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Paramount’s Updated Bid for Warner Bros. 12/22/25
00:48:05
In the latest chapter of the war for Warner Brothers Discovery, Paramount Skydance has amended its offering to outbid Netflix for the legacy assets. Gerry Cardinale, founder of one of Paramount’s key investors and strategic partners RedBird Capital Partners, addresses the WBD board’s concerns about the updated offer. Health and Human Services Secretary Robert F. Kennedy Jr. is reportedly exploring a U.S. vaccine schedule closer to Denmark’s. Former FDA Commissioner Dr. Scott Gottlieb discusses the potential changes to the American health care system, including recommended shots and drug prices. Plus, the U.S. Coast Guard is pursuing another ship off the coast of Venezuela, NEC Director Kevin Hassett has weighed in on the Supreme Court’s ruling on tariffs, and investor Bill Ackman suggested that Elon Musk take SpaceX public with a specific vehicle. Gerry Cardinale - 20:25 Dr. Scott Gottlieb - 40:33 In this episode: Joe Kernen, @JoeSquawk Andrew Ross Sorkin, @andrewrsorkin Cameron...
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- [00:00]
Jerry Cardinal
Introducing Fidelity Trader Plus. With customizable tools and charts you can access across all your devices. Try our most powerful trading platform yet@fidelity.com TraderPlus investing involves risk, including risk of loss. Fidelity Brokerage Services, llc.
- [00:13]
FedEx Commercial Announcer
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- [00:46]
Jerry Cardinal
Bring in show music, please.
- [00:50]
Cameron Costa
This is Squawkpod and I'm CNBC producer Cameron Costa. On today's episode, sixth time is the term. Paramount Skydance has amended its latest offer for Warner Brothers discovery. Key investor and strategic partner Jerry Cardinal of Redbird. Just minutes after the news broke, the.
- [01:11]
Jerry Cardinal
Big concern was that Larry Ellison and his family is not money good for this transaction. And so we've come in and said that, okay, Larry will give a personal guarantee on the equity financing for this transaction, $41 billion.
- [01:26]
Cameron Costa
Then changes afoot in the US health care system. Former FDA commissioner Dr. Scott Gottlieb on vaccine schedules and on drug pricing in 2026.
- [01:37]
Dr. Scott Gottlieb
Going forward, you're gonna see prices in the US on new launches probably come down, prices ex US go up.
- [01:44]
Cameron Costa
Plus, the US pursuing another oil tanker off the coast of Venezuela. And President Trump's top economic adviser, Kevin Hassett weighing in on the Supreme Court's tariff ruling.
- [01:56]
Andrew Ross Sorkin
There are other mechanisms with which the White House has the ability to implement tariffs. They can. What we're talking about is how these were implemented.
- [02:03]
Cameron Costa
This Time It's Monday, December 22, 2025. It almost is like, oh, Squawk pod begins right now.
- [02:14]
Jerry Cardinal
Stand by, Joe. In three, two, one.
- [02:17]
Andrew Ross Sorkin
His mic.
- [02:17]
Joe Kernen
Q. Oh, I like that, that new CNBC logo. I guess I missed that last week. Good morning and welcome to Squawk Box here on cnbc. I'm Joe Kernan said in the prompter I was Andrew Rossork. And I quickly picked up on that. I know that I am not because I don't have a jacket on. Becky is off today. U.S. officials tell NBC News the Coast Guard is pursuing a sanctioned ship in international waters off the coast of Venezuela. If it's caught, it'll be the third vessel that the US has intercepted in the Caribbean. On Saturday, an operation stopped the ship that the White House said was carrying sanctioned oil. And last week, President Trump ordered a blockade of sanctioned Oil tankers entering and leaving Venezuela. The US Seized a ship called the Skipper earlier this month off the coast of Venezuela. And I'm back, Andrew. I was going to. My lead in being back here. Let's see, I was gone for, I think, eight or nine days. Four of those days I was driving, and a couple of times it was more than 10 hours per day because I went down south. So my lead to you is that gas is $2.50 a gallon everywhere I filled going down south. So I think South Carolina averaging $2.50 or so. But that was notable to me. I don't know what happens as far as affordability goes, but gasoline is cheap right now. If you are traveling, it's a lot cheaper to be able to travel. And you can still get some. You can still get some great food in a lot of the gasoline stations because you go into a flying Jays or a pilot or. I don't know if you've done that recently. You travel a little, don't you? You got to look for charging stations, though, which is a pain in the ass trying to find those things.
- [04:15]
Andrew Ross Sorkin
I do not have to look for charging stations now. You have to look for McDonald's. I have to look for McDonald's. That's.
- [04:21]
Joe Kernen
Did you really? Because we.
- [04:23]
Andrew Ross Sorkin
We do.
- [04:23]
Joe Kernen
That's not hard to find if you're in the right, is it? It is unbelievable how many Mickey D's.
- [04:30]
Andrew Ross Sorkin
There are around the French fries. The French tries to win every time.
- [04:36]
Joe Kernen
And if you can't find a McDonald's easily, suddenly you see in the distance those golden arches and it almost is like if you. If you've been looking for one, right? And then it appears and there they are. What a great. What a great logo. Well, how are you? Welcome. Have you been. Have you been getting along okay? I haven't. I haven't watched that.
- [05:00]
Andrew Ross Sorkin
I like Joe.
- [05:02]
Joe Kernen
When do we get.
- [05:02]
Andrew Ross Sorkin
When we miss a new. We got a new logo. You can see we got the logos everywhere. We got one behind me right now. I mean, they're everywhere. We got the new logo last Monday. And I'm digging the new logo because I feel like it's. It's forward looking. It's sort of about where we're all going. The new version spinoff is happening also.
