Podcast Summary

Podcast: Brew Markets
Host: Anne Berry
Episode: Paramount Gets Hostile Over Netflix-WBD Deal & Ulta: Beauty's Beast is Back
Date: December 8, 2025

Episode Overview

This episode dives deep into two blockbuster stories shaking up the markets. First, Ulta Beauty's resurgence and stellar quarterly earnings are dissected, with a close look at their turnaround strategies and global ambitions. The main event is the Hollywood drama: a bidding war for Warner Brothers Discovery (WBD), where Netflix and Paramount are going head-to-head with eye-popping offers—culminating in Paramount launching a hostile, all-cash bid. The hosts analyze the deals, regulatory risks, and the massive implications for streaming, traditional media, and Hollywood as a whole. The team also touches on Berkshire Hathaway's executive shakeup and IBM's tech acquisition, before wrapping up with the stakes of the imminent Federal Reserve decision.

1. Ulta Beauty: Turnaround Success (01:14–04:57)

Key Points

• Ulta's Impressive Comeback:
  Anne Berry highlights Ulta Beauty’s third-quarter earnings, with same-store sales up 6.3% (a huge leap from last year's 0.5%). Revenue topped $2.8 billion, beating expectations and raising annual earnings guidance.

  • "All of this washed down with a healthy increase in earnings guidance for the full year. Well, this caught my eye for a lot of reasons, so I was excited to dig in." – Anne Berry (01:38)

• CEO Keisha Stillman's 'Ulta Beauty Unleash' Strategy:

  • Focused on retail fundamentals: streamlined stocking, improved staffing and cleanliness, enhanced digital experiences, and better leveraging Ulta’s 45 million+ loyalty members.
  • Execution, not just vision, is credited for driving results.

• Three Drivers of Optimism:

  1. UB Marketplace:
     Ulta’s new e-commerce platform for emerging brands is just getting started, included in earnings for only the last two weeks of the quarter but expected to grow rapidly (03:30).
  2. In-Store Salon Network:
     Ulta quietly operates one of the largest salon networks in the US, now hosting nearly 33,000 in-store events last quarter—turning stores into experience destinations.
  3. Global Expansion:
     Ulta is integrating UK’s Space NK, opened its first Middle East store in Kuwait, and launched seven stores in Mexico.

• Market Response:
  Ulta shares surged over 10% to all-time highs on Friday, up 35% for the year.

  • "The market is catching some faith...we are definitely tracking this one through the holiday shopping season." – Anne Berry (04:28)

2. Hollywood’s Hostile Showdown: Netflix vs. Paramount for WBD (05:28–22:40)

Setting the Stage

• WBD received unsolicited bids from Paramount, Skydance, and others before officially putting itself up for sale.
• Netflix initially appeared the winning bidder with an $83B offer—but Paramount escalated to a hostile, all-cash bid.

Who’s Buying What? (05:28–08:38)

• Netflix Offer:
  Bids only for WBD’s studios and streaming assets (not the whole company).

  • $23.35 per share in cash + $4.50 in Netflix stock per WBD share.
  • Leaves WBD as a public company holding cable/news assets (TNT, CNN, etc.).
  • Willing to pay a $5.8B termination fee if deal falls through.

• Paramount Offer:
  Offers $30 per share, all cash, to buy WBD in its entirety—including cable channels and news.

  • Hostile bid, going directly to shareholders, valued at $108.4B.
  • $5B termination fee.

Regulatory and Market Risks (09:15–11:42)

• Netflix:

  • Regulatory risk centers on creating the largest streaming platform in the US (Netflix + HBO Max), possibly leading to antitrust obstacles.
  • Netflix shares dropped after the bid, suggesting investor unease.

• Paramount:

  • Combining two studios (Paramount and Warner Bros), plus cable and news, raises even broader antitrust concerns.

  • Stock jumped 7.5% on the hostile bid news, indicating Wall Street enthusiasm.

  • "Wall Street saying, this would be great. We want this to work for Paramount." – John Croteau (11:31)

Hollywood’s Reaction (11:42–14:01)

• Deep skepticism in creative circles about Netflix as a consolidator; fears over job cuts and fewer buyers in the market.

• Netflix plans to keep Warner Bros’ studios/theatrical releases but is projected to cut $2–3B in costs by year three (Hollywood sees this as a sign of cuts).

