← The Town with Matthew Belloni
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- [00:00]
A
This episode of the Town is presented by HBO Max presenting the HBO original series Task for your consideration. In the working class suburbs of Philadelphia, an FBI agent played by Mark Ruffalo heads a task force to put an end to a string of violent robberies led by an unsuspected family man played by Tom Pelfrey. Don't miss the series the Atlantic is calling riveting and revelatory. Now streaming on HBO Max, the world of Avatar will change forever this Friday. Discover why Fire and Ash is being hailed as bigger, better and more emotional than ever. And the best one yet, Fire and Ash in theaters, iMacs and 3D screens everywhere this Friday. Get tickets now. It is Thursday, December 18th. Quite a development in the saga of who will buy the Warner Bros. Discovery studio. The board of the company didn't just reject the hostile takeover bid from Paramount, they kind of eviscerated Paramount and the Ellison family in the process. The 83 page SEC filing offers the Warner's version of events that led to Netflix announcing its $83 billion acquisition of the studio and HBO Max on December 5th. Remember, Paramount is now pushing a hostile bid of more than $100 billion for the whole company, including the TV networks that are the subject of debate over how valuable they will be on their own. In the new filing, Warner's called Paramount's $30 per share offer inferior and inadequate. Paramount, the Ellisons quote, consistently misled them and repeatedly failed to incorporate critical feedback regarding its equity financing. The bid was portrayed as messy and filled with red flags. By contrast, they say the Netflix offer of more than $27 in cash and stock for just the studio and HBO Max, which Warner's ended up accepting, was a quote, clean bid without questions around who is ultimately accountable and without Middle east money. That's a key point. After all, the Ellisons are putting in only $12 billion of equity. I say only as if $12 billion is only but it's only $12 billion in equity in their bid. And they recruited funds in Saudi Arabia and Abu Dhabi and Qatar to put in additional money, about $24 billion, double the amount of the family, though the fund associated with Jared Kushner has since dropped out. But that is the Warner side of the story, as I said. And now here on the town, Paramount is responding. Jerry Cardinale, the founder of Redbird Capital and a longtime backer of David Ellison, Skydance and then Paramount and now the bid for Warners, he says that the whole Warner brothers missive is a big red herring. Larry Ellison is all in on this deal, he says, and despite the noise, its $30 per share offer is all cash, thus a better deal for shareholders. Ellison and his backers are still pushing for a shareholder vote. They had people at the White House this week pressing their case there, and they're confident that if this is all about money and the ability to close this deal, which they say it's supposed to be, they will win. So this has become a real standoff and increasingly nasty. Jerry's in the middle of it all, and he's got some choice words for Netflix and Warners. And of course, I asked him whether the Ellisons are prepared to increase their bid. So today it's the Warner Brothers rejection of the Paramount bid plan to fight back. And what's left for the Ellisons to do? From the ringer and puck, I'm Matt Bellamy, and this is the town. All right, we are here with Jerry Cardinale, who is the founder and managing partner of Redbird Capital Partners, and in the middle of this Paramount, Warner Brothers Netflix standoff. Welcome, Jerry.
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B
Good to be here, Matt.
- [03:31]
A
All right. I appreciate you coming on the show today because the Warner's filing yesterday was pretty scathing. I mean, I haven't seen a whole lot of these in my career. I'm sure you've seen meaner ones in yours. But they walked through their version of events here, and it was a portrait in their eyes of a bid that was messy, that had a lot of questions around it, specifically about how much Larry Ellison was willing to backstop this deal and put up his own funds to make sure that it happens. And there were miscommunications and lawyers firing off letters when other bankers involved didn't know they were doing it and said, we didn't support that. So just give me your sense overall of what they were doing here, and then we'll get into more of the specifics of some of the claims.
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B
Well, it's all a false narrative. It's all a bunch of red herrings.
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A
Okay, tell me why.
