Power and politics in the Warner Bros. deal

Summary

Marketplace Morning Report: Power and Politics in the Warner Bros. Deal

Date: December 19, 2025
Host: David Brancaccio
Featured Guest: Eric Gordon, University of Michigan Ross School of Business

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Overview

This episode focuses on the high-stakes mergers and acquisitions drama surrounding Warner Bros. Discovery, with major players like Netflix and Paramount vying for the media giant. The discussion delves into how presidential politics—especially under President Trump—might influence regulatory approval of such mega-mergers, drawing from past antitrust interventions. Additional coverage includes brief updates on TikTok’s ownership shakeup and the latest on inflation data that’s leaving financial markets uncertain.

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Key Discussion Points & Insights

1. TikTok’s U.S. Ownership Deal

[01:30 – 02:55]

• Overview: TikTok is on the verge of a major ownership change to comply with U.S. legal requirements.
  • Details: A joint venture will give 80% of TikTok’s U.S. arm to Oracle, Silver Lake, and MGX (Abu Dhabi), leaving 20% with ByteDance.
  • Authority: The American TikTok will have independent control over US data, algorithm, content moderation, and software.
  • Regulatory Hurdles: The deal must pass U.S. and Chinese regulatory scrutiny.
• Quote:
  • Nancy Marshall Genzer: “The deal is expected to close on January 22. Congress passed a law last year banning TikTok unless most of its US operations were spun off.” [02:29]

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2. Markets React to Murky Inflation Data

[02:55 – 04:24]

• Bond Market: 10-year rate rises to 4.15% as the bond market reacts to unreliable inflation statistics following a government shutdown.
• Data Integrity Issues: October CPI figures (esp. rent data) were disrupted, making analysts wary.
• Economist’s Take:
  • Christopher Lowe: “The issue is if they got that piece wrong, what's to say they didn't make similar errors in the rest of the report?” [03:30]
  • “It was a good report, but I need more data. And Mr. Goolsbee may be needing more data for a very long time.” [03:44]

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3. Warner Bros. Mega-Merger: Players, Politics, and Presidential Power

[04:51 – 08:30]

The Bidders and the Stakes

• Netflix: Offers for Warner Bros. Discovery (excluding legacy cable properties like CNN) align with Warner executives’ apparent preferences.
• Paramount: Also bids aggressively, but Warner management is reportedly less favorable.
• Shareholder and Regulator Unknowns: Market and regulatory responses remain uncertain; presidential preferences could tip the balance.

Presidential Power and Antitrust

[05:45 – 06:28]

• Past Precedent:
  • Host: “Biden people did it. Trump people also seem aware of the power they have over these deals, wouldn't you say?”
  • Eric Gordon: “Oh, Trump knows about how antitrust works. In his first administration, he presided over the AT&T–Time Warner deal, which he opposed. In fact, the government sued the companies to block the merger. The government lost and the merger went forward. On the other hand, he gave a green light to the merger between Sprint and T-Mobile. So he knows about presidential power in deals.”

Affinities and Enmities: Trump in the Middle

[07:00 – 07:29]

• Complicated Allegiances:
  • Eric Gordon notes Trump’s dislikes and alliances: “President Trump really hates CBS—that’s now part of Paramount. He doesn’t like CNN... He’s been supported by Larry Ellison, who supports the Paramount bid. You sort of wonder, does it depend on what day of the week it is? The president wakes up and says, well, today I dislike this side more than I dislike that side. That could determine the government's position.”

Contrasts with Biden’s Industrial Policy

[07:29 – 07:59]

• Style Difference:
  • David Brancaccio: "This president is very committed to keeping his hands on the lever of the private sector ... He had a view on the logo of the Cracker Barrel chain. He doesn't hesitate to get in the center of it."
  • Eric Gordon: “President Biden actually intervened a lot, but it seemed to be more as a matter of broad policy. Sometimes with Mr. Trump, it just seems to be what caught his attention or what he's personally interested in. And that's a really different use of the presidency.”

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Notable Quotes & Memorable Moments

• Eric Gordon on Trump’s Approach:
  • “Sometimes with Mr. Trump, it just seems to be what caught his attention or what he’s personally interested in. And that’s a really different use of the presidency.” [07:59]
• Eric Gordon on Presidential Influence:
  • “Does it depend on what day of the week it is? The president wakes up and says, well, today I dislike this side more than I dislike that side.” [07:18]
• Christopher Lowe on Data Reliability:
  • “If they got that piece wrong, what's to say they didn't make similar errors in the rest of the report?” [03:30]

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Timestamps & Key Segments

• [01:30] – TikTok’s ownership revamp explained
• [02:55] – Market update and CPI/inflation data issues
• [04:51] – Warner Bros. deal: merger suitors and implications
• [05:45] – Presidential power in M&A: Trump’s antitrust record
• [07:00] – Trump’s conflicting media loyalties and political unpredictability
• [07:29] – Comparing Trump vs. Biden in market interventions
• [08:22] – Closing remarks from Eric Gordon

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Summary

This brisk episode connects sweeping changes in the media landscape—highlighting the Warner Bros. Discovery bidding war—to the unpredictable sway of presidential politics in antitrust oversight. By comparing Biden’s policy-driven approach with Trump’s more personal and erratic interventions, the show frames M&A in the entertainment sector not just as a business story, but a political power play with major stakes for American media.

