720 --> 00:03:40,040 bid was. Superior, so they locked. 85 00:03:40,040 --> 00:03:42,000 In on that bid, they signed an agreement. 86 00:03:42,240 --> 00:03:45,400 Now Netflix is in agreement. They have a formal contract 87 00:03:45,400 --> 00:03:49,000 signed to buy the Warner Brothers Studios and HBO assets. 88 00:03:49,000 --> 00:03:51,600 They're not going to buy the cable assets that's going to be 89 00:03:51,600 --> 00:03:55,040 packaged and sold separately. Now, Paramount, of course, is 90 00:03:55,040 --> 00:03:57,280 not happy about this. They believe that they should 91 00:03:57,280 --> 00:03:59,720 own the assets. And the son of Larry Ellison, 92 00:03:59,720 --> 00:04:02,520 who is David Ellison, is especially not happy about this. 93 00:04:03,160 --> 00:04:04,680 He threw a fit. He said that. 94 00:04:05,040 --> 00:04:07,920 This is something where they didn't take our bid seriously. 95 00:04:08,000 --> 00:04:09,640 They didn't, really. Treat us fairly. 96 00:04:09,920 --> 00:04:12,880 They decided to just go with Netflix without even looking at 97 00:04:12,880 --> 00:04:15,240 what we're offering. David Ellison, in fact, felt so 98 00:04:15,240 --> 00:04:17,760 strongly. That his bid was superior. 99 00:04:18,079 --> 00:04:19,839 And that paramount should be the rightful. 100 00:04:19,839 --> 00:04:21,399 Owner of Warner Brothers Discovery. 101 00:04:21,920 --> 00:04:24,720 That he went on to CNBC explaining why they're now doing 102 00:04:25,080 --> 00:04:27,360 a tender offer. This is a hostile bid. 103 00:04:27,360 --> 00:04:30,360 Paramount's trying to bypass. The board of Warner Brothers 104 00:04:30,360 --> 00:04:32,440 Discovery. And the executive team saying 105 00:04:32,440 --> 00:04:34,520 we're not going to go to you, we're going to go to the. 106 00:04:34,520 --> 00:04:36,480 Biggest shareholders of Warner Brothers. 107 00:04:36,480 --> 00:04:40,640 Discovery and appeal directly to them, saying ignore the board, 108 00:04:40,640 --> 00:04:43,160 ignore the. Executives, take our offer. 109 00:04:43,440 --> 00:04:44,680 And here he is making some of the. 110 00:04:44,680 --> 00:04:46,600 Case of why his offer was superior. 111 00:04:46,880 --> 00:04:50,320 By every metric you can look at, we believe that our offer is 112 00:04:50,320 --> 00:04:52,880 superior to shareholders. Now again, he's on national 113 00:04:52,880 --> 00:04:55,760 television making his case because so far, Warner Brothers 114 00:04:55,760 --> 00:04:58,560 doesn't agree with him. They're in contract with 115 00:04:58,560 --> 00:05:00,840 Netflix. And he continues on detailing 116 00:05:00,840 --> 00:05:04,760 out why Paramount's is better. We made the highest offer for 117 00:05:04,760 --> 00:05:08,320 the company, $30 in cash is more than 23. 118 00:05:08,560 --> 00:05:11,040 So you see some of the ways that he misrepresents. 119 00:05:11,080 --> 00:05:12,480 The truth. The truth. 120 00:05:12,480 --> 00:05:15,360 Is that when you break up the math between the stock and the 121 00:05:15,360 --> 00:05:18,440 cash and what they're actually buying, Netflix's offer is 122 00:05:18,440 --> 00:05:21,240 actually just as competitive. In fact, it may actually be much 123 00:05:21,240 --> 00:05:25,080 more than David Ellison's, but the way that he frames a deal is 124 00:05:25,080 --> 00:05:26,920 incredibly misleading. And this is. 125 00:05:26,920 --> 00:05:29,240 Exactly the type of. Problem that Warner Brothers 126 00:05:29,240 --> 00:05:32,360 Discovery pointed out in their. Press release today if you. 127 00:05:32,360 --> 00:05:33,560 Just read the Wall Street Journal. 128 00:05:33,560 --> 00:05:35,320 You'll miss some of the most important things. 129 00:05:35,320 --> 00:05:36,480 That the Warner Brothers discovery. 130 00:05:36,480 --> 00:05:39,560 Team is saying it doesn't accurately relay it, so instead 131 00:05:39,560 --> 00:05:41,040 we're going to go. Straight to the source. 132 00:05:41,120 --> 00:05:43,480 This is the exact letter. That they're giving to their 133 00:05:43,480 --> 00:05:45,280 shareholders the problem with Paramount. 134 00:05:45,280 --> 00:05:48,040 'S deal is what's. Underneath the surface, the 135 00:05:48,040 --> 00:05:50,640 stuff you're not seeing, Paramount's most recent proposal 136 00:05:50,640 --> 00:05:54,760 includes $40.65 billion in equity commitments for which 137 00:05:54,760 --> 00:05:58,000 there is no Ellison family commitment of any kind instead. 138 00:05:58,000 --> 00:06:01,960 They propose that you rely. On an unknown, opaque, revocable 139 00:06:01,960 --> 00:06:06,160 trust for the certainty of this crucial deal funding despite 140 00:06:06,160 --> 00:06:08,200 having been told. Repeatedly by Warner Brothers. 141 00:06:08,200 --> 00:06:11,680 Discovery how important a full and unconditional financing 142 00:06:11,680 --> 00:06:15,200 commitment from the Ellison family was and despite their own 143 00:06:15,200 --> 00:06:17,560 ample. Resources as well as multiple. 144 00:06:17,560 --> 00:06:19,920 Assurances by Paramount during the strategic review. 145 00:06:19,920 --> 00:06:21,800 Process. That such a commitment was 146 00:06:21,800 --> 00:06:25,240 forthcoming, the Ellison family has chosen not to backstop 147 00:06:25,480 --> 00:06:27,800 Paramount's offer. So basically David Ellison is 148 00:06:27,800 --> 00:06:31,400 going on TV saying, look, our offers like a sure thing. 149 00:06:31,400 --> 00:06:33,560 We have the Ellison family trust behind it. 150 00:06:33,560 --> 00:06:36,640 Like the second most rich person in the world, Larry Ellison is 151 00:06:36,640 --> 00:06:40,160 behind this deal. And that's not true when you 152 00:06:40,160 --> 00:06:42,040 actually get down to what is actually backing this. 153 00:06:42,040 --> 00:06:44,320 Offer. It's completely revocable. 154 00:06:44,840 --> 00:06:47,280 The deal was never backstopped by the Ellison family. 155 00:06:47,280 --> 00:06:50,720 They never put their family's assets on the line for this 156 00:06:50,720 --> 00:06:52,440 deal. They say a revocable. 157 00:06:52,440 --> 00:06:54,680 Trust is no. Replacement for a secured. 