- [05:22]
Joe Kernen
Backward looking because it looks like very similar. It harkens back to before we had the. The peacock, you know, back in the. God, when was that? I guess back in the 90s. Back in the 90s it had a. I still have shirts, believe it or not, with Some of those logos on it, but so it's forward looking and backward looking. It's nice.
- [05:46]
Andrew Ross Sorkin
Well, you've got. I'm looking only forward. I'm only looking forward is my hope always.
- [05:54]
Joe Kernen
But you can't look forward. You can't. You got to remember the past to approach the future in a good way, I think.
- [06:02]
Andrew Ross Sorkin
As long as we're not relitigating the past, but. Yes.
- [06:05]
Joe Kernen
What are we going to do on this show then? Whenever you bring up. What if you bring up states, you know, statism or, you know, I'm going to bring up everything Biden did and you're going to bring up everything that Trump's doing. I've seen you doing it on every network available to mankind.
- [06:24]
Jerry Cardinal
Right.
- [06:27]
Joe Kernen
We're like China. Didn't you say we're like China now or something? What did you say? We're like. They've never seen anything like this. Or like China.
- [06:33]
Andrew Ross Sorkin
Oh, because you're. Oh, you're following me now on Twitter, which I like.
- [06:38]
Joe Kernen
No, no, no, no.
- [06:39]
Andrew Ross Sorkin
I made a comment last. Somebody else. I'm sure somebody else forwarded to you. Yes, I know. You can't bring yourself to watch what I say on Twitter. No, the comment I had made was just about how we have moved into some kind of form of like, almost like a state, a state sponsored.
- [06:59]
Joe Kernen
I had a lot of thoughts on. A lot of thoughts on that.
- [07:03]
Andrew Ross Sorkin
We can talk about it.
- [07:04]
Joe Kernen
Democrats normally love socialism, except when it's seen to be coming from a Republican. And Republicans hate socialism. Unless the Republican president is. So the hypocrisy is still there. The only thing I would say is that looking at the way the Biden administration handled the statism with, you know, mandatory childcare, mandatory DEI hiring caps, a mandatory transition to energy. That's all. Those things are bad for companies. I think that Trump, and I'm not saying it's good that the government's so involved, but at least Trump is more of a partnership than to try to help capitalism instead of trying to get in the way every step of the way. That's. I like this brand of stateism more.
- [07:55]
Andrew Ross Sorkin
I know you do. I know you do. The only point that I was trying to make was maybe a broader point, which is that in China, for example, every. Every business decision to some degree is. It's not necessarily that it's funneled through President xi, but the CEOs of every company or are thinking about Xi and are thinking about sort of the regulatory framework and what the president wants and whether it will be approved of. Or not approved of or be looked upon favorably or not looked upon favorably or that they're all of those things. And that, that whatever that is, that sort of in the head that every major business leader is thinking about and they do that now of, of this President in this White House.
- [08:39]
Dr. Scott Gottlieb
Right.
- [08:40]
Andrew Ross Sorkin
That, that is, that is different I don't think under previous presidents and now I'm even thinking of Democrats.
- [08:49]
Andy Richter
Right.
- [08:50]
Andrew Ross Sorkin
Because they were, that they thought so much about what the President wanted in any given moment because it was, the.
- [08:58]
Joe Kernen
President was putting up obstacles to do, to growth for corporate. Maybe if we do it that way, maybe if we do it that way we can get to 5 or 6% GDP like China has done. So typically, in fact, that's what we're going to get next year. I don't know whether you saw that, but that's what, that's what the President's press secretary.
- [09:17]
Andrew Ross Sorkin
It's actually slightly different. I think that the rationale for that is more out of fear, which I think is different than before. Which is to say I think a lot of what took place with the law firms earlier in the year and the universities and the, you know, ABC and Disney and all the different sort of corporate, the intel. I think all of that is what makes business leaders today think about sort of being in the favor or out of the favor of the President the way that they didn't before. And I don't think they thought about that in the context of previous presidents at this.
- [09:51]
Joe Kernen
God, try to get it, try to get a permit for, for a pipeline if you don't think people were fearful of things.
- [09:59]
Andrew Ross Sorkin
Sure, fear was always wanting to get approved, but I think not in the same way. I think it's a, it's a, it's a different, philosophically it's different. There's a, it's not. Yes, people always wanted to get a permit to get, you know, a pipeline.
- [10:15]
Joe Kernen
But it's well intentioned. Like if you're not going to build things here and try and help, you know, make America great again, then you need to be fearful. It's a different way. Instead of actually putting up impediments to corporations because they're greedy profit mongers that get taxed. It's a whole different rationale. I think A whole different rationale. And I like this, as I said, I like this much better.
- [10:39]
Andrew Ross Sorkin
I know you like this better. I know and maybe it will, but.
- [10:42]
Joe Kernen
It'S not perfect because I don't like, I don't like trying to prop up losing companies. But at least we got, I'd rather have a stake in it than just give it to them. If they have childcare and hire union workers, I mean, that's, that's even. And you don't think that the social media companies were afraid of the Biden administration if they were to print something about the laptop? You don't think they were afraid of companies? They were going to say something about, about the vaccines or the lab origins?
- [11:06]
Andrew Ross Sorkin
They were petrified, yes, but I think in a different way, in a bad.
- [11:11]
Joe Kernen
Way instead of a good way, we're.
- [11:14]
Andrew Ross Sorkin
Going to agree to disagree. President Trump's top economic adviser saying he doesn't think the Supreme Court is going to call for widespread refunds even if justices rule against the president's tariff regime. To speaking on CBS's Face the Nation, National Economic Council Director Kevin Hassett saying that refunding tariffs would create an administrative problem. The people who pay the tariff, if there is a refund, the people who actually paid for the good, the importer, in most cases, they're the ones who'd be the first line of defense for refunding the tariff. But I really, really don't think that's going to happen. It'd be very complicated and then that person would be responsible for allocating the tariff refund to the appropriate folks. Now, the Supreme Court could rule on the president's tariffs as soon as next month. There had been an expectation, Joe, that we might have even gotten a decision. Some people were talking about last week, some people talked about this week. I think at this point, the sense is it's off the table pre Christmas, but perhaps we'll hear something in early January.
