Bloomberg Intelligence Podcast

Episode: Warner Bros Reopens Talks as Paramount Signals Higher Bid
Date: February 17, 2026
Hosts: Paul Sweeney & Scarlet Fu

Episode Overview

This episode dives into several timely and complex investment themes, headlined by the evolving merger talks between Warner Bros. Discovery and Paramount, with Netflix in the background. The hosts enlist Bloomberg Intelligence analysts to break down the financial, strategic, and industry implications. Additional segments provide analysis on AI’s growing role in defense tech (Anthropic), healthcare innovation and regulatory risk (Moderna/Merck), and trends within U.S. REITs, focusing on the impact of AI and the outlook for office and senior housing sectors.

Key Discussion Points & Insights

1. Warner Bros & Paramount Reopen Merger Talks (02:40–07:06)

• Developing Story: Warner Bros. Discovery is now more receptive to acquisition talks with Paramount after Paramount signaled willingness for a higher bid (but hasn’t formally increased its offer yet). Netflix remains entangled with a prior deal, adding complexity.
• Paramount’s Current Offer (as of Feb. 10):
  • $30/share all-cash offer for Warner Bros. Discovery.
  • Paramount agreed to pay Warner Bros’ $2.8B termination fee owed to Netflix if that deal is broken.
  • Promise to assist with Warner Bros's $15B bridge loan.
  • Reimbursement for up to $1.5B in possible fees to Warner Bros bondholders (if a needed debt exchange fails).
• Leverage Concerns: The combined company would carry about $85B of total debt, with a pro forma EBITDA of ~$12B, translating to roughly 7x leverage—a notably high figure.
  • Analyst Stephen Flynn: “If you give [the companies] credit for the ~$6B in cost synergies they expect, you get to $18B EBITDA, but even then, you’re well over four times leverage” (04:33).
  • Critical question: What will the credit rating agencies do? $54B in new financing could be more senior than legacy debt if structured correctly, possibly qualifying for investment-grade ratings.
• Historical Context: Warner Bros. had high leverage post-merger with Discovery and struggled to deleverage. The risk remains that this combined company could face similar, protracted debt reduction challenges.
• Analogy: Comparison to Charter Communications’ split capital structure—secured debt at IG ratings, unsecured at high yield. Even with optimistic synergy estimates, execution risk is significant.
  • Host: “Well, there's a lot of ifs there.” (05:51)
  • Flynn: “Yes, there is. There's a lot of ifs there.” (05:53)

2. AI & Defense: Anthropic’s Contract Negotiations with the Pentagon (10:21–14:06)

• Context: Anthropic, renowned for its Claude LLM, is renegotiating a Pentagon contract to include “AI constitution” guardrails, designed to constrain certain surveillance and operational uses.
• Insight:
  • Mandeep Singh: “[Palantir] made a name for themselves in…the kind of work these LLM companies…are being tasked to do for the Department of War. Now…these LLMs…can ingest large amounts of data and do analytics at a level we have not seen” (10:43).
  • Government wants maximal capabilities for national security, while Anthropic emphasizes ethical guardrails, creating friction.
• Competitive Landscape: The Department of War is engaging with multiple LLM providers—Anthropic, Google Gemini, xAI’s Grok (which holds a $200M contract)—for redundancy and breadth.
  • Singh: “No one else like ChatGPT has talked about guardrails in such a big way as Anthropic has. That’s the big distinction.” (12:22)
• Market Implications:
  • Anthropic just raised $30B and is likely to go public in 2026, as is OpenAI, reflecting investor optimism in dual defense and commercial applications.
  • “They’re good fundraisers and will most likely go public this year…they want to show they are addressing a lot more areas…high chance we’ll see IPOs.” (13:30)

3. Healthcare: Moderna & Merck’s Melanoma Drug + FDA Risks (17:20–21:58)

• Innovative Cancer Therapy: Moderna and Merck are testing a therapy that combines a personalized vaccine (using tumor material) with immune system activation—a high-impact 2026 catalyst.
  • Concerns: Phase 2 data was hard to interpret due to unusual control group results. The phase 3 trial enrolls healthier patients, making comparison tricky. There’s also a possible confounding effect from Covid vaccines in the control arm.
    • Sam Fazelli: “That initial data that looked great didn’t behave as we thought it should have…” (17:43)
• Vaccine Approval Challenges:
  • Moderna’s mRNA flu vaccine faced a surprise filing rejection by the FDA despite prior guidance.
    • Fazelli: “It blew my mind, I have to say.” (19:24)
    • Complaints about outdated flu shot selection/approval timelines and potential for mRNA tech to close that gap.
    • “This could have been the approval that the world needs. …Unfortunately, the person at the head of the division of the FDA … made a decision, unilaterally by the look of it, that he doesn’t want to review this file. …It just doesn’t make any sense.” (20:00)
• Industry Impact: Regulatory unpredictability is harder for biotech than pharma giants, given startups' cash constraints.
  • “It is a problem for the biotech sector more than the pharmacy.” (21:57)