158 00:06:54,680 --> 00:06:56,600 Commitment by a controlling stakeholder. 159 00:06:56,960 --> 00:06:59,960 The assets and liabilities of a trust are not publicly disclosed 160 00:06:59,960 --> 00:07:03,560 and are subject to change. As the name indicates, revocable 161 00:07:03,560 --> 00:07:06,360 trust typically have provisions allowing for the assets to be 162 00:07:06,360 --> 00:07:09,000 moved at any time. And the documents provided by. 163 00:07:09,000 --> 00:07:12,240 Paramount for this conditional commitment contains gaps, 164 00:07:12,440 --> 00:07:16,320 loopholes and limitations that put you, the shareholder and our 165 00:07:16,320 --> 00:07:18,400 company at risk. They're basically saying that 166 00:07:18,840 --> 00:07:20,840 this. Trust is opaque. 167 00:07:20,840 --> 00:07:23,520 We don't even know what's in it. And they have the ability to 168 00:07:23,520 --> 00:07:25,840 move assets in and out of it anytime they want. 169 00:07:25,960 --> 00:07:28,120 So when you hear news that the. Warner Brothers Discovery. 170 00:07:28,120 --> 00:07:31,400 Team has concerns about the funding of this deal offered by 171 00:07:31,400 --> 00:07:33,160 Paramount. They're not saying that. 172 00:07:33,160 --> 00:07:36,240 They're concerned that the Saudis are included in the deal. 173 00:07:36,480 --> 00:07:38,240 That's not really highlighted concern here. 174 00:07:38,240 --> 00:07:42,040 What they've pointed out so far is the specific contract that 175 00:07:42,040 --> 00:07:44,520 the Ellison's family money is not backing this. 176 00:07:44,520 --> 00:07:47,040 Deal that they're. Using every way they can to be 177 00:07:47,040 --> 00:07:49,640 able to get out of this deal at any point, if anybody. 178 00:07:49,640 --> 00:07:52,880 Backs out of it. That they have enormous means, 179 00:07:53,160 --> 00:07:55,960 The Ellison family and David Ellison and Larry Ellison, They 180 00:07:55,960 --> 00:07:59,400 could put their entire family trust irrevocably behind this 181 00:07:59,400 --> 00:08:01,520 deal, and they're not. Now they contrast. 182 00:08:01,520 --> 00:08:03,600 The Warner Brothers Discovery proposal. 183 00:08:03,760 --> 00:08:07,160 With the Netflix deal, Warner's merger agreement with Netflix is 184 00:08:07,160 --> 00:08:10,280 a binding agreement with enforceable commitments with no 185 00:08:10,280 --> 00:08:13,200 need for an equity financing and robust debt commitments. 186 00:08:13,600 --> 00:08:15,600 The Netflix merger is. Fully backed by a public. 187 00:08:15,600 --> 00:08:19,040 Company with a market cap in excess of $400 billion with an 188 00:08:19,040 --> 00:08:22,000 investment grade balance sheet. The debt financing a Paramount 189 00:08:22,000 --> 00:08:26,200 bid relies on unsecured revocable trust commitments as 190 00:08:26,200 --> 00:08:30,080 well as the creditworthiness of a $15 billion market cap. 191 00:08:30,080 --> 00:08:33,520 Company with a credit rating at or only above junk. 192 00:08:33,679 --> 00:08:36,120 The financial condition and creditworthiness of Paramount 193 00:08:36,120 --> 00:08:39,200 which if this proposed transaction were to close. 194 00:08:39,480 --> 00:08:41,240 So if they were to close the deal with. 195 00:08:41,240 --> 00:08:44,280 Paramount they would have high. Gross leverage ratio. 196 00:08:44,480 --> 00:08:49,760 Of 6.8 * 2026 debt to EBITDA Now what they're doing here? 197 00:08:50,120 --> 00:08:51,520 What Warner Brothers Discovery Board. 198 00:08:51,520 --> 00:08:54,720 Is doing here is entirely fair. This is the exact. 199 00:08:54,720 --> 00:08:57,120 Way that you look at. Leverage you compare the long 200 00:08:57,120 --> 00:08:59,320 term debt to next year's. EBITDA. 201 00:08:59,320 --> 00:09:03,800 As a quick rule of thumb, any debt to EBITDA ratio above 3 is 202 00:09:03,800 --> 00:09:05,640 concerning. It means that the company's in a 203 00:09:05,640 --> 00:09:07,560 very difficult financial situation. 204 00:09:07,960 --> 00:09:10,320 Any company that's below. A three is probably OK. 205 00:09:10,400 --> 00:09:12,200 That means that they can probably sustain their debt 206 00:09:12,480 --> 00:09:15,880 without too much hassle. Now, not only do they have one 207 00:09:15,880 --> 00:09:21,720 above 3, there's a 6.8 meaning based on 2026's estimated 208 00:09:21,760 --> 00:09:25,600 EBITDA, if this transaction closed, they would have 6.8 209 00:09:25,600 --> 00:09:27,560 times the long term debt of that EBITDA. 210 00:09:27,880 --> 00:09:30,240 That would put them in a severely disadvantaged state. 211 00:09:30,680 --> 00:09:33,680 They'd have incredible interest obligations on that debt. 212 00:09:33,840 --> 00:09:36,560 Now just for comparison, if we were to bring up Netflix and do 213 00:09:36,560 --> 00:09:39,120 analysis on the exact same ratio that they're using for 214 00:09:39,120 --> 00:09:43,320 Paramount, Netflix is trailing EBITDA is about $30 billion and 215 00:09:43,320 --> 00:09:46,400 their current net debt as of today, meaning their cash minus 216 00:09:46,400 --> 00:09:49,240 their debt is $5 billion, Netflix's debt to EBITDA. 217 00:09:49,240 --> 00:09:51,960 Would likely be below 2. Meaning that in two years of. 218 00:09:52,040 --> 00:09:54,120 EBITDA they could pay off. All their outstanding debt. 219 00:09:54,120 --> 00:09:56,720 If they so chose to. That also means that Netflix 220 00:09:56,720 --> 00:09:58,520 will be able to invest in the industry. 221 00:09:58,560 --> 00:10:00,080 They'll be able to create more content. 222 00:10:00,320 --> 00:10:03,160 They won't be weighed down by enormous interest payments that 223 00:10:03,160 --> 00:10:06,320 they can't afford, and that's not the situation that Paramount 224 00:10:06,320 --> 00:10:07,960 would be in if. They bought Warner Brothers 225 00:10:07,960 --> 00:10:09,360 Discovery. On the. 226 00:10:09,360 --> 00:10:13,080 Surface of it, this deal is bad. For the industry if Warner 227 00:10:13,080 --> 00:10:14,360 Brothers. Discovery gets sold to. 228 00:10:14,360 --> 00:10:17,560 Paramount They will be swamped with debt, so outlining the 229 00:10:17,560 --> 00:10:21,200 capital structure and the vulnerabilities is an important 230 00:10:21,200 --> 00:10:23,840 thing to do. They say that such debt levels 231 00:10:23,840 --> 00:10:26,280 reflect a risky. Capital structure that is 232 00:10:26,280 --> 00:10:30,000 vulnerable to even potentially small changes in the Paramount 233 00:10:30,000 --> 00:10:32,800 or Warner Brothers business between signing and closing. 