- [12:14]
Joe Kernen
So many things along those lines, Andrew, that I saw. And is the deficit really down 600 billion? That, that's, that's interesting to watch. I don't know. What are they massaging the Supreme Court, when that came out, initially it looked like the Supreme Court was skeptical of the tariffs. But then again, there were some questions that were like, if you can put a trade embargo on a country, you can't put a 10% tariff on a country. There were questions about that as well, which was interesting. Something else I was thinking about that happened, I don't know.
- [12:51]
Andrew Ross Sorkin
We live in a, on the tariff front. I think the question is, I think it's possible the Supreme Court can strike down parts of this on the View that you can't do it just across the board. I mean, I think that's going to be, that's part of the issue. But maybe you do it Prospectively, meaning prospectively so that you're not getting into the refund issue is a real issue. That, that would re scramble the economy. It would create all sorts of new uncertainty. So maybe if you were to, if, if you decided for whatever reason that, that you didn't think the President had the full rights to do what he did in the way that he did it. And that's the issue. It's not. You're right. There are other. And the President's talked about it and the Treasury Secretary's talked about it. There are other mechanisms with which the White House has the ability to implement tariffs. They can. What we're talking about is how these were implemented. This time.
- [13:41]
Joe Kernen
Investor Bill Ackman, one in the center, not me, wants to help Elon Musk or suggesting maybe that he could help SpaceX take SpaceX public. In weekend post on X, Ackman suggested that Musk merge. Space X was a special type of acquisition company that Ackman's firm created. And under the plan Ackman said that Tesla shareholders could receive so called spars. Those are special purpose acquisition rights so that they could participate in Space X's IPO down the road. According to Ackman, this would reward loyal Tesla shareholders with the opportunity to invest in Space X or with cash for their spars while totally democratizing the IPO process. Reports have said that Space X is gearing up for a possible IPO next year. Ackman also floated the idea of certain investors in the transaction receiving rights to be able to participate in a future IPO of Musk AI company X AI Andrew.
- [14:46]
Andrew Ross Sorkin
What do you think of that, Joe?
- [14:48]
Joe Kernen
I'm not sure. Go for it. I'm not, I'm not. I mean just with what I read. Sounds good, I guess. Do you have a chance to participate if you're loyal? I don't know. We can't do it.
- [15:02]
Andrew Ross Sorkin
Really interesting to see what would happen. Yeah, yeah. I don't know. I don't know. I think there'd be a lot of people would be interested though.
- [15:10]
Cameron Costa
Next on Squawk Pod, the latest in the battle for Warner Brothers Disney discovery. Paramount has updated its offering for the legacy assets, attempting to outbid Netflix. Key investor and strategic partner Jerry Cardinal of Redbird Capital took to our airwaves to make his case.
- [15:29]
Andrew Ross Sorkin
When you get off the set, are you expecting to get a phone call from somebody from the board of Warner Brothers?
- [15:34]
Jerry Cardinal
It doesn't matter. We've gone directly to the shareholders. It would be great. But we've also gone directly to the shareholders. And thank God there's rule of law in this country.
- [15:42]
Cameron Costa
Cardinal warns there won't be a seventh bid unless the sixth one has been.
- [15:48]
Jerry Cardinal
Vetted like we've done through the six bids that we've made. We are being responsive to what their concerns are.
- [15:58]
Andy Richter
Hi there, it's Andy Richter and I'm here to tell you about my podcast, the three Questions with Andy Richter. Each week I invite friends, comedians, actors and musicians to to discuss these three where do you come from, where are you going, and what have you learned? New episodes are out every Tuesday with guests like Julie Bowe and Ted Danson, Tig Notaro, Will Arnett, Phoebe Bridgers and more. You can also tune in for my weekly Andy Richter Call in show episodes where me and a special guest invite callers to weigh in on topics like dating, disasters, bad teachers, and lots more. Listen to the three Questions with Andy Richter wherever you get your podcasts.
- [16:38]
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- [17:08]
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- [18:08]
Cameron Costa
This is Squawkpod Today with Joe Kernan and Andrew Ross Sorkin.
- [18:13]
Andrew Ross Sorkin
We do have some breaking news that we need to tell you about. Literally crossing the tape as we speak. Paramount skydance amending its $30 per share all cash offer for Warner Brothers Discovery in response to WBD's concerns about the bid. Paramount still offering to buy 100% of the outstanding shares of WBD and assume all of the assets and liabilities. The per share offer price is not changing. It does not appear to be. But Paramount says in response to a Warner Brothers filing and comments made by WBD's principals and advisors and in some television appearances, including right here on Squawk Box, that is now going to amend its offer in six different ways. And I want to walk you through what they're saying here because it's really quite interesting what they're, what they're, what they're going to do here. The first, Larry Ellison is now going to provide an irrevocable personal guarantee of $40.4 billion of the equity financing for the offer and, and any damages, any damage claims against Paramount. You may remember that was a big issue that the board of Warner Brothers has talked about saying it was in this revocable trust. So Ellison now saying he will not revoke the Ellison family trust or adversely transfer its assets during the transaction. The other pieces of this, Paramount now saying it's publishing records confirming that the Ellison family Trust owns approximately 1.16 billion shares of Oracle common stock and that all material liabilities of the Ellison family trust are publicly disclosed. That was also an important point because WBD's board had had some questions about how much money was actually in these trusts. Then Paramount now saying it's revised its agreement offers improved flexibility to WBD on debt refinancing transactions representing and an interim operating covenant. So that's another piece of this. And then Paramount also saying it plans to increase its regulatory reverse termination fee. So that fee now going to go from $5 billion to $5.8 billion. That effectively matches the fee that Netflix would pay if in fact the government or regulators were to block the deal. Lastly, the offer is now conditioned on WBD continuing to own 100% of of its global networks businesses. And that is important because it touches upon what's going to happen if in fact Warner would try to spin something out early. Jerry Cardinal is here. He is the founder and managing partner at Redbird Capital Partners, of course, a partner in Paramount. Skydance. Jerry, it's great to see you this morning and thank you for coming in to talk to us about these changes in the offer. As we mentioned, the price price tag not changing. But some important details are including perhaps most importantly the backing of Larry Ellison and him now making this a personal guarantee as opposed to a revocable trust. Tell us about your thinking about the various parameters and different things in this new amended offer.