- [04:33]
B
Because at the end of the day, the fiduciary responsibility here is to deliver the highest value and certainty to Warner Brothers shareholders. So please tell me that $108 billion deal is not going to rise or fall based on this kind of lack of communication and based on these kind of clerical issues. I mean, when you step back and you look at what the crux of their argument is for, why they didn't entertain our sixth bid when we had five bids prior to that and a track record of addressing all of their concerns, and then Just all of a sudden accelerated and went exclusive with Netflix. And then in the cold light of day, you see the two off, the two proposals side by side. And it is clear that our proposal is superior. Our proposal is all cash at $30 a share for 100% of the company. And we have a cleaner regulatory path. There is zero extrapolation, zero conjecture that it needs to go on with our bid. You look at the Netflix proposal and be quite honest with you, you need 3D glasses to understand it. Just as a starting point, our offer, it's got $18 billion more in cash than their offer. Their offer is both stock and cash, as you know.
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A
And the value of the stub and the TV agreement, like we don't need to get into the disputed value of the TV networks. You guys say they're not valued very high. Netflix says they are valued high.
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B
Well, it's actually a really important point because not only do you have, you know, Netflix stock component for studio and streaming, where it's already lost, shed 120/something billion of market cap and it's below the low end of the collar, but you got this completely moving target on the SpinCo. And that is more of an issue than anyone has articulated. Not only is it a complete conjecture as to what it would trade for. Right. And what the value is, and it's remarkable to me, I should say that everybody talks about this. You guys in the press talk about it, the Wall street research talks about it, we talk about it. The only constituent in this entire equation who doesn't talk about the value of the SpinCo is the Warner side. Now why is that?
- [06:43]
A
Well, why is it? You tell me.
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B
Let's talk about it. The chairman of the board went on CNBC this morning and made a passing comment about $3 to $5 a share. Well, first of all, $5 was in a single research report a couple of months ago.
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A
The B of A. Yes. None of the others have gone that high.
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B
Right. And then that one research analyst revised it down to three bucks. The problem is when you look at the leverage that's put on the SpinCo.
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A
The debt being put onto the CNN TNT group that's being spun off, and.
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B
You have to extrapolate what that debt is. When you look at the total debt that is projected at the time of closing, and you look at the debt that they're putting on studio and streaming, you extrapolate that there's about $15 billion of debt put on SpinCo for that group of assets. $15 billion of debt is about four times leverage. Now what's interesting is you have an immediate comp out there right now in pre trading called Versant.
- [07:39]
A
Sure. The Comcast network's being spun off.
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B
Correct. And it's a better portfolio of assets because it's anchored by live news and live sports. And now that has 1.25 times leverage and it's trading at 4, 4 and a half times. So think about that.
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A
So you think that these networks are not worth what they say they are.
- [08:00]
B
The way they've capitalized it. I mean, look, the great thing about all of this stuff, math is math. I'm a math guy, okay? The EBITDA is the ebitda.
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A
Yeah. But the market sometimes does interesting things with the math.
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B
That's fine. But for you to get to $3 a share, our math gets us to a dollar a share. To get to $3 a share, you have to. This thing has to be traded six times.
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A
And that is such a key issue because the value of the various bids of the two bids are contingent on what the value of the leftover is. We get that.
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B
Well, it's actually worse than that, Matt. So get this. So let's say $15 billion of debt, it's four times leverage. So let's say you dial that down. Let's say you can't get the Spinco can't happen at that kind of leverage, which is what I would suspect. So let's say you just take it down to two and a half times leverage, which is still double what the Versant leverage is. So you take 5 billion off of it and that 5 billion has got to move over to studio and streaming. You know what happens then? What happens then is that the shareholder value in studio and streaming gets squeezed because the cash amount to the Warner Brothers shareholders for studio and streaming. The value that they put out there on that gets squeezed because the enterprise value stays the same. And so then you have a situation where as follows, by moving just illustratively, if you move, if you, if you move 5 billion of debt, take it from 15 to 10 from SpinCo and put it over to studio and streamings. Effectively what will happen is that Warner Brothers shareholders will trade $2 a share in cash from studio and streaming for $2 a share in Spinco stock. That is what is going to happen. And that is not a good trade for Warner Brothers shareholders for a declining asset that is massively over levered, especially when you've got the verse and comp out there. So no one talks about that. It's not just this Kabuki around. What is the SpinCo going to trade for? It's the impact on the studio and streaming value.