234 00:10:33,160 --> 00:10:37,400 So if anything was to happen to any of the funding sources, this 235 00:10:37,400 --> 00:10:40,920 is a fragile agreement between these two companies and it's 236 00:10:40,920 --> 00:10:43,760 very robust and strong between them and Netflix, they say. 237 00:10:43,760 --> 00:10:45,720 Additionally, Paramount contemplates 9. 238 00:10:45,720 --> 00:10:47,320 Billion dollars worth of. Synergies. 239 00:10:47,600 --> 00:10:50,120 Netflix, on the other hand, is only contemplating around 3 240 00:10:50,120 --> 00:10:54,080 billion and the synergies mean that they can fire people, they 241 00:10:54,080 --> 00:10:55,840 can get rid of people. Because of course there's. 242 00:10:55,840 --> 00:10:58,320 Actually more overlap with the Paramount and Warner. 243 00:10:58,320 --> 00:11:00,680 Brothers Discovery Studios both. Of them are major. 244 00:11:00,680 --> 00:11:03,440 Hollywood studios, if they. Combine it will be 1 company 245 00:11:03,440 --> 00:11:05,720 owning 2 studios, which of course they're going to 246 00:11:05,720 --> 00:11:08,520 completely scrap so many employees they'll fire so many 247 00:11:08,520 --> 00:11:11,200 of them to cut costs. Netflix won't be doing that 248 00:11:11,200 --> 00:11:14,640 because Netflix as of now has no big box office studio. 249 00:11:15,000 --> 00:11:17,760 They have no asset like Warner Brothers Discovery, so they have 250 00:11:17,760 --> 00:11:20,280 far less synergy, meaning they're going. 251 00:11:20,280 --> 00:11:22,960 To fire far fewer people. And in the process, they'll 252 00:11:22,960 --> 00:11:24,320 actually grow the company because they. 253 00:11:24,320 --> 00:11:27,360 Have the capital to do. So instead of servicing 254 00:11:27,520 --> 00:11:29,480 enormously. High levels of leverage. 255 00:11:29,520 --> 00:11:31,960 Even outside of how? Bad this offer is. 256 00:11:31,960 --> 00:11:34,640 For the Warner Brothers. Discovery shareholder it's also. 257 00:11:34,640 --> 00:11:37,480 Terrible for the industry. This would be something where 258 00:11:37,480 --> 00:11:39,640 they would have to cut so many costs. 259 00:11:40,040 --> 00:11:42,880 The amount of synergies or cutting costs and slashing 260 00:11:43,320 --> 00:11:46,760 laying off employees would be incredibly intense to make this 261 00:11:46,760 --> 00:11:49,920 deal work once they realize that they're swamped by debt, that 262 00:11:49,920 --> 00:11:52,120 they don't have the cash. Flows to be able to support this 263 00:11:52,120 --> 00:11:54,320 deal. They are going to cut costs like 264 00:11:54,320 --> 00:11:58,160 there's no tomorrow and what was 2 Studios, Warner Brothers 265 00:11:58,160 --> 00:12:00,600 Discovery and Paramount Pictures will be 1. 266 00:12:00,680 --> 00:12:03,200 Warner has highlighted Paramount's offer, calling it 267 00:12:03,360 --> 00:12:05,000 illusory. Now. 268 00:12:05,200 --> 00:12:08,200 Illusory means. That it's like fabricated it's. 269 00:12:08,200 --> 00:12:11,160 Not real. It doesn't actually exist. 270 00:12:11,440 --> 00:12:12,920 That's the. That's what the word means. 271 00:12:13,320 --> 00:12:15,480 They're saying their offer just isn't real. 272 00:12:15,520 --> 00:12:20,080 The offer can be terminated or amended by Paramount at any time 273 00:12:20,240 --> 00:12:23,200 prior to its completion. It is not the same thing as a 274 00:12:23,200 --> 00:12:25,600 binding merger agreement. The 1st. 275 00:12:25,600 --> 00:12:29,000 Paragraph of the offer states. Quote subject to the conditions 276 00:12:29,000 --> 00:12:32,240 set forth in this offer to purchase as it may be amended or 277 00:12:32,240 --> 00:12:34,680 supplemented from time to time. We reserve the right. 278 00:12:34,680 --> 00:12:37,480 To amend the offer in any respect, including amending. 279 00:12:37,560 --> 00:12:40,480 The offer price. In addition, the offer is not 280 00:12:40,480 --> 00:12:44,360 capable of being completed by its current expiration date due 281 00:12:44,360 --> 00:12:46,120 to the need for, among other things. 282 00:12:46,320 --> 00:12:49,520 Global regulatory approvals. Which Paramount indicates may 283 00:12:49,520 --> 00:12:52,440 take 12 to 18 months. So that's Warner Brothers 284 00:12:52,440 --> 00:12:55,120 overall. Take on Paramount's offer they 285 00:12:55,120 --> 00:12:58,120 call it dishonest, misleading they say that it's not a real 286 00:12:58,120 --> 00:13:00,480 offer it can be changed at any point they even. 287 00:13:00,480 --> 00:13:01,960 Say that it's false to say that the. 288 00:13:02,000 --> 00:13:03,920 Ellison family is backing this offer. 289 00:13:03,960 --> 00:13:05,840 They're not. And they contrast it with 290 00:13:05,840 --> 00:13:07,480 Netflix, which is completely binding. 291 00:13:07,760 --> 00:13:10,400 And it's backed by a $400 billion market cap company. 292 00:13:10,520 --> 00:13:13,520 Netflix hasn't given itself a. A backdoor exit to the. 293 00:13:13,520 --> 00:13:17,600 Offer And we also have news that as this is going on Jared 294 00:13:17,600 --> 00:13:21,880 Kushner has apparently dropped out of this second proposal so 295 00:13:21,880 --> 00:13:24,760 we already have parties looking at this and and fleeing this 296 00:13:24,760 --> 00:13:27,680 deal I don't want to be part of this this is becoming a mess 297 00:13:27,800 --> 00:13:31,160 they're backing out of it now Paramount of course just minutes 298 00:13:31,160 --> 00:13:33,760 ago they released. This write up did they say? 299 00:13:33,760 --> 00:13:36,640 That their offer is binding. Did they say that it's backed by 300 00:13:36,640 --> 00:13:39,080 the Ellison family? The answer is no. 301 00:13:39,080 --> 00:13:41,480 And again, you have Paramount not addressing the actual 302 00:13:41,480 --> 00:13:44,120 concerns to the Warner Brothers Discovery shareholders and the 303 00:13:44,120 --> 00:13:44,760 board. This. 304 00:13:44,760 --> 00:13:47,080 Simply shows that they're just going to have to up their offer, 305 00:13:47,680 --> 00:13:49,440 they're going to have to come back with a much better offer 306 00:13:49,720 --> 00:13:51,120 they're going to have. To up at like 5. 