- [21:27]
Jerry Cardinal
Well, look, you Make a really good point. We've been trying to get our offer vetted since we submitted it December 4th. And you know, this is a pretty simple thing. It's about shareholder value and it's about certainty. In fact, when we talk to Warner Brothers shareholders, they point out two things. One, why is this so hard? It seems pretty straightforward. And two, why would they go exclusive with Netflix so quickly when you see these two offers lined up next to each other? We still have not been able to. To talk about shareholder value here. We're talking about all these other things. And so what we've done in this amended filing is we've cleared the brush on all the obfuscation around the offer. And, you know, the big one that, that, you know, has been percolated, by the way. We only found this stuff out in their 14d9 filing this past week. And so like we've done through the six bids that we've made, we are being responded responsive to what their concerns are. The big concern was that Larry Ellison and his family is not money good for this transaction. And so we've come in and said that, okay, we will give you. Larry will give a personal guarantee on the equity financing for this transaction, $41 billion. You know what we did when they asked us between our fifth bid and our sixth bid? They asked us to backstop. And so the Ellison family and Redbird backstop adopt it. But they. And we did it through the Ellison family Trust. The Ellison family Trust, which has been around for close to 40 years and has been the counterparty in tens of thousands of transactions, including the Paramount Skydance deal. That is where all the assets resides. That's where. And it's got $250 billion of assets in there, anchored by 1.2 billion shares of Oracle. That's over six times coverage of the 40 billion in equity that we're backstopping. But that seems to be the sort of red herring that is out there and preventing our offer from getting vetted and taken seriously. So we took it off the table. It is now off the table. All right, the second thing is this.
- [23:30]
Andrew Ross Sorkin
Just, just before you go there, one question on that front. Had they not told you? You're. You're suggesting prior they had never, they had never raised this as an issue in terms of the revocable trust and the guarantees.
- [23:44]
Jerry Cardinal
We are still waiting to get a response on our December 4th offer. Full stop. We found out about these things in the 14D9 filing. And so that is why we went to shareholders. You know, the shareholders own this company. And so we went to them directly because it's clear when you look at our offer and you look at Netflix's offer, our offer, just to reset the table, $30 on all cash, 100% of the company and a clear path through regulatory. The Netflix offer is, you need 3D glasses to understand it. It's got Netflix stock which is blown through the bottom of the collar and it also has another currency, another stock that is to be issued that is the stock of the spin out company. And you know, and I think the chairman of the Warner board came on one of your shows last week, week saying that that is three to five dollars a share. I'm a math guy. All the people on our side are math guys. That's not three to five dollars a share, it's a dollar a share. When you look at what they've leveraged it with, $15 billion of leverage on TBS, TNT, CNN, and you know, the only independent variable there is what does it trade for? For it to trade at $3 a share, you'd have to assume a six times multiple. Right? We're assuming, we're giving them the benefit of the doubt and assuming the same multiple that your Versant is trading at, which is four and a half times. At four and a half times. The math is the math. The EBITDA does the ebitda. The leverage is the leverage. It's a dollar a share.
- [25:10]
Joe Kernen
Gary, our Versant needs should be trading at 6. I'm sorry, that, that's.
- [25:14]
Jerry Cardinal
Well I, you know, we can debate.
- [25:17]
Joe Kernen
Sorry. Yeah, sorry.
- [25:19]
Jerry Cardinal
Sorry to interrupt. That's right. But the thing on the stub that's really interesting is everybody, we can't even talk about these, have not been able to talk about these issues.
- [25:26]
Strawberry Me Coaching Announcer
Issues.
- [25:26]
Jerry Cardinal
Right. And so no one talks about on the Warner side, no one talks about the value of the stub. But here's the interesting thing. It doesn't stop at the value of the stub. If that is over levered, that's that spin out will not be able to happen. And if that is the case, then that $15 billion of debt is going to need to be reallocated over to studio and streaming. So just for the sake of argument, let's say, you know, version trades at 1.2 has 1.255 times leverage, trading at four and a half times.
- [25:54]
Andrew Ross Sorkin
Right.
- [25:55]
Jerry Cardinal
At $15 billion of debt. You know, this spin out is close to four times leverage. So let's say we take 5 billion of that debt out of the 15 and we move it over to Studio and streaming. That still reduces it only to two and a half times leverage. That's still double what, you know, version has, but never. Nevertheless, just illustratively, let's say we do that, what will end up happening is that that will squeeze the amount of cash that Warner Brothers shareholders get in studio and streaming, right? So what effectively will happen if you move 5 billion of debt over from the Spinco over to studio and streaming? Warner Brothers shareholders will be effectively exchanging $2 a share in cash for $2 a share in equity in the SpinCo, which is a declining asset. That's, that's not, that's debt on arrival. That is a disaster. And that unwinds this entire, entire deal. You don't have to do any of that extrapolation. You don't have to deal with two stocks, two currencies, one to be issued, let alone as before, we get to the regulatory risk, right? Our regulatory risk is straightforward. Our deal creates competition. The Netflix deal kills competition. Netflix buys HBO Max. It's 420 million streaming subscribers. The next number two is Disney Hulu at 184. That. No wonder the consumer constituents in the ecosystem, talent, content creators, theatrical exhibitors, are losing their minds on this because they see the pricing power that that will create and then hence they see what's coming, which is everybody in the value chain is going to get squeezed. So that is not good.