4. Real Estate Investment Trusts (REITs): AI, Office, and Senior Housing (25:13–29:46)

• AI Fear in REITs: Concern that AI will dramatically reduce office space demand, compounded by last week’s broad selloff in real estate and adjacent sectors.
• Current Data:
  • Jeff Langbaum: “We’ve seen some of the opposite. Leasing velocity has been at the highest level since before the pandemic in…New York and San Francisco.” (26:05)
  • AI firms are active lessees, offsetting downsizing by other tenants.
  • Real-time surveys indicate firms are expanding to leverage AI, suggesting continued (or protracted) leasing strength.
    • “Firms are actually leasing more space. …That could actually … prolong the positive vibes for some time.” (27:30)
• Favorite REIT Sector: Senior housing cited as having an unassailable demand story due to demographics—aging U.S. population and very limited new supply, constrained by high capital costs.
  • “You cannot refute the demand story at all…there’s not much senior housing coming out of the ground. So, there’s a huge supply-demand imbalance.” (28:22)
• Investment Nuance: Local operator quality is key to success in senior housing, but overall it's a robust, nationwide demand story.

Notable Quotes & Memorable Moments

| Timestamp | Speaker | Quote/Insight | |-----------|---------|---------------| | 04:33 | Stephen Flynn | "Warner Brothers Discovery would have about $85 billion of total debt pro forma for this deal…Just basic math. You're talking seven times leverage. That's obviously huge." | | 05:51 | Host | "Well, there's a lot of ifs there." | | 05:53 | Stephen Flynn | "Yes, there is. There's a lot of ifs there." | | 10:43 | Mandeep Singh | "These LLMs...can ingest large amounts of data and do analytics at a level we have not seen." | | 12:22 | Mandeep Singh | "No one else like ChatGPT has talked about guardrails in such a big way as Anthropic has. That's the big distinction." | | 17:43 | Sam Fazelli | "[W]e look for problems...the phase two data wasn't as easy to interpret because...the initial data that looked great didn't behave as we thought it should have done." | | 19:24 | Sam Fazelli | "It blew my mind, I have to say." (On FDA flu vaccine filing rejection) | | 20:00 | Sam Fazelli | "[The FDA head] made a decision, unilaterally by the look of it, based on...he doesn’t want to review this file. ...It just doesn’t make any sense." |
| 26:05 | Jeff Langbaum | "Leasing velocity has been at the highest level since before the pandemic in markets like New York and San Francisco." | | 28:22 | Jeff Langbaum | "You cannot refute the demand story at all…there’s not much senior housing coming out of the ground. So, there’s a huge supply-demand imbalance." |

Timestamps for Major Segments

• Warner Bros/Paramount Deal Analysis: 02:40–07:06
• AI, Anthropic & Defense: 10:21–14:06
• Healthcare: Moderna/Merck Drug & FDA Risk: 17:20–21:58
• REITs: AI, Office Demand & Senior Housing: 25:13–29:46

Tone & Style

The episode maintains a thoughtful, analytical, and occasionally skeptical tone, especially around deal complexities and regulatory unpredictability. Analyst guests speak directly with technical and financial precision, while hosts interject to surface real-world parallels and investor concerns.

Summary Takeaways

• The Warner Bros/Paramount mega-deal reflects both high strategic ambition and big financial risk, especially around leveraging, debt structure, and execution.
• AI’s defense applications are quickly broadening through LLM contracts, raising both ethical issues (Anthropic’s guardrails) and investment opportunity (imminent IPO activity).
• Healthcare innovation faces regulatory headwinds; Moderna’s case spotlights how sudden changes at the FDA can disrupt even well-prepped biotech strategies.
• Office REITs are managing through AI-fueled fears with strong current leasing data, while senior housing emerges as a demographic-driven winner constrained only by capital access.

This summary captures the episode’s main currents and delivers actionable insights for investors, industry professionals, and any listener tracking the intersection of M&A, AI development, healthcare innovation, and real estate investment.