307 00:13:51,120 --> 00:13:53,400 Dollars per share and they're going to have to actually. 308 00:13:53,440 --> 00:13:56,360 Address the. Equity funding concerns making 309 00:13:56,360 --> 00:13:58,080 the. Offer irrevocable. 310 00:13:58,320 --> 00:14:01,880 Making it a binding agreement exactly like Netflix has. 311 00:14:02,240 --> 00:14:04,440 So not only does the. Offer have to be higher. 312 00:14:04,640 --> 00:14:07,080 But it has to be binding. In that case, they have. 313 00:14:07,080 --> 00:14:08,920 A shot. They really come back to the 314 00:14:08,920 --> 00:14:11,880 table and they up the. Offer by 4 or $5. 315 00:14:12,240 --> 00:14:13,640 They make it a binding agreement. 316 00:14:13,640 --> 00:14:14,840 They really. Do back it with the. 317 00:14:14,840 --> 00:14:18,560 Ellison family wealth, not some. Opaque, revocable trust. 318 00:14:18,560 --> 00:14:21,080 That you can move money in and out of any time but they're. 319 00:14:21,080 --> 00:14:24,040 Actually, their actual wealth. Then that would be something 320 00:14:24,040 --> 00:14:25,960 that the Warner Brothers Discovery team would listen to. 321 00:14:26,520 --> 00:14:29,280 But so. Far, Netflix has shown a bigger 322 00:14:29,280 --> 00:14:32,120 willingness to be way more straightforward, way more 323 00:14:32,120 --> 00:14:34,000 truthful. You have an offer that's better 324 00:14:34,000 --> 00:14:36,120 on paper, not only is it better on. 325 00:14:36,120 --> 00:14:38,880 Paper, but it's also better. For the industry as a whole, 326 00:14:39,320 --> 00:14:43,960 again, if Netflix ends up buying HBO and Paramount, they actually 327 00:14:43,960 --> 00:14:46,240 have the financial strength to manage their. 328 00:14:46,240 --> 00:14:49,040 Huge debt load. They can do that, Paramount 329 00:14:49,040 --> 00:14:52,160 can't a 7 times. EBITDA ratio. 330 00:14:52,160 --> 00:14:54,440 Is insane. I would never invest in a 331 00:14:54,440 --> 00:14:56,920 company with that level of debt. Not even close. 332 00:14:57,120 --> 00:14:59,560 I start getting nervous when it's passed three times. 333 00:15:00,120 --> 00:15:02,520 So it's also just. Better for the industry now if 334 00:15:02,520 --> 00:15:04,040 Netflix. Does get past this whole? 335 00:15:04,040 --> 00:15:07,480 Paramount drama If Paramount finally throws in the towel and 336 00:15:07,480 --> 00:15:11,120 gives up and doesn't continue to raise the bid, they they might 337 00:15:11,120 --> 00:15:12,520 raise the bid. So I'm not saying they won't do 338 00:15:12,520 --> 00:15:14,800 that, but if they finally do get past it, it looks like Netflix 339 00:15:14,800 --> 00:15:18,600 is going forward with it. Netflix has the challenge of now 340 00:15:18,600 --> 00:15:20,960 appeasing the regulators, showing why this is going to be 341 00:15:21,040 --> 00:15:23,360 good for consumers, why it's going to be good for the 342 00:15:23,360 --> 00:15:25,960 industry, why it's going to be good for competition overall. 343 00:15:26,240 --> 00:15:28,040 And that is a very daunting challenge, many people. 344 00:15:28,040 --> 00:15:30,480 Have highlighted that this. Looks like it's an unfair deal. 345 00:15:30,960 --> 00:15:33,520 It's unfair to the consumer because Netflix will own so much 346 00:15:33,920 --> 00:15:36,680 and Greg Peters, the CEO of the company, tries to frame. 347 00:15:36,840 --> 00:15:39,920 How they look through the. Lens of competition and tries to 348 00:15:39,920 --> 00:15:41,280 frame what they're actually dealing with. 349 00:15:41,320 --> 00:15:42,840 Yeah. We believe the regulatory 350 00:15:42,840 --> 00:15:47,080 process will ultimately conclude based on the facts, and we feel 351 00:15:47,080 --> 00:15:49,080 those facts really support the approval of the deal. 352 00:15:49,080 --> 00:15:51,520 We're confident regulators will ultimately see this as pro 353 00:15:51,520 --> 00:15:54,680 consumer, pro creator, pro worker, pro growth, pro 354 00:15:54,680 --> 00:15:57,920 innovation and pro competition. You, you know, came up with a 355 00:15:57,920 --> 00:16:00,600 few examples of how you might define the market. 356 00:16:00,600 --> 00:16:02,640 We look at, you know, the market definition in a couple of 357 00:16:02,640 --> 00:16:05,320 different ways. A key one for our side is just, 358 00:16:05,320 --> 00:16:07,320 you know, who's winning TV view share. 359 00:16:07,320 --> 00:16:10,640 And I think if you look at that, we're way low in the rankings. 360 00:16:10,640 --> 00:16:13,480 We're six behind Google and YouTube, behind Disney, behind 361 00:16:13,480 --> 00:16:17,640 Comcast, NBC, Fox, Paramount. Even then, we put, you know, HBO 362 00:16:17,640 --> 00:16:20,200 Max and HBO on top of the Netflix viewing. 363 00:16:20,200 --> 00:16:22,240 That still puts us behind YouTube and Disney. 364 00:16:22,400 --> 00:16:23,720 This is one of those things where a lot. 365 00:16:23,720 --> 00:16:27,240 Of people like to pipe. In and say hey Netflix doesn't 366 00:16:27,240 --> 00:16:31,160 compete with YouTube because YouTube is user generated 367 00:16:31,160 --> 00:16:33,880 content and Netflix is professional content. 368 00:16:35,360 --> 00:16:37,680 So what? Why does that mean they don't 369 00:16:37,680 --> 00:16:40,200 compete? You don't think that channels 370 00:16:40,200 --> 00:16:43,760 like mine aren't stealing viewership from cable 371 00:16:43,760 --> 00:16:46,320 television? Like you don't think that that 372 00:16:46,320 --> 00:16:49,680 channels just like mine all across YouTube are a challenge 373 00:16:49,680 --> 00:16:52,120 for legacy cable television? Where do you think viewer eyes 374 00:16:52,120 --> 00:16:55,360 are going? Netflix is directly competitive 375 00:16:55,360 --> 00:16:57,840 to YouTube. They always have been, going 376 00:16:57,840 --> 00:16:59,400 back years and years. They've always. 