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Useful for:

• Listeners interested in the intersection of business, politics, and media
• Those tracking the future of Warner Bros., Netflix, and Paramount
• Anyone wanting concise insights on how presidential attitudes can rewrite deal-making rules

Transcript

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[David Brancaccio]

TikTok USA has moved a lot closer to getting a set of North American and Middle Eastern based owners. I'm David Brancaccio in Los Angeles. TikTok has reached a deal that will allow it to keep operating in the U.S. according to the Reuters news agency, the very popular short video and advertising app will form a joint venture with a group of investors based in the U.S. and in Abu Dhabi. Hobby Marketplace's Nancy Marshall Genzer has details.

[Nancy Marshall Genzer]

Under the deal, U.S. investors will buy most of TikTok's American operations. The agreement is outlined in an internal TikTok memo seen by Reuters. It says 80% of the new American version of TikTok will be owned by three investors, the Cloud services company Oracle, the Silver Lake investment firm, and the MGX investment company based in Abu Dhabi. The rest will be retained by TikTok's parent company, ByteDance. The memo says the American branch of TikTok will operate independently and it will have authority over US data protection, algorithm security, content moderation, and software assurance, the memo says. The deal is expected to close on January 22. Congress passed a law last year banning TikTok unless most of its US operations were spun off. President Trump delayed enforcement of the law. The deal will probably need to be approved by regulators in the US And China. I'm Nancy Marshall Genser for Marketplace.

[David Brancaccio]

The bond market is down this morning, pushing the 10 year interest rate up to 4.15%. Yes, the long delayed Consumer Price Index yesterday did show inflation coming down, but that data was a mess. The government shutdown obliterated the October data and government statisticians were left scrambling to try to plug the holes in key price information such as what we pay for rent. Christopher Lowe is chief economist at FHN Financial.

[Christopher Lowe]

This is the bigger issue with the bond market because we can calculate what the CPI did. Excluding shelter, it was still down 3 10, almost as much as the 410 in the headline index. The issue is if they got that piece wrong, what's to say they didn't make similar errors in the rest of the report? As Chicago Fed President Austan Goolsbee said yesterday, it was a good report, but I need more data. And Mr. Goolsbee may be needing more data for a very long time.

[David Brancaccio]

Christopher Lowe is chief economist at FHN Financial. Checking the numbers with the stock market open, The Dow is up 242points 0.5%. The S&P is up 7.10%. The Nasdaq is up 1%.

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[David Brancaccio]

So what does this. Have to do with this? Have to do with this? That last one Netflix wants to buy the first one, Warner Brothers Discovery. The middle one is Paramount. Also wants Warner's, which likes Netflix and doesn't like Paramount. But there's another iconic logo that has a major role in this mergers and acquisitions saga. It's usually rendered in gold and spelled T R U M P. Any variation of this merger remaps America's entertainment industry. Let us consult Eric Gordon, a professor at the University of Michigan's Ross School of Business. He also teaches mergers and acquisitions at the law school there hey, Eric.

[Christopher Lowe]

Hello, David.

[David Brancaccio]

I guess it's MNA 101. Eric, you teach the course. Administrations review deals of this scale to make sure they don't create an unfair monopoly. Biden people did it. Trump people also seem aware of the power they have over these deals, wouldn't you say?

[Eric Gordon]

Oh, Trump knows about how antitrust works. In his first administration, he presided over the AT&T time Warner deal, which he opposed. In fact, the government sued the companies to block the merger. The government lost and the merger went forward. On the other hand, he gave a green light to the merger between Sprint and T Mobile, the two cell phone companies. So he knows about presidential power in deals.

[David Brancaccio]

Let's cut back to Hollywood here. Jump cut. Warner Brothers Discovery. Netflix has offered a lot of money for it, minus old school cable properties like cnn. Management over there likes the Netflix deal. But then rival Paramount is also dangling a lot of money in a proposed deal that the Warner Brothers people don't like. We don't know what shareholders want yet. We don't know what antitrust regulators might think. And there's the matter of which company the President of the United States likes or doesn't like in this case. Right.

[Eric Gordon]

And that's a little hard to figure out because President Trump really hates cbs. That's now part of Paramount. He doesn't like cnn. He has been supported by Larry Ellison, who supports the Paramount bid. You sort of wonder, does it depend on what day of the week it is? The president wakes up and says, well, today I dislike this side more than I dislike that side. That could determine the government's position.

[David Brancaccio]

President Biden and many of his predecessors had industrial policy and would intervene sometimes in the private sector and markets sometimes. But this president is very committed to keeping his hands on the lever of the private sector. I mean, he's sometimes talking about ousting CEOs. He had a view on the logo of the cracker barrel chain. He doesn't hesitate to get in the center of it.

[Eric Gordon]

I mean, he, in his way, intervenes in things where sometimes you're surprised he even notices them. President Biden actually intervened a lot, but it seemed to be more as a matter of broad policy. Sometimes with Mr. Trump, it just seems to be what caught his attention or what he's personally interested in. And that's a really different use of the presidency.

[David Brancaccio]

Eric Gordon with the University of Michigan's Ross School of Business and the Law school at Michigan. He's also a former antitrust lawyer. Thank you very much.

[Eric Gordon]

My pleasure, David.

[David Brancaccio]

And in Los Angeles, I'M David Brancaccio. This is the Marketplace Morning Report from apm, American Public Media. As we head toward the end of the year, Marketplace is here to help you make sense of the economy, what's happening, why it matters, and how it affects you. If this reporting has been valuable to you in 2025, consider becoming a Marketplace investor. Your support powers independent journalism that cuts through the noise and delivers clarity when it counts. Donate [e-mail] or click the link in the show Notes.