- [09:52]
A
Arguably, CNN is a premium asset that would have added value, but I don't want to get into that. I want you to specifically address some of these concerns that were raised by Warner, specifically the Larry Ellison aspect. Because over and over it seems like they were really pushing for a personal commitment from Larry Ellison to backstop this deal and it didn't happen. Why won't Larry Simply put up 40 billion of Oracle shares into escrow with his signature on it and guarantee this deal like Elon Musk guaranteed the Twitter deal?
- [10:28]
B
Okay, well, this is where everything gets popularized and it's, and it's once again a false narrative. Larry's assets are all in the trust that we put up to backstop this, okay? And that trust has $250 billion of value, including mostly Oracle stock. Okay? That's six times coverage on the $40 billion of equity that the Ellisons and Redbird have backstopped.
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A
But is he on the hook for that if this goes wrong? He's on the hook for that.
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B
This is the point, okay? The equity backstop. And this is an underwriting structure that is ubiquitous in finance guarantees. The financing is available at closing not only because it's backed by the $250 billion of assets in the trust. Right. And by the way, this trust has been a counterparty in other completed public company transactions including Twitter and Paramount. Right. Which by the way, on the Twitter deal that involved know, one of Warner Brothers advisors, Wachtel Lipton. Right. The equity commitment papers that we submitted to Warner Brothers were identical in all material respects to commitments that the advisors to Warner Brothers had agreed to in other large transactions such as Twitter and Electronic Arts. So the notion here that I personally, first of all, if Larry offered the personal guarantee, it wouldn't have the teeth and the backstop that the trust has because his assets are all in the trust. So they asked for a backstop with teeth, we gave it to them.
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A
I don't care about the clerical error. And that there was on the proxy, it was just Larry Ellison. Like, I get that that seems like a made up, sort of like semantic thing. Assuming it's the trust is the responsible thing though, why, if you say that Larry is fully prepared to go all in on this, why is the Ellison family only putting in $12 billion of equity and you've now recruited three Middle east funds to invest double that 24 billion?
- [12:23]
B
Why, it's funny to hear you say only 12 billion. I mean, you are getting the B in billion, are you?
- [12:30]
A
I get it. But this is $108 billion offer.
- [12:33]
B
I understand that, but the Ellisons will be the largest economic owner. Let me just step back for one second and I will get right into the answer to the question. This is an owner operated model. I've said before that this is the first time since Walt Disney that you've had a family own control of one of the majors. He's the largest economic owner in Paramount. He's the largest economic owner in the. In this pro forma deal, the Ellison family and Redbird have 100% governance control. And you know, I put that up right up against how much does Reid and Ted have ownership in Netflix?
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A
Not bad.
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B
Not exactly. And how much does David Zaslav have in one.
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A
I get it. I mean, we don't have to get into whether the Ellisons are good stewards of this company. That's a whole separate question. I want to talk specifically about the deal though, because that's where. That's what is at issue right now. Why did you recruit these three Middle east countries? They weren't disclosed in the first offer. Then they were in the December 1st offer. Why did you go and recruit these? My reporting suggests that you and AR Emanuel and David were out in the Middle east getting these investors on board. Why did you need them if the Ellisons have no problem covering this?
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B
Once again, it's a false narrative. When you go from $19. Where we started was $19 a share, cash in stock, based on addressing all the feedback from the board. They kept giving us hurdles to jump through. We got to $30 in cash for 100% of the company. When you go from 19 a share and cash in stock to 30, all cash, despite the fact that Ellison and Redbird are backstopping this thing, it is prudent to get partners.
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A
Right.
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B
This is the largest private equity financing deal in history. Right. Every other deal, nobody has any problems. When KKR and Blackstone and tpg, all club deals, run a deal.
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A
No, I get it. But you have to understand the Saudis are different. That is a regime that has a history of anti media activities. Them owning even a piece of the company that owns CNN is problematic to a lot of people and potentially hurts you in the regulatory process.
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B
Yeah, look, we're not trailblazers on that, okay? You know, the current administration has sort of blessed these, has encouraged investment from all, all three of these countries. You know, we're not, we're not trailblazing with Regards to Saudis.
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A
And you haven't made them any promises about any involvement in anything?