377 00:16:59,400 --> 00:17:01,800 Highlighted YouTube as a direct. Competitor. 378 00:17:02,320 --> 00:17:04,240 So this new talking point for many. 379 00:17:04,240 --> 00:17:06,400 People where they say YouTube really isn't a competitor. 380 00:17:06,560 --> 00:17:08,560 Because they have a different kind of content. 381 00:17:09,079 --> 00:17:12,119 I think it is just frankly. A a super weak ridiculous. 382 00:17:12,119 --> 00:17:16,760 Argument When you sit down to watch television on your TV now 383 00:17:16,760 --> 00:17:20,119 with smart TV's and Apple TV's and Roku's and you know all that 384 00:17:20,119 --> 00:17:22,800 stuff built in. Now you're choosing between 385 00:17:22,839 --> 00:17:27,200 YouTube, Paramount, HBOESPN app, you're choosing between all 386 00:17:27,200 --> 00:17:29,280 these services. You have them all displayed 387 00:17:29,280 --> 00:17:31,760 right on your TV and you can choose any one of them that you 388 00:17:31,760 --> 00:17:33,320 want. And in many cases people are 389 00:17:33,320 --> 00:17:36,200 choosing YouTube in fact. As the father of three. 390 00:17:36,480 --> 00:17:39,760 If I sit my kids down and I give them the option to watch 391 00:17:39,760 --> 00:17:41,400 Netflix. Or watch YouTube. 392 00:17:41,440 --> 00:17:44,880 They will pick YouTube. 10 times out of 10, YouTube will win 393 00:17:45,040 --> 00:17:47,520 every single time. To say that that's not 394 00:17:47,520 --> 00:17:50,440 competitive to Netflix is frankly ridiculous. 395 00:17:50,880 --> 00:17:54,680 Netflix is competing for TV watch time, so other people 396 00:17:54,680 --> 00:17:57,400 competing for TV watch time are competitors. 397 00:17:57,800 --> 00:18:00,160 YouTube is a competitor to Netflix even if they make 398 00:18:00,160 --> 00:18:02,920 different types of content, and that goes the same for all these 399 00:18:02,920 --> 00:18:04,640 type of companies they're all competing with. 400 00:18:04,840 --> 00:18:08,240 With each other for watch. Time you can include cable 401 00:18:08,240 --> 00:18:10,160 television. Cable television has been losing 402 00:18:10,160 --> 00:18:12,360 in the competition, but they're a competitor nonetheless. 403 00:18:12,760 --> 00:18:15,840 Now he goes on to outline a different type of market. 404 00:18:16,200 --> 00:18:19,240 This time, it's not just who's competing for watch time, but. 405 00:18:19,240 --> 00:18:22,200 Who's the buyer? Of this type of content, one of 406 00:18:22,200 --> 00:18:24,080 the arguments that the government will make is that you 407 00:18:24,080 --> 00:18:27,200 can't become too big of a buyer. Meaning, if you're going to make 408 00:18:27,200 --> 00:18:30,480 a movie, you can't only have one person be the buyer of that. 409 00:18:30,480 --> 00:18:33,280 Movie otherwise where will people go to sell a big. 410 00:18:33,280 --> 00:18:36,680 Budget movie if Netflix owns the entire movie business. 411 00:18:36,840 --> 00:18:38,640 And that's another concern that he addresses. 412 00:18:39,160 --> 00:18:40,960 We also think, you know, when you think about the number of 413 00:18:40,960 --> 00:18:43,440 buyers that are out there on the creator side, we've got new 414 00:18:43,440 --> 00:18:47,360 buyers coming in like Amazon, Apple, we've got the fast 415 00:18:47,360 --> 00:18:49,440 services, you know, like 2B. So there's just. 416 00:18:49,680 --> 00:18:53,120 He accurately highlights that. Even on the buying side, Netflix 417 00:18:53,120 --> 00:18:55,880 wouldn't be the only. Buyer for high budget prestige. 418 00:18:55,880 --> 00:18:58,960 Content, you have companies like Amazon that are pushing heavily 419 00:18:58,960 --> 00:19:00,760 in that, that have virtually unlimited budgets. 420 00:19:01,160 --> 00:19:03,360 As well as Apple where that is specifically. 421 00:19:03,360 --> 00:19:06,320 Their bread and butter apple. TV is specifically for high. 422 00:19:06,320 --> 00:19:09,920 Quality prestige content, big box office movies like the 423 00:19:09,920 --> 00:19:11,560 Formula One movie that they just made. 424 00:19:11,600 --> 00:19:14,040 So right now there's a lot of uncertainty, but Netflix is 1 425 00:19:14,040 --> 00:19:16,520 big step closer to actually getting this deal. 426 00:19:16,800 --> 00:19:19,000 What we're waiting for now is if Paramount comes. 427 00:19:19,000 --> 00:19:22,040 Back with a higher offer. I do think there's a pretty good 428 00:19:22,040 --> 00:19:25,400 chance they'll do that in any case, no matter which way I look 429 00:19:25,400 --> 00:19:27,280 at Netflix. I just recently bought another 430 00:19:27,280 --> 00:19:31,280 $10,000 worth of the stock and I now have it as a $120,000 431 00:19:31,280 --> 00:19:33,680 position. It's a massive position and I 432 00:19:33,680 --> 00:19:36,360 feel good having it there. I'm looking at the long term. 433 00:19:36,400 --> 00:19:38,200 I'm looking at the next 10 to 20 years. 434 00:19:38,520 --> 00:19:39,840 I want to own companies that I think. 435 00:19:39,840 --> 00:19:43,000 Will be very, very heavy. Companies I see a day when 436 00:19:43,000 --> 00:19:45,600 Netflix is above a trillion dollar market cap, I really do. 437 00:19:45,600 --> 00:19:46,880 So this is one that I like owning. 438 00:19:47,040 --> 00:19:50,680 Now moving on to some news. We had Tom Lee go on to CNBC and 439 00:19:50,680 --> 00:19:52,960 recently make a statement that's a bit different than what he 440 00:19:52,960 --> 00:19:55,280 typically does. Tom Lee is typically. 441 00:19:55,280 --> 00:19:58,880 The very bullish guy, always. Bullish and he's still bullish, 442 00:19:58,880 --> 00:20:01,480 so don't get me wrong, he's not completely changing directions. 443 00:20:01,880 --> 00:20:04,280 But he is giving more warnings now than he typically does. 444 00:20:04,560 --> 00:20:07,640 Next year there is 2 puts. There's the White House put 445 00:20:07,640 --> 00:20:10,480 still in play and the Fed put. I think it's going to come back. 446 00:20:10,480 --> 00:20:12,960 People sort of forgot like it's been dead for three years. 