- [27:24]
Joe Kernen
For what is the rationale for Warner Brothers board and David Zaslav then why, why, why favor the Netflix deal? Just honestly, does David want a job? He wants to keep, keep. Teddy wants to run the studio. What is the reason?
- [27:38]
Jerry Cardinal
It's a great question and it's the question that I get from Warner Brothers shareholders. No one knows other than, look, when we, you got to remember our first three offers here is got the board to put the company up for sale. So I think we were always a little bit on our back foot because they were originally spinning the companies, breaking it up. And you know, we came in and our offers was for 100% of the company. And I think it just got them to put the company up for sale. So we were always a little bit on the back foot. But at the end of the day, Joe, you know, the shareholders own this company. The board doesn't own it. David Zaslav doesn't own this company. And this should be a lot. Warner Brothers shareholders are right. This should be a lot more simple than it is. It's very simple. It's shareholder value and it's certainty of.
- [28:20]
Joe Kernen
You said the regulatory path is clear. Is that because of the President's relationship with the Ellison's?
- [28:27]
Jerry Cardinal
No, absolutely not. Look, the. We have a great relationship on both sides of the aisle. The relationship I focus on and that David Ellison focuses on is our relationship with the rules. Okay? And the rules here are pro competition, pro consumer. We have, you know, if we, this deal, if we come together, Paramount plus and hbo Max, you will create a three horse race in streaming. The North Star on this entire investment is direct to consumer and streaming. And we will create a three horse race. Netflix, Netflix, our pro forma company, and Disney, that is great for the entire value chain.
- [28:58]
Joe Kernen
Can you figure out why Netflix wants it so badly in that it doesn't help with what the future competition for Netflix is?
- [29:05]
Jerry Cardinal
Look, I mean, you know, when I see the elements in the value chain that talent and content creators and the theatrical exhibitors, you know, all expressing these concerns, and yet some of them are afraid to raise their head above the parapet, you know, for fear of retribution. Distribution, that suggests monopolists to me. Right? And so, you know, guys who are in this position, monopolies, they want to, you know, kill competition. And look, I mean, that's, that's why we have these rules. That's why we have rule of law. That's why we're going direct to the shareholders. So I can't speak for any of that. What I, all I can speak to is the facts and the facts. It is absolutely clear at a minimum there needs to be a vetting of these two offers. There needs to be a discussion on value. There's never been a discussion, discussion on value. It's been about all this other stuff. What we did today in this announcement is we took all that other stuff off the table. Not only, and not only did we not, not. Not only did we address the backstop and the personal guarantee. There was an issue around the revocable trust. And so Larry has also agreed to not revoke the trust during the pendency of this transaction. He's confirmed what the assets are in the trust anchored by the 1.2 billion Oracle shares, as well as, you know, confirming no material liabilities. We've agreed that we will embrace further flexibility in terms of interim operations between signing and closing, including in discussions with their bondholders and their banks. And we've increased our regulatory reverse termination fee from 5 billion to 5.8 billion, which matches what Netflix's was because we have absolute conviction, our ability to get through regulatory, reverse regulatory.
- [30:38]
Andrew Ross Sorkin
Jerry, a couple, couple of questions. One, on the regulatory side, there is A question about, given the investor mix and a number of Middle Eastern firms will be backing this bid, whether CFIUS would ultimately look at it and whether that represents a hurdle. What is your analysis there?
- [30:54]
Jerry Cardinal
Our analysis is no, we're backstopping it, Ellis. The Ellison family and Redbird's backstopping. And so all of those guys could go away. And we're still moving forward with this transaction. We also are. The Ellison family in Redbird will be the largest economic owner of the pro forma business. That is the way it is now. And we control the governance. So when you look at all of that, this is very much the way we set up Paramount, Skydance. You know, the great thing about the Ellison family, this is the first time since Walt Disney that you've seen a family own control and. And be the largest economic owner of one of the majors in Hollywood. That is a great thing. That is back to the future. That's what we need to see more of that is full alignment with the shareholders. How much does David Zaslav and Reed Hastings and Ted Sarandos own of their respective companies?
- [31:47]
Andrew Ross Sorkin
Let me ask you a different question. Actually, you know what? We have some tape from DiPiaza who's on the board. Obviously runs. Ran. Ran this for. For Warner Brothers Discovery. Want to show you what he had to say last week and then maybe we come back. When Paramount showed up, it became an active process. What is said on your show, you had David Ellison here, what said there, what said in the Wall Street Journal are nice to hear. What's important is what's on the paper. And now I think given our release this morning, our investors can look and see. Why did we decide that we were not confident that one of the richest people in the world would be there at closing. And doing a deal is great. Closing a deal is better. So, Jerry, you heard what he said. This is obviously trying to answer those questions. My question to you is, without raising your bid at this point, are you trying to create a new conversation with the company? Do you think that this will create that conversation? Or is this really more for the shareholders, longer term for them to make their own decision? I imagine what you'd hope is that the board reevaluates this and obviously goes with your bid. But clearly if you look at where the shares are right now, there's still an expectation that you're going to come back with a higher offer.
