Prof G Markets – Episode Summary
Netflix Wins the Warner Bros. Bidding War
December 8, 2025
Hosts: Scott Galloway & Ed Elson

Episode Overview

This episode dives deep into the seismic news that Netflix has officially outbid competitors and secured an agreement to acquire Warner Bros. Discovery for $72 billion plus debt. Scott and Ed analyze the deal’s implications for the entertainment and media landscape, its antitrust prospects, market reactions, and the fallout for rivals. They also discuss broader market trends including the future of AI IPOs, the U.S. government’s new “Trump Accounts” policy for newborns, and issues of inequality and investing in children.

Key Topics & Insights

1. Netflix Acquires Warner Bros. Discovery: The Bidding War (11:03 – 27:28)

The Story:

• Netflix wins a $72B (+ debt) deal for Warner Bros. Discovery (WBD). Discovery’s linear networks, including CNN, will be spun out. Netflix stock dropped 4% pre-market; WBD rose 4%.
• Both hosts admit they were surprised ("We were wrong," Ed, 11:21). They’d predicted the Ellison family would win through Skydance/Paramount.

Market & Industry Dynamics:

• Scott: "I don't think the deal's going to close, Ed. I think it'll be blocked." (11:51)

  • He believes U.S. regulators and antitrust concerns will likely prevent the merger.
  • Netflix would command enormous power: “largest subscriber base, one of the largest libraries of premium scripted content, some of the most valuable franchises in entertainment: HBO, DC, Harry Potter.” (14:36)
  • The merger could limit consumer choice, increase prices, lower creative salaries, and shrink competition.
  • "It ends up lowering the salaries of creatives because there's fewer bidders for their talent." (15:36)
  • “I just think they become unassailable.” (15:13)

• Regulatory & Political Perspective:

  • Ed: “Antitrust is the giant question mark right now… If antitrust was a concern when Paramount was going to buy Warner Brothers, it's going to be a huge concern now that Netflix is buying Warner Brothers.” (16:58)
  • The hosts cite past aggressive regulatory blocks (AT&T/Time Warner, Comcast/Fox, Penguin/Simon & Schuster). “Regulators have actually been pretty aggressive here and I think the populism will be on their side.” (20:04)
  • Netflix’s $5.8B breakup fee signals deal confidence.

• Impact on Paramount:

  • Paramount's stock dropped sharply (down 6% in a day, 12% in a week) as it’s left as a smaller, subscale competitor. (22:54)
  • Scott: “David Ellison isn't hanging his hat, he's hanging his gold-plated Big Wheel. I fucking hate rich kids, Ed.” (23:34) (Classic Scott rant)

• Historical Perspective & Netflix’s Rise:

  • Ed reads the once-dismissive 2010 quote from Time Warner CEO Jeff Bewkes: “Is the Albanian army going to take over the world? I don't think so.” (24:54)
  • Scott notes the irony and Netflix’s rise from DVD mailer to global powerhouse: “Netflix is arguably one of the great success stories, probably the success story or the biggest success story in media.” (27:20)

2. AI IPOs: Anthropic & OpenAI Enter the Race (31:08 – 48:45)

Market Landscape:

• Anthropic is reportedly planning an IPO as early as 2026, with OpenAI on a similar track—marking a new phase in the AI era, moving from euphoria to cautious optimism.
• Scott: "If I had to peg where we are relative to the dot com bubble, we'd be in 97 or 98. ... I feel like we're right now in crazy town..." (33:10)
• He’s bullish on Anthropic: “I will probably try and get in on the IPO if it actually happens, because I think the first big guys that get out... the stock to pop.” (34:24)

Anthropic vs OpenAI:

• Anthropic: Primarily B2B/enterprise focus, 80% of revenue from business clients; more “responsible” image.
• OpenAI: 75% consumer revenue; “drunk on spending,” forecasting enormous losses.
• Ed: “OpenAI is the company that is basically drunk on spending and Anthropic isn’t... they are on track to break even by 2028.” (36:39)
• Soundbite from Anthropic CEO Dario Amodei at DealBook Summit: “I think there are some players who are yoloing, who pull the risk dial too far.” (37:01)

Market Sentiment:

• Ed highlights the swing in investor sentiment: Over summer, more CapEx in AI drove stocks up; now, the same signals spook markets (Meta, Microsoft saw declines on CapEx announcements). “It's the story that people are telling themselves about AI and it's the vibes. It's how people feel about AI right now.” (41:16)