447 00:20:12,960 --> 00:20:14,440 It's really going to come back and forth. 448 00:20:15,160 --> 00:20:19,040 But it will take maybe the first half of the year to get through 449 00:20:19,040 --> 00:20:21,400 that because we don't have a new Fed in the first half. 450 00:20:21,400 --> 00:20:25,800 So I think the first half next year could be down 10 to 15% and 451 00:20:25,800 --> 00:20:28,920 then a big recovery. Now he's predicting a 10 to 15% 452 00:20:28,920 --> 00:20:30,840 sell off, which would be substantial. 453 00:20:31,320 --> 00:20:32,760 That's almost entering into a bear market. 454 00:20:32,760 --> 00:20:34,120 It's very similar to what we had. 455 00:20:34,120 --> 00:20:36,800 Early this year, but that was because of the the whole tariff. 456 00:20:36,800 --> 00:20:39,840 Fiasco in April. He does mention again that. 457 00:20:39,840 --> 00:20:42,360 He sees that as a. Short term thing because he 458 00:20:42,360 --> 00:20:44,920 believes a new Fed chair will come in that Trump appoints 459 00:20:44,920 --> 00:20:47,600 specifically to lower. Interest rates, which of course. 460 00:20:47,600 --> 00:20:51,960 Is interest rates go down, assets become inflated assets, 461 00:20:51,960 --> 00:20:54,840 meaning stocks. So money moves more into stocks. 462 00:20:54,840 --> 00:20:58,120 It moves out of cash as cash earns a lower yield overall. 463 00:20:58,120 --> 00:21:00,480 I agree with this thesis. Overall, I believe it's going to 464 00:21:00,480 --> 00:21:03,840 be very beneficial to have your money in assets that go up as 465 00:21:03,840 --> 00:21:06,240 interest rates go down. And that's why a lot of My 466 00:21:06,240 --> 00:21:09,280 Portfolio still remains in companies like S&P Global or 467 00:21:09,280 --> 00:21:13,200 Moody's or Equifax ones, where as interest rates go down, they 468 00:21:13,200 --> 00:21:15,080 benefit in a lot of meaningful ways. 469 00:21:15,240 --> 00:21:17,560 Now moving on, we get to an interview with Mark Mahaney. 470 00:21:17,560 --> 00:21:21,480 He talks again, trying to convince investors to not give 471 00:21:21,480 --> 00:21:23,160 up on. Google just because the stock. 472 00:21:23,160 --> 00:21:25,800 Price went up. He outlines why he believes this 473 00:21:25,800 --> 00:21:29,840 could again be proven to be another winner in 2026. 474 00:21:30,080 --> 00:21:32,480 I think the real opportunity was it was so oversold. 475 00:21:32,680 --> 00:21:34,680 I'm not sure it's overbought. I don't think it is. 476 00:21:34,680 --> 00:21:36,320 I think it kind of hold its multiple. 477 00:21:36,320 --> 00:21:38,640 It's kind of at the high end of the mag 7 in terms of the 478 00:21:38,640 --> 00:21:40,320 multiples, but I think it can hold it. 479 00:21:40,320 --> 00:21:43,600 And now it's a compounder, which means I think they can grow 20% 480 00:21:43,600 --> 00:21:45,320 a year. So the stock's got that sort of 481 00:21:45,320 --> 00:21:47,440 upside. It's not dramatic, but you know, 482 00:21:47,440 --> 00:21:49,760 it's a name that you want to stick with because they've kind 483 00:21:49,760 --> 00:21:52,560 of proven everything they sort of needed to prove, which is 484 00:21:52,560 --> 00:21:54,640 that they're successful up and down the tech stack. 485 00:21:54,960 --> 00:21:57,000 What else could get much better about Google? 486 00:21:57,000 --> 00:22:00,080 I, I think that there's a chance for a reacceleration in revenue 487 00:22:00,080 --> 00:22:03,200 at search at YouTube. Waymo's still building out and 488 00:22:03,200 --> 00:22:06,680 clouds going to be north of 40%. I think that kind of growth next 489 00:22:06,680 --> 00:22:08,320 year. So I just like the fundamental 490 00:22:08,320 --> 00:22:10,240 setup in it. If you're if you're a long term 491 00:22:10,240 --> 00:22:11,640 investor, you stick with the Google. 492 00:22:12,280 --> 00:22:14,000 Absolutely right. Investors should be sticking 493 00:22:14,000 --> 00:22:16,680 with Google. The stock is far more. 494 00:22:16,680 --> 00:22:19,120 Accurately valued today so. It's far more appropriately 495 00:22:19,120 --> 00:22:21,680 priced, but I don't believe that you should invest where as. 496 00:22:21,680 --> 00:22:24,160 Soon as the stock. Gets more appropriately priced 497 00:22:24,280 --> 00:22:26,480 to its fundamentals. Appropriately priced with 498 00:22:26,480 --> 00:22:28,240 strength that you bail on the stock. 499 00:22:28,320 --> 00:22:29,520 If you look throughout. History. 500 00:22:29,520 --> 00:22:31,640 There's time periods where good companies look like they're. 501 00:22:31,880 --> 00:22:33,720 Fair value or they're even overvalued. 502 00:22:34,040 --> 00:22:36,800 Only to continue to grow organically very strong in the 503 00:22:36,800 --> 00:22:39,000 future. And as he highlights accurately 504 00:22:39,000 --> 00:22:42,000 here again, Google remains stronger today than it's ever 505 00:22:42,000 --> 00:22:44,200 been. They're they're just nailing it. 506 00:22:44,200 --> 00:22:46,640 Their execution remains impeccable. 507 00:22:46,720 --> 00:22:49,280 They're putting out more products, more real things for 508 00:22:49,280 --> 00:22:51,640 consumers than any other company that I see. 509 00:22:51,720 --> 00:22:55,880 There's a storyline of YouTube, Waymo, Cloud, Gemini, all the 510 00:22:55,880 --> 00:22:56,960 Google. Search features that are. 511 00:22:56,960 --> 00:22:59,880 Coming out plus all these different things, the Google 512 00:23:00,080 --> 00:23:02,560 Glasses that they're coming out with that are like the meta ones 513 00:23:02,720 --> 00:23:04,240 there's. A lot of other little side bets. 514 00:23:04,720 --> 00:23:06,160 There's longshot bets that Google. 515 00:23:06,160 --> 00:23:07,760 Is doing as well that they still have. 516 00:23:07,880 --> 00:23:10,760 Working on now, he does highlight some of the challenges 517 00:23:11,000 --> 00:23:14,120 that could cause Google to go down in the short term and he. 518 00:23:14,120 --> 00:23:15,280 Highlights what those will likely. 519 00:23:15,280 --> 00:23:18,880 Be in 2026, you're going to get a new ad model at some point or 520 00:23:18,880 --> 00:23:21,200 you're just going to get an ad model coming out of ChatGPT. 