- [33:11]
Jerry Cardinal
Yeah, look, we. I'm not going to put a seventh offer in when our sixth offer hasn't been vetted. And when you look at these two offers next to each other. This, our offer is superior both in terms of value and in terms of certainty of closing. So, you know, all we did today was we took all of this other stuff off the table that they've been throwing all these obstacles that have been thrown in our way so that we can finally get a proper vetting and hearing about our offer. No one to date, first of all, no one's told talked to us. Secondly, no one's talked about value. It's all this other stuff. So we took all this other stuff off the table. We didn't think we needed to. I think it's, you know, the way we structured this deal with equity commitment papers, with, you know, a guarantee from the trust that holds all of the family's assets. That's standard stuff. I mean, that, that wouldn't, this is, this would never happen in any other deal. For some reason, it's happened here. So we've addressed all their concerns. We've done it through six offers. We have a great track record through this whole process. We started, we started at $19 a share with cash and stock. We've ended at $30 a share, 100% cash for and for the entire company. So we've shown that we will consistently respond to any concerns and issues all throughout the process. For some reason, they short circuited it after the fifth offer and didn't respond to our sixth offer. So we went to the shareholders. So at this point, you know, I think the question still is on the table. Show us where our offer. Offer at $30 a share, 100% cash, with our regulatory profile. Show us where that is inferior to what the other proposal on the table. The reality is it's superior.
- [34:42]
Andrew Ross Sorkin
So when you get off the set, are you expecting to get a phone call from somebody from the board of Warner Brothers?
- [34:48]
Jerry Cardinal
It doesn't matter. We've gone directly to the shareholders. It would be great. But we've also gone directly to the shareholders and thank God there's rule of law in this country.
- [34:56]
Joe Kernen
Jerry, do you, do you think that. Andrew, I got to get to my Bari Weiss, 60 Minutes. They canceled.
- [35:00]
Andrew Ross Sorkin
I got to get to Barry Weiss, too. We got to talk about that.
- [35:03]
Joe Kernen
They canceled this. You know, I saw that El Salvador prison on the world's toughest prisons. I didn't need to see the new piece on it. I've seen it. I don't think it's Trump's prison. But don't you think there's a perception, I mean, the people at cnn, for them to Prefer a Netflix deal. Tells you how scared they are of the new, I don't know, marching orders supposedly coming.
- [35:26]
Jerry Cardinal
Well, that's not what I've heard. What I've heard is people at CNN are worried about having $15 billion of debt dragging them down. Yeah.
- [35:33]
Joe Kernen
When The President says CNN's got to go either way, what do you make?
- [35:36]
Jerry Cardinal
Look, I mean, that's. That's noise. Honestly, Joe, at this point, I'm still. We're still trying to get to first base on this deal. Right. And this is about shareholder value. It really is.
- [35:45]
Joe Kernen
I can remember trying to do that, too, back in. Andrew, what did you want to ask about Barry Wyeth?
- [35:51]
Andrew Ross Sorkin
Well, I was just. I think we should just ask Jerry straight up, actually, about this because it's obviously, it's the other big news story of the morning, which is 60 minutes pulling back on this story about the prison in El Salvador and the correspondent who pursued that story saying that the piece had been vetted multiple times and then was killed at the last minute. She says, in my view, pulling it now after every rigorous internal check has been met is not an editorial. Editorial decision. It is a political one. So the question for Jerry is, to the extent he knows, was there any communication between either David Ellison or anybody in the management of the company that's thinking about this transaction, which of course will be in front of the president and Barry Weiss or anybody inside of 60 Minutes?
- [36:36]
Jerry Cardinal
Listen, you know, Andrew, I'd say this absolutely with conviction and, you know, I don't know about this situation, but I'll tell you this, no one is going to question Barry Weiss on being a fighter for independent journalism. Right. And so her track record speaks for itself. David Ellison's track record speaks for itself. So, absolutely, there's no way. And I know this makes a lot of headlines and, you know, everybody likes to conjecture. The one thing I know, and I know both of them extremely well, is that, you know, nobody's going to fight for journalism more than Barry Weiss and David Ellison.
- [37:07]
Joe Kernen
Not Trump's prison, Andrew.
- [37:11]
Dr. Scott Gottlieb
His prison.
- [37:12]
Joe Kernen
You can't blame him for the prison conditions, although you'd like to in El Salvador, can you?
- [37:17]
Andrew Ross Sorkin
No, I'm not. The rationale of the peace.
- [37:21]
Joe Kernen
I've seen that prison.
- [37:22]
Andrew Ross Sorkin
I've seen it on some president was sending. Was sending people, obviously, who were hopefully illegal. Illegal immigrants to this prison.
- [37:30]
Joe Kernen
Exactly.
- [37:31]
Andrew Ross Sorkin
To this prison. And that's why the piece.
- [37:34]
Joe Kernen
That's why he got elected and won all sides, seven swing states, because he said he was going to do that.
- [37:41]
Andrew Ross Sorkin
This is a debate for another day. Jerry, we want to thank you for joining us this morning. It is fascinating. We hope that you'll come on back and follow your progress in terms of just the next steps though, where how do you think this plays out just as we're sort of thinking about the calendar?
- [37:56]
Jerry Cardinal
Well, we have a January 8th deadline for our tender. And so, you know, we're going to be working through the holidays and into the first week of January to communicate the merits of our offer to shareholders. And, you know, we would like to see the boards free to engage with us between now and then. And if they don't, then, you know, as I said, we'll go straight to shareholders and we'll see how we do on January 8th. And we can continue to extend the deadline until, you know, we get a full vetting amongst all the shareholders.
- [38:27]
Andrew Ross Sorkin
Okay, Jerry, want to wish you a Merry Christmas, Happy holidays. Sounds like your holidays may be a week working holiday, but we appreciate it. We appreciate you being with us especially right as this news was breaking this morning. Talk to you.
- [38:39]
Joe Kernen
Money Never Sleeps.
- [38:43]
Andy Richter
Will be next.