  • "That sounds like job cuts to me and it certainly seems to be the thing that Hollywood really is focusing on." – Anne Berry (12:53)

• Anne spots another asset Netflix may be targeting: Warner's Global Experiences/Merchandising division (licensing deals with theme parks, e.g., Harry Potter), which could supercharge Netflix's ambitions to monetize its IP beyond streaming.

Strategic and Regulatory Nuance (15:09–17:45)

• Paramount’s all-cash bid is partly underwritten by $24B from Saudi Arabia's Public Investment Fund and other sovereign entities, with Jared Kushner’s investment firm also involved.

  • "Paramount did make it clear that those three sovereign wealth funds though providing capital, would not have any governance rights including board seats. So that is just an important technical point." – Anne Berry (16:53)

• Both Netflix and Paramount are lobbying the White House, with Trump signaling he’ll be involved in regulatory approval. Both companies have been courting him, and his stance appears neutral so far.

• Senator Elizabeth Warren weighs in:

  • Argues the Netflix combination would give it "close to half of the streaming market" and drive up consumer costs (e.g., a tongue-in-cheek warning: "Watching your favorite TV shows like Friends is going to get more expensive").

Market Sentiment, Prediction & Next Steps (20:26–22:40)

• Prediction Markets:
  Odds of Netflix closing the deal by end of 2026 have dropped from 23% to 16% post-Paramount’s bid.
• Share Prices:
  • Netflix down ~4% (investors nervous).
  • Paramount up 7.5% (enthused about the bold move).
  • WBD up over 3%, shareholders "very, very, very happy" with the bidding contest.
• What's Next:
  The WBD board faces pressure to weigh “certitude” (Paramount’s all-cash) vs. “value” (Netflix’s creative structure), with risk of litigation and an epic corporate showdown expected.

Notable Quotes & Moments

• "This is the kind of merger moment that has all the things that we love talking about. So we've got a lot to unpack." – Anne Berry (05:38)
• "Hollywood...Unhappy." – John Croteau (12:07)
• "Paramount Skydance CEO David Ellison said shareholders deserve an opportunity to consider our superior all cash offer." – John Croteau (15:09)
• "President Trump is playing nicely with both... backing no one explicitly right at this moment." – Anne Berry (17:45)

3. Quick Market Headlines & Analysis (23:40–26:22)

Berkshire Hathaway Shakeup

• Todd Combs, one of Buffett’s 'investing quarterbacks' and CEO of Geico, is leaving Berkshire to head a new investment group at JPMorgan, reporting to Jamie Dimon.
  • Anne speculates it's a succession move: "This to me puts him in the running for succession planning for JP Morgan. And I think this is Jamie Dimon making a really, really smart hire." (24:46)
  • Jamie Dimon's age discussed—"Looks fantastic. Yeah. Great energy." (25:11)

IBM Buys Confluent

• IBM is acquiring data-streaming platform Confluent for $11 billion.
  • Confluent processes real-time streaming data, crucial for cleaning and accelerating data for AI models.
  • Confluent shares jumped 29%, "nearly 30%" on deal announcement.

Federal Reserve Watch

• It’s "Fed Week", with key meetings and a possible December rate cut announcement expected Wednesday.

Timestamps for Key Segments

• Ulta Beauty Turnaround: 01:14–04:57
• Hollywood's Netflix-Paramount Bidding War: 05:28–22:40
• Berkshire/Combs Shakeup: 23:40–25:11
• IBM Acquires Confluent: 25:11–25:42
• Fed Rate-Cut Watch: 25:42–27:26

Tone

Anne Berry maintains a breezy but incisive style, mixing financial savvy with humor ("literally bringing out the popcorn") while John Croteau offers informed, sometimes droll, counterpoints. Their role play, especially Anne's mock-Netflix "English accent," keeps things engaging even amid heavy finance talk.

Final Takeaways

• Ulta Beauty’s turnaround is a case study in execution and retail fundamentals, turbocharged by digital and global expansion.
• The Netflix vs. Paramount battle for WBD is one of Hollywood’s most consequential—and complicated—merger dramas in years, with huge regulatory, political, and creative industry ramifications.
• Berkshire and IBM made big strategic moves, while the Fed’s impending decision looms over the market.

This episode is a must-listen for anyone tracking media mergers, retail turnarounds, or the current pulse of Wall Street.