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B
Absolutely not. We don't need to do that. We will be the largest economic owner in the, in the overall business and we own 100% of the governance. Right. And so there's no involvement there. This notion of soft power is antiquated. The administration has asked these countries to invest in the U.S. they've given that. They've given the Saudis a special investment designation. Saudi Arabia is one of the biggest purchasers of U.S. goods, from Boeing to GE to AWS, J.P. morgan, Warner Brothers, core advisor and lender is the reference bank in Saudi Arabia. It's operated for decades in Saudi Arabia.
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A
Why the Middle east, people though? I know you have relationships there, but like, why there? Is that just where the money is now that if you want to do an entertainment company, you go there.
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B
These are the three most sophisticated sovereign wealth funds in the world. And when you get to a level of $108 billion, I look at it and even though, I'll say this to you, even though I don't outsource my investment committee to third parties, the fact that the three most sophisticated sovereign wealth funds in the world and the most sophisticated private equity firm in the world in Apollo, who's in the debt alongside B of A and Citi, have endorsed what they're there for. Two, They've endorsed two things. They've. Number one, they've endorsed our business plan, and number two, they've endorsed Ellison and Redbird executing that business plan because we own 100% of the governance.
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A
But you initially did not have them as giving up their voting rights. You initially had them as having voting rights and then you changed that once some objections were raised. Correct?
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B
Correct. And so once again, you just proved my point. We have shown very tangibly a track record of addressing the board's concerns. And that's why we're now at our sixth bid here.
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A
Yeah. Why six? Why not just come in with it all from the beginning? Why go incrementally up like this?
- [16:38]
B
Because they keep. It's like rope a dope. They keep giving us hurdles to jump through. And it seems to me, without ever an intention of actually getting there with us. And the thing that proves that we went from December 1, we addressed their issues, we offered the backstop, we went to December 4th and heard nothing.
- [16:54]
A
Crickets.
- [16:55]
B
Right? And you can't tell me on $108 billion deal with this, where the second richest guy in the world is backstopping this with us and is the largest economic owner of this. You can't tell me that. And when you look at these bids next to each other, you can't tell me that you're going to go immediately to exclusivity with Netflix when their offer needs, you know, is. Is a moving target.
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A
Well, they say that Paramount was told that it couldn't improve its offer.
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B
That's not true.
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A
After December 1st. That's not true. That's not true. You're saying.
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B
Well, their actions speak louder than their words. They came back to us after December 1st and said, you got to address these things. And there was the text exchange between the two Davids where he said, this isn't best and final. And then we didn't hear anything. But the important point here is that the board has a fiduciary responsibility to get the highest value and part of the highest value. You gotta risk adjust that. The whole regulatory thing is about risk adjusting the economic part of the proposal. Okay? And so when you look at that, you cannot say that 30 a share, all cash, for 100% of the company with a much cleaner regulatory profile, you cannot say that that is inferior to their.
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A
We can debate the regulatory issue. I agree with you that, that it is likely an easier sell to the government, the combination of two studios, rather than making the largest streamer even bigger with the fourth largest streamer. But you're selling in part, or at least by implication the Trump relationship. And Netflix has a Trump relationship too. And Trump has not picked a side on this one, at least not publicly.
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B
I don't think we're doing that.
- [18:29]
A
You don't think that you're implying that the Ellison's relationship with the Trumps is gonna help you in the regulatory process?
- [18:34]
B
You guys in the media say that, right? This is very. Let me tell you something. The discipline in this commentary around this deal is very, very simple. It's about delivering highest value and certainty to the Warner Brothers shareholders. That is it. Okay, now you. Now highest value uncertainty means you have the only thing. Our deal has no extrapolation in it. Zero. Okay? We're creating competition. The North Star on the whole investment thesis is on the streaming side. Okay, we're creating. Our deal creates a three horse race, okay, in streaming, yes, between Netflix, us pro forma with Warner Brothers and Disney.
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A
And whatever Amazon is doing. But we won't count them.
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B
That's true. But their deal at 420 million pro forma subscribers, 43% market share, that kills competition. It's over. And that is why, you know, I've Been doing this for 35 years. And anytime you look at the constituents in the value chain and anytime you see all of the constituents in the value chain, you know, raising their concerns unanimously. And I'm talking about talent, content creators, and the theatrical exhibitors, they're all going bonkers over the possibilities of this Netflix deal. That tells you that the starting point is a monopolist.