- [38:44]
Cameron Costa
Coming up on Squawk pod, Health and Human Services Secretary Robert F. Kennedy, Jr. Is reportedly looking toward the Danish model for vaccines here in the US that system recommends only 10 of the 17 shots currently on the American list. Former FDA commissioner Dr. Scott Gottlieb weighs in right after this.
- [39:04]
Dr. Scott Gottlieb
They have a much different healthcare system than us. They have paid sick leave. They have universal healthcare, but they also accept a higher rate of hospitalization and deaths, quite frankly.
- [39:17]
Andy Richter
Hi there, it's Andy Richter and I'm here to tell you about my podcast, the Three Questions with Andy Richter. Each week I invite friends, comedians, actors and musicians to to discuss these three where do you come from, where are you going, and what have you learned? New episodes are out every Tuesday with guests like Julie Bowen, Ted Danson, Tig Notaro, Will Arnett, Phoebe Bridgers and more. You can also tune in for my weekly Andy Richter Call in show episodes where me and a special guest invite callers to weigh in on topics like dating, disasters, bad teachers and lots more. Listen to the three Questions with Andy Richter wherever you get your podcasts.
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- [41:00]
Cameron Costa
You'Re listening to Squawk Pod.
- [41:03]
Joe Kernen
You're watching Squawk Box on CNBC. I'm Joe Kernan along with Andrew Ross Sorkin. Becky is off today. Health and Human Services Secretary Robert F. Kennedy, Jr. Said to be pushing for a change to childhood vaccinations. Secretary Kennedy is looking at the Danish system, which recommends only 10 of the 17 shots on the US list. Joining us now, former FDA commissioner Dr. Scott Gottlieb. He serves on the boards of illumina, Pfizer and UnitedHealth. He is also a CNBC contributor. Good morning, Dr. Gottlieb. Good to have you on.
- [41:38]
Dr. Scott Gottlieb
Good morning.
- [41:40]
Joe Kernen
What's the what do you think of this?
- [41:45]
Dr. Scott Gottlieb
I would.
- [41:48]
Joe Kernen
You know, when you talk about stimulating the immune system, there are obviously great benefits to be able to do that in terms of these herd diseases that we basically have eradicated. Then again, I can see how in a perfect world, if they were gone, I'd rather not I'd rather not be introducing antigens, foreign things into my body or my kid's body if I didn't have to. Does this make sense the way Denmark does it?
- [42:19]
Dr. Scott Gottlieb
Well, they make a decision to accept preventable hospitalizations in the pediatric population. They have a much different healthcare system than us. They have paid sick leave. They have universal health care. But they also accept a higher rate of hospitalization and deaths, quite frankly, on a per capita basis. They don't vaccinate for flu, hepatitis B, hepatitis A, rotavirus varicellis or chickenpox meningococcal disease, which is a devastating disease, rare but devastating, RSV prevention in children and adults. And just to put that in perspective, RSV alone before vaccination accounted for 60,000 to 80,000 pediatric hospitalizations in the United States under the age of five, about 100 to 300 deaths annually. It was fully 10% of all hospitalizations. Infant hospitalizations were accounted for by RSV. That's dropped 70 to 85% as a result of the introduction not of a vaccine, but an antibody drug that's used as prophylaxis and also a Maternal vaccine. So a drug called Bay Fortis by Snofi. I'll give you another example. With varicella, chickenpox. We all remember getting it. There were 100 to 200 deaths a year from Varicella and about 11,000 hospitalizations. So these aren't benign diseases. And they put a big burden on the health care system and families and cause a lot of morbidity. They accept that in Denmark, they also have different patterns of spread among these diseases. Historically, we have not accepted that. If we go to the Danish model and we end vaccination or substantially reduce vaccination for these diseases, we're going to see them resurge and we're going to have to build new pediatric hospitals.
- [43:53]
Joe Kernen
So what's the scientific rationale for doing it then? Or there isn't one?
- [43:58]
Dr. Scott Gottlieb
Well, look, they put forward arguments about purported causal relationships between vaccines and autism and other things. I mean, the argument is constantly shifting. Before, it was supposed to be the preservative thimerosal that was in vaccines that caused autism. Once we reformulated the vaccines at fda, and I was there when we did it to take that preservative out, the argument shifted to the adjuvants in the vaccine. They also say that children get too many vaccines. But if you look at historically, in 1985, children were vaccinated for seven diseases and received about 3,000 antigens. Today, they're vaccinated for 15 diseases and receive about 180 antigens. To get back to your initial point, and so you're getting protection from more diseases with fewer exposure to antigens. I think this is really about, quite frankly, liability. If they move away from recommending these vaccines and move them to a different configuration on the CDC schedule called shared clinical decision making, there's a question of whether or not they will still have liability protection under the vaccine injury compensation program. So whether people will be able to seek compensation through the VICP or they'll have to sue manufacturers directly. And a lot of, you know, Secretary Kennedy's trial lawyer colleagues want to be able to sue the manufacturers directly and not have to guide parents through the vaccine injury compensation program. And in fact, they were on Twitter this weekend saying that they were talking about a number of the people close to Kennedy on the outside who work in the trial lawyer community were talking about the fact that if these get moved off the recommended schedule, it will waive the liability shield that is currently in place that was put in place to entice manufacturers back into space. I will say this is an open question. There's arguments on both sides of this question whether or not these vaccines will still fall under the vicp, it's going to get litigated. They may have to go through rulemaking. So this is an open question and ultimately Congress could step in and legislate, although I'm doubtful that they would.
- [45:53]
Joe Kernen
Have studies been done on the adjuvants that you were talking about and whether that could actually be one of the reasons for the increasing rates of autism? Because it almost looks like this is that. And you know, the way the word science is thrown around lately, at least for me, there's plenty of science that I think is junk science. But just to have a feeling, wow, there's a lot of autism. Must be. Maybe it's the adjuvants. It's obviously not the thimerosal, maybe it's Tylenol. It just seems sort of scattershot and it almost seems like not science based and it doesn't seem like the way you want to run a health care system.