Predictions & Big Tech Winners:

• Scott’s 2026 pick: Amazon benefits most from AI through its robotics investments, citing Amazon’s million+ robots (versus 400,000 in the rest of US industry). “The real champagne and cocaine is going to be AI and robotics at the hands of the largest retailer in the world, Amazon.” (47:20)

3. Trump Accounts: A New Approach to Childhood Wealth (50:45 – 75:20)

Outline of Policy:

• The Trump Accounts initiative gives every child born 2025–2028 a $1,000 tax-advantaged account invested in index funds, locked until 18. Major donor: Michael Dell ($6B+).

Analysis:

• Both support the idea of long-term investing for children, but critique the short time horizon and donor dependency.
• Scott: “I like the idea, I don't like the execution... what we need is coequal branches of government that create things that are systemic and last beyond the 36 months he has left.” (52:56)
• Both would prefer a larger, permanent, congressionally-authorized policy (referencing Bill Ackman’s bigger proposal).
• Criticism of donor-motivation critiques: “At some point, folks, if you want to keep criticizing billionaires for giving money away, they will listen and they will stop giving money away.” (52:50)
• On branding: “Do not call them Trump accounts 100%.” (58:01, Ed) – The name politicizes and threatens policy longevity.

Broader Issues:

• U.S. under-invests in children; spending falls, outcomes worsening.
• Scott rails against U.S. priorities: “When you're spending more on deportation than you're spending on kids, it says that you've decided that our priority is deportation and not children.” (68:07)
• He calls for radical intergenerational reforms and more means-tested support: “It has nothing to do with your sexual orientation, your race, your gender. It's based on how much money mom and dad have. Full stop.” (70:59)

Memorable Rants & Quotes:

• On creative industry fallout: "They're about to turn Netflix and this deal into Darth Vader. And that will catch fire." (19:51)
• On time’s passing and finances: “Our species has a difficult time literally registering for 99% of our time so far on this planet, the average life expectancy has been 35 or less... Now, that's..." (62:20)
• On education inequality: “We are creating this, this out of control caste system. When we spend $150,000 on a poor kid's education and we spend a million dollars on my kid's education, well, what do you know...” (68:24)

4. Week Ahead & Final Market Prediction (75:20 – 76:54)

• Upcoming earnings: GameStop, Adobe, Broadcom, Oracle.
• Fed rate decision expected.
• Scott’s 2026 big tech stock pick: Amazon (“Amazon is about to show up with AI-enabled robots...”), reiterating his thesis on robotics’ impact (76:54).

Notable Quotes & Timestamps

• "I don't think the deal's going to close, Ed. I think it'll be blocked." – Scott Galloway (11:51)
• "Antitrust is the giant question mark right now." – Ed Elson (16:58)
• “I will probably try and get in on the [Anthropic] IPO if it actually happens, because I think the first big guys that get out... the stock to pop.” – Scott Galloway (34:24)
• “Do not call them Trump accounts 100%.” – Ed Elson (58:01)
• "We are creating this, this out of control caste system." – Scott Galloway (68:24)
• “The real champagne and cocaine is going to be AI and robotics at the hands of the largest retailer in the world, Amazon.” – Scott Galloway (47:20)

Recurring Tone & Dynamics

• Fast-paced, irreverent, and pointed; peppered with inside jokes, Scott’s signature profanity, and bracing asides on wealth, power, and the media.
• Scott repeatedly lampoons rich kids, industry insiders, and the cultural shift, while Ed tries to keep the conversation on track.

Section Timestamps

• Chitchat & Banter: 02:36 – 10:49
• Netflix–Warner Bros. Deal Analysis: 10:57 – 27:28
• AI IPOs, Market Narratives & Robotics: 31:08 – 48:45
• Trump Accounts/Child Investment Policy: 50:45 – 75:20
• Week Ahead & Stock Picks: 75:20 – 76:54

For First-Time Listeners

This episode provides a sharp, unfiltered look at the tectonic shifts in streaming and AI, and thought-provoking insights into policy and inequality—delivered with banter and brutal honesty.
Skip the ads (opening until 02:36, and at various mid-show jumps), and jump into the content at 02:36. The standout segments include the Netflix deal analysis, the compare-and-contrast of AI IPO prospects, and the debate on America’s priorities for children’s wellbeing.