521 00:23:21,200 --> 00:23:24,320 So there's going to be real competition coming after search 522 00:23:24,320 --> 00:23:26,000 dollars. We haven't seen it yet, but it's 523 00:23:26,000 --> 00:23:27,520 coming. So you got like a one or two 524 00:23:27,520 --> 00:23:29,520 pending negative catalyst. I don't think it takes the stock 525 00:23:29,520 --> 00:23:31,200 down a lot. And if it did, it'd be a great 526 00:23:31,200 --> 00:23:32,880 opportunity to leg into Google stock. 527 00:23:32,960 --> 00:23:35,280 Remember when ChatGPT was planning on doing that? 528 00:23:35,280 --> 00:23:38,160 But then Gemini 3 came out and they said that we have a Code 529 00:23:38,160 --> 00:23:39,960 Red. We have to push back those plans 530 00:23:39,960 --> 00:23:42,680 of integrating ads and instead of focus on the quality of our 531 00:23:42,680 --> 00:23:44,920 product. Well, that code Red is not going 532 00:23:44,920 --> 00:23:46,840 to last forever. Eventually they're going to say, 533 00:23:46,840 --> 00:23:49,480 OK, we need the ad dollars. We're going to make it so ads 534 00:23:49,480 --> 00:23:52,720 are baked into ChatGPT. When that happens, of course, 535 00:23:52,720 --> 00:23:55,680 that's going to be more direct competition with Google. 536 00:23:56,080 --> 00:23:59,240 And you might hear the the naysayers, you might hear the 537 00:23:59,240 --> 00:24:01,880 pessimists come out when that point happens. 538 00:24:02,320 --> 00:24:04,600 He says it if the. Stock drops if sentiment gets 539 00:24:04,600 --> 00:24:06,240 lower, if the multiple contracts. 540 00:24:06,240 --> 00:24:08,080 That of course, is a buying opportunity. 541 00:24:08,080 --> 00:24:10,520 So as far as Mark Mahaney's concerned, continue holding 542 00:24:10,520 --> 00:24:12,760 Google and buy any dips. Now, moving on, we get to the 543 00:24:12,760 --> 00:24:15,040 news that Netflix continues their streak. 544 00:24:15,040 --> 00:24:18,160 They're on a roll here, acquiring content and moving 545 00:24:18,160 --> 00:24:20,560 aggressively across across different verticals. 546 00:24:20,840 --> 00:24:23,200 This time they're pushing into podcasts. 547 00:24:23,680 --> 00:24:26,360 Now this is something that we've heard Netflix kind of toy around 548 00:24:26,360 --> 00:24:29,320 with for a while, but it hasn't really been that official. 549 00:24:29,880 --> 00:24:32,600 Now it's official Netflix. Strikes a deal with. 550 00:24:32,600 --> 00:24:37,440 IHeartMedia on video podcasts. So they're bringing exclusively 551 00:24:37,440 --> 00:24:39,800 some of the biggest video podcasts in the world onto the 552 00:24:39,800 --> 00:24:42,840 Netflix platform. They're bringing on a whole new 553 00:24:42,840 --> 00:24:46,960 type of media, one that is historically hosted on companies 554 00:24:46,960 --> 00:24:49,400 like iHeartMedia, Spotify. Or YouTube. 555 00:24:49,800 --> 00:24:52,600 But now it's on Netflix. We also have Dave Portnoy from 556 00:24:52,600 --> 00:24:54,400 Barstool doing this announcement today. 557 00:24:55,240 --> 00:24:58,240 Emergency press conference time. If you haven't heard the news, 558 00:24:58,640 --> 00:25:00,720 I'm proud to announce that Barstool is partnered with 559 00:25:00,720 --> 00:25:06,160 Netflix for three of our top podcast exclusive video only on 560 00:25:06,160 --> 00:25:09,560 Netflix starting next year. I'm talking you want to watch a 561 00:25:09,560 --> 00:25:11,680 video of part of my take Netflix. 562 00:25:11,680 --> 00:25:14,400 You want to watch a video of spit Chiclets Netflix? 563 00:25:14,400 --> 00:25:16,560 I actually spit there. That's just my brain. 564 00:25:16,640 --> 00:25:20,000 You want to watch a video of Ryan Rossello show Netflix 565 00:25:20,000 --> 00:25:23,360 Netflix Netflix. Dave Portnoy says it best there. 566 00:25:23,520 --> 00:25:25,640 Netflix, Netflix, Netflix. That seems like where a lot of 567 00:25:25,640 --> 00:25:28,280 media is going now. So I see this is making Netflix 568 00:25:28,280 --> 00:25:30,120 even more of a. Staple just a bit. 569 00:25:30,120 --> 00:25:33,000 More of a must have of general entertainment, something that 570 00:25:33,000 --> 00:25:36,520 literally every household that wants entertainment at all, 571 00:25:36,520 --> 00:25:38,880 they're going to have a Netflix subscription now, finally as we 572 00:25:38,880 --> 00:25:40,320 get. To the fail of the week we have 573 00:25:40,320 --> 00:25:41,840 yet. Another Netflix story. 574 00:25:41,840 --> 00:25:44,920 So this has been a Netflix theme today, but this one's a little 575 00:25:44,920 --> 00:25:47,080 bit different. This is not so centered around 576 00:25:47,080 --> 00:25:49,680 Netflix, but instead centered around one of their. 577 00:25:49,840 --> 00:25:51,040 Would be. Directors. 578 00:25:51,120 --> 00:25:53,320 His name is Carl Wrench, and he was. 579 00:25:53,320 --> 00:25:55,800 The director of 47. Ronan, that was the one with 580 00:25:55,800 --> 00:25:58,520 Keanu Reeves. So he has a history in 581 00:25:58,520 --> 00:26:00,000 Hollywood. He's directed some cool movies 582 00:26:00,000 --> 00:26:03,640 before and it looks like he's going to be serving time in jail 583 00:26:03,840 --> 00:26:05,440 and one of my. Favorite subjects to go? 584 00:26:05,440 --> 00:26:08,760 Over is true crime and specific true financial crime. 585 00:26:08,920 --> 00:26:10,920 I like looking at. Stories of people like Trevor. 586 00:26:10,920 --> 00:26:14,720 Milton, Elizabeth Holmes, Bernie Madoff, different fraudsters and 587 00:26:14,720 --> 00:26:17,680 looking at what they did because eventually they do get caught 588 00:26:17,920 --> 00:26:19,520 and. You have stories like this. 589 00:26:20,120 --> 00:26:22,920 This is the story of. Director Carl Rench, who This is 590 00:26:22,920 --> 00:26:25,040 an ongoing. Story, but so far he. 591 00:26:25,040 --> 00:26:28,200 Has been officially found guilty of swindling Netflix out of $11 592 00:26:28,200 --> 00:26:30,880 million. Now this director, he's standing 593 00:26:30,880 --> 00:26:34,320 up in court and he's chalking. All this up to a. 594 00:26:34,400 --> 00:26:35,920 Simple misunderstanding, he's saying. 