- [46:40]
Dr. Scott Gottlieb
Yeah, look, I think the rising rates of autism, we know some of it's related to diagnosis. It's probably demographic factors at play, you know, older birth cohorts, people having children at older age.
- [46:52]
Joe Kernen
We know that there's. Scott, just thinking it might be because it coincides with the advent of a lot of vaccine usage, just using a coincident indicator without having the double blinded studies that take into account all the variables doesn't seem like the way you should be setting policy in the country.
- [47:12]
Dr. Scott Gottlieb
Well, look, I agree with you, Joe. And there's studies that why don't more.
- [47:16]
Joe Kernen
People say it then when they're afraid to say it?
- [47:19]
Dr. Scott Gottlieb
Well, a lot of people do say it. I think that, you know, the people currently in control in the public health agencies don't say it, but there's beenthere's been a lot of good studies. This has been one of the most exhaustively studied questions probably in modern times. And there's about. There's four studies that people generally point to, two that were done by the cdc, two that were done by Denmark. Believe it or not, they do very good vaccine research there. Looking at the question of whether or not there's a causal relationship between increasing vaccination and rising incidences of autism. And these were long exhaustive studies, some of the largest studies done, and they didn't show a correlation between vaccination and rising incidences of autism. And the thing that a lot of the people who are opposed to vaccination and Secretary Kennedy points to is an adjuvant used in the vaccines called alum. We've talked about this. It's an aluminum salt, not elemental aluminum. It's an aluminum salt. It's been used since about 1930. It was introduced when, you know, the history of the Great Depression that Andrew Rodebat started. So it's been used in vaccines for a very long time. It's a safe adjuvant. It uses as, you know, as an immune booster so that you can get a better response from the antigens in the vaccine. If you took it out, you'd have to put more antigen into the vaccine, which you wouldn't want to do. But that's what people point to now. After thimerosal was removed from the vaccines, the argument of the anti vaxxers shifted to, well, it must be the alum.
- [48:43]
Joe Kernen
Then, Well, I don't know. Tylenol, that it just, it's kind of scary. Scott Talk about most favored drug pricing. I always worried that if we import price controls that it's going to hurt innovation. How did this all come to pass where it's like Emily Lutella, never mind. It's not going to hurt innovation if we import the prices that some of these other countries have negotiated down or I don't know, it's not even negotiated. They've capped prices.
- [49:15]
Dr. Scott Gottlieb
Yeah. So look, there's Aunder, the IRA they capped. They did. But there's a lot of different elements to what the president, President Trump has been doing with respect to drug pricing. The latest announcement that came out on Friday was that they are putting in place mandatory rebates for certain Medicare drugspart B and Part D drugs based on the pricesprice differentials between what the drugs are sold for in the US and in Europe. So if the price differential is significant, if it's sold a lot less expensively in Europe versus the US Companies will be obligated to pay a rebate back to those programs. But it looks like the impact of this is going to be relatively muted. It's only going to affect anywhere from 5% to 10% of overall Medicare spending on drugs. There was a good note out from Raymond James this morning. Chris Meekins, who worked with me in the first Trump administration, he was working at HHS at the time, did an analysis on this and it's probably going to have a limited impact. There's also a question of whether or not the companies have signed these MFN deals to basically cut a deal to offer mandatory rebates in the Medicaid program, whether they'll be subject to this new demonstration project that was announced on Friday. Many people think they won't. Genentech put out a press release suggesting that they think they won't be subject to this new announcement that was put out Friday. I will say, though, the most significant part of what the president announced, which I think hasn't been talked about, is that in these XENFN deals he's cutting with the companies, they're agreeing to launch their new drugs at a world price. So they're agreeing that any new drug that they launch, they'll launch it for basically the same price in Europe that they sell it for in the US and so going forward, you're going to see prices in the US on new launches probably come down, prices ex US go up. I think that's the most significant piece of all of these deals. It's the one piece that hasn't been talked about. And final point here, they're holding on to four more deals with four additional companies. That's the speculation in Washington right now for later this week when they make an announcement about the rollout of Trumprx. This is going to be a website where people can go online, buy drugs directly at a discount, drugs that companies offer to sell there. And so they're going to announce that and they're going to announce four additional MFN deals with additional companies. The president, I think, hinted that one of them was jj. That's the speculation right now among folks in Washington.
- [51:22]
Joe Kernen
All right, thank you, Dr. Gottlieb. I love it right in the intro, you know, every single time. Pfizer Boardman. Every single time. And yet I hear immediately no mention of the fisa. I don't know. People have excrement in their ears or they just don't want to hear that. We disclose that you're on the board of Pfizer. They just, it's part of their narrative.
- [51:43]
Dr. Scott Gottlieb
And we disclose it while we're talking as well, right?
- [51:46]
Joe Kernen
Yeah, disclose it while we're talking. But you're obviously conflicted and we're hiding that. And we never say anything about Pfizer. Can you say it one more time? Don't do it. I'm joking. Dr. Gottlieb, thank you. Good, good, good to have you on.
- [52:00]
Dr. Scott Gottlieb
Thanks a lot.
- [52:03]
Cameron Costa
That's the podcast for today. Thank you for tuning in. As always. Squawk Box is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Weekday mornings on CNBC starting at 6 Eastern and going all the way until 9 to get the best bits of that TV show right into your ears in a much shorter format. Follow Squawk Pod where wherever you're listening now. We'll meet you right back here tomorrow. Have a great day.
- [52:29]
Jerry Cardinal
We are clear.
- [52:31]
Andrew Ross Sorkin
Thanks guys.
- [52:40]
Jerry Cardinal
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