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A
Do you don't believe Ted when he says that they will continue to release Warner Brothers movies in theaters?
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B
I think he, I think he said he's doing it, you know, for, you know, two weeks on a limited basis because he'll check the box. That's not the.
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A
No, no, no, he didn't say that. He initially said that they would evolve the model to be more consumer friendly after time.
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B
And.
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A
And then he made a surprise appearance in Paris this week where he committed to honoring the windows that are currently in place on Warner's movies. Now, I think he did that in response to the backlash.
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B
Sure. And I can't believe you guys don't give him more grief about that than you do about this backlash.
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A
Oh, he gets plenty of grief. I think people think that the Hollywood people are over emphasizing the theatrical issue, that for the general public, the streaming issue is the bigger deal, but for the people in Hollywood that like to see their movies in theaters, it's a bigger issue.
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B
I think it is. I think this is a really, it's a very important part of Hollywood. And, you know, the good thing about David Ellison is that he comes. He is Hollywood. He is passionate about Hollywood. He is passionate about, you know, filmmaking. I mean, the guy got into Harvard and Stanford and turned it down to go to UCLA film school, USC film school rather. And so, you know, he really, he bleeds this. He loves it. And, you know, he sees this as, you know, incredibly fork in the road moment for Hollywood.
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A
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- [22:10]
A
Plus in this deal, just to bring it back to this topic, could the Ellisons reduce their equity in the company to zero? Could they farm it out to others? That was one of the concerns that Warner's highlighted, is that there was the ability of the Ellisons to essentially syndicate or get out of the equity of this company and that. And who knows who might have bought it?
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B
I mean, I don't even understand the question, why would they do that when he's already got such a large equity stake in Paramount? And saying what they're arguing, they could argue a meteor is going to hit the earth. It's completely absurd. And, well, they're trying.
- [22:45]
A
Listen, they've got deal guys that are poking holes in that offer.
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B
But here's the deal. Matt, listen to this. You know, Larry, you're talking about the Ellison family. And particularly a guy who is one of the greatest entrepreneurs in history. He has a track record of always delivering. So, you know, it's, It's. It's absurd to even, you know, disparage him with these kind of assertions.
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A
Okay, is it, though, like, we know he has the money, but we don't know he has the commitment? That I think, is what people are wondering.
- [23:14]
B
Hold on one second. Hold on. Six bids into it. You don't know he has the commitment?
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A
No, I know. And in all the text messages, he's involved. He's going to dinner with Zaslav. He's doing this stuff personally. But, you know, so was Elon. And Elon tried to get out of his deal, and the Twitter board had to hold him to it because he made a personal guarantee.
- [23:32]
B
Right. Elon didn't spend the number of years and the commitment and the money building up Twitter the way the Ellisons had built up Skydance. And then apparently, you got to remember something here. We didn't just show up. We're not deal jockeys just showing up. We've been at this for 15 years. And so it is completely a false narrative. And reputationally, this is very important that this get done the right way. And frankly, it's disrespectful to me. It's disrespectful to the Ellisons. Who do these people think they're talking about here? I spent 35 years doing everything the Right way. And the Ellisons are no different. I mean, and he's one of the greatest entrepreneurs and business builders in history. When he says he's going to do something, he does it. He's got the. And by the way, don't believe me. Look at his track record. He has never. He's done that trust. And he have been counterparties to tens of thousands of transactions, and he's never not delivered on any one of them, including the most relevant one, which was the Paramount deal. So all of a sudden, just, you know, there's going to be this aberration that, you know, he flakes out. That's impossible. Not happening. False narrative. And by the way, Matt, step back for a minute. If that is the crux of their argument. They have no argument. Okay. I think. I think what we should be talking about is a delivery of shareholder value and certainty to these shareholders. That's what's important. That's where the fiduciary responsibility and the Revlon duties reside. And I don't know why we're not. We should get back to that. As opposed to all this other stuff.