595 00:26:35,920 --> 00:26:38,040 Look guys, I didn't swindle you out of anything. 596 00:26:38,040 --> 00:26:40,600 We just had some miscommunications. 597 00:26:40,600 --> 00:26:44,160 Money went the wrong direction in a few cases, but I didn't do 598 00:26:44,160 --> 00:26:46,280 anything wrong, just a just a misunderstanding. 599 00:26:46,280 --> 00:26:49,240 An $11 million misunderstanding happens all the time in business 600 00:26:49,240 --> 00:26:51,040 right now. The facts of the case make it 601 00:26:51,040 --> 00:26:53,680 look a little different than a simple misunderstanding. 602 00:26:54,160 --> 00:26:56,720 First of all, he has. Maintained that he completed 603 00:26:56,880 --> 00:27:00,080 principal photography on the first season of a show and 604 00:27:00,080 --> 00:27:01,720 needed the money. For pre. 605 00:27:01,720 --> 00:27:05,280 Production on a season 2. So he's saying that he just 606 00:27:05,280 --> 00:27:06,960 needed the money for pre production. 607 00:27:07,480 --> 00:27:09,200 Different parts of the. Process of producing this 608 00:27:09,200 --> 00:27:12,520 content, But Netflix says they never ordered a second season 609 00:27:13,000 --> 00:27:15,920 and has said that the first was far from complete in closing 610 00:27:15,920 --> 00:27:18,840 arguments on Wednesday. Prosecutors argued that Rynch 611 00:27:18,840 --> 00:27:20,240 had. Deliberately concealed his 612 00:27:20,240 --> 00:27:23,560 motives for obtaining the money before going on a lavish 613 00:27:23,560 --> 00:27:26,240 spending spree and that. To believe otherwise would 614 00:27:26,240 --> 00:27:28,240 require. Ignoring all evidence in the 615 00:27:28,240 --> 00:27:31,520 case at the time, the COVID pandemic was beginning to spread 616 00:27:31,520 --> 00:27:34,480 around the globe and according to the prosecution, Rynch 617 00:27:34,480 --> 00:27:38,640 gambled millions on Galette. This is a pharmaceutical company 618 00:27:38,880 --> 00:27:40,800 ultimately incurring steep losses. 619 00:27:41,200 --> 00:27:45,120 He also spent heavily on luxury cars, antique furniture and high 620 00:27:45,120 --> 00:27:47,880 end mattresses, among other extravagances. 621 00:27:48,320 --> 00:27:50,560 Daniel McGinnis, Rynch's defense lawyer. 622 00:27:50,880 --> 00:27:52,920 Argued that the luxury purchases were a red. 623 00:27:52,920 --> 00:27:56,160 Herring and had no bearing on the case and that his clienteer 624 00:27:56,160 --> 00:27:58,000 Rynch was in a state of. Psychosis. 625 00:27:58,000 --> 00:28:01,280 So so when you. Are borrowing money from 626 00:28:01,280 --> 00:28:02,680 Netflix? When you're using that money to 627 00:28:02,680 --> 00:28:05,680 produce a film, you can throw it into stocks and buy expensive 628 00:28:05,680 --> 00:28:09,000 cars and furniture and then just claim that you're in a state. 629 00:28:09,000 --> 00:28:11,320 Of psychosis. Claim that you have some some 630 00:28:11,320 --> 00:28:14,960 mental thing going on and whoops to Daisy you spent $11 million 631 00:28:14,960 --> 00:28:16,680 on the wrong stuff. That's what the lawyer's. 632 00:28:16,680 --> 00:28:19,680 Saying, but then Rynch himself is actually undercutting. 633 00:28:19,680 --> 00:28:22,480 What the lawyer's actually. Stating instead, Rynch testified 634 00:28:22,720 --> 00:28:25,560 that his purchases were entirely legitimate and that the Rolls 635 00:28:25,560 --> 00:28:27,360 Royce, for instance, were needed. 636 00:28:27,360 --> 00:28:30,360 For the show, prosecutors urged the jury. 637 00:28:30,360 --> 00:28:31,920 Not to buy it. He lied to you. 638 00:28:32,000 --> 00:28:34,280 He thought he could trick. You just like Netflix. 639 00:28:34,360 --> 00:28:36,760 Now of course, the jury didn't buy this BS and they found him 640 00:28:36,760 --> 00:28:38,640 guilty, so now he's awaiting sentencing. 641 00:28:38,640 --> 00:28:40,720 That will likely happen in April of next year. 642 00:28:40,760 --> 00:28:42,960 So the story continues and we'll see what happens during 643 00:28:42,960 --> 00:28:45,280 sentencing. There's common themes amongst 644 00:28:45,320 --> 00:28:49,280 every single financial crime and probably the most common amongst 645 00:28:49,280 --> 00:28:51,400 all of them. One that's universally shared 646 00:28:51,400 --> 00:28:54,720 amongst almost every single financial crime is when you 647 00:28:54,720 --> 00:28:57,560 borrow someone else's money, or when you get a loan, or when you 648 00:28:57,560 --> 00:29:00,720 get money given to you for some reason, some specific stated 649 00:29:00,720 --> 00:29:02,080 reason you actually. Have. 650 00:29:02,080 --> 00:29:05,000 To do with that money what you say we're going to do if you do 651 00:29:05,000 --> 00:29:07,840 something different that's illegal and that's what so many. 652 00:29:07,840 --> 00:29:11,360 Cases like this do they? Get money from someone, A bank? 653 00:29:11,600 --> 00:29:15,520 They get money from a studio, They get money from investors no 654 00:29:15,520 --> 00:29:18,680 matter what they're doing, they get money from other people on 655 00:29:18,680 --> 00:29:21,080 false premises and they do something different with that 656 00:29:21,080 --> 00:29:22,320 money. And it looks like it's going to 657 00:29:22,320 --> 00:29:24,000 be no different here for Carl Wrench. 658 00:29:24,040 --> 00:29:27,080 Instead of using that $11 million to make a really cool 659 00:29:27,080 --> 00:29:29,440 show for Netflix and studies chosen to. 660 00:29:29,480 --> 00:29:31,760 Use it selfishly. Gamble with it, spend it on 661 00:29:31,760 --> 00:29:35,840 luxury goods and squander away along with his reputation and 662 00:29:36,200 --> 00:29:37,800 potentially landing himself jail time. 663 00:29:38,200 --> 00:29:41,440 So this was an epic failure in judgement, something that 664 00:29:41,440 --> 00:29:43,880 hopefully he won't do again after he's released from jail. 665 00:29:43,960 --> 00:29:45,160 Hopefully he's learned a good lesson. 666 00:29:45,200 --> 00:29:46,880 That's all for this time. See in the next one.