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A
Well, why do you think they're doing this? Do you think this was all preordained? Zaslav and Ted Sarandos had a handshake deal. They were talking about, you know, him having a role. Like, what is the reason that they, in your mind, are pushing this to Netflix?
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B
Look, I think you should ask them.
- [25:09]
A
I think we have asked them. They say they have the better deal.
- [25:13]
B
Right. Well, that's categorically false. Start with math. Math doesn't lie.
- [25:17]
A
Okay, No, I get it, but what is the personal dynamic here? Why do you guys believe. Why did you send that letter from Quinn Emanuel saying that this was a farce of a transaction?
- [25:29]
B
Because it looked like this process was not. That there was not a level playing field. Look, I think from a human nature perspective, our first three offers is what got the board to put the whole company up for sales.
- [25:41]
A
Yeah, you prompted all of this. They were annoyed. And that. They said, screw you guys. If you're going to knock us off our horse and make us do something we don't want to do, you're not going to get the asset. Is that the argument?
- [25:52]
B
Here's the problem with that. Yes. And here's the problem with that, okay? It's not their company. It's the shareholder's company. Okay? And we have things called Revlon duties and fiduciary responsibility. And so, you know, the color of our money is the same as everybody Else's. Last time I checked, cash is king. And you gotta respect that. Okay, so we're not winning a popularity. This is not about a popularity guide. We're not running for student council, okay? This is serious shit. This is about delivering superior value to these shareholders. They deserve it. That's what capitalism is about. And you gotta risk, adjust that in terms of the regulatory certainty or uncertainty, and categorically, categorically, our offer is superior to theirs. And if there was any questions around it and the crux of their argument about the backstop and everything else, you pick up the phone and you send an email or a text and you clarify it before going exclusive. Every single. All the feedback I get from Warner Brothers investors is, why didn't they do that? Why did they feel a need to go exclusive so quickly when you know your. Your offer is superior? It's all cash. There's no extrapolation needed. You don't need 3D glasses. There's no question about this. Stubborn. And it seems like your regulatory pathway is a hell of a lot better than two years of a proctology exam. You know, when you took number one and number four, put it together, and you end up with 420 million subscribers and you got every constituent. And if you don't believe us, look at every constituent in the value chain. The talent, the creative community.
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A
Well, there's concerns about you guys as well, but a lot of that has to do with the Trump stuff and cbs. But what are you guys going to do about this? Because I thought maybe today you would come back and say, oh, okay, you're upset about our bid. Couple dollars more. You didn't do that. You reiterated your $30 bid. Why not just raise it a few dollars and say to Netflix, okay, we're up to 32, 33. Are you guys in on this?
- [27:36]
B
You know, that would be a little odd given that we haven't gotten a response yet on our sixth offer. So why would I come in and up my seventh offer when I haven't gotten a response from myself? I'd like an answer so that the.
- [27:47]
A
Shareholders should weigh in.
- [27:48]
B
David and I would. The reason we went to the shareholders is because David and I would like an answer is to. We. We addressed everything you asked us to do, and we haven't gotten a response back. So before you know, any of that other stuff, tell me what's wrong now with this one. Zaslav was the one from the very beginning who, when the stock was in the teens, saying it has to be $30 a share and everybody laughed at that. You know, David Ellison has done more for Warner Brothers shareholders in three, and David Zaslav personally. And then David Zaslav is done in three years. Think about that.
- [28:18]
A
Oh, don't even get me started on Zaslav. You saw the golden parachutes and the comp stuff that came out today. It's insane. $600 million for running a company for three years that shouldn't have been a company in the first place.
- [28:29]
B
By the way, look at his. Look at the last options grants that he was given before we started this thing. I think they were struck at $16.76. That tells you what. That tells you what the company thinks about the trajectory here of this business. All right?
- [28:41]
A
It's insane.
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B
We've delivered more value at David Ellison Credit, delivered more value to these shareholders in three months. So the notion that we're going to come in. I don't think we need to raise our bid.
- [28:50]
A
Oh, you don't Ever. So you guys aren't going higher?
- [28:53]
B
I'm saying the following. Okay, $30 in cash for 100% of the company with our regulatory profile is superior to Netflix. Okay, now over to them. Respond to that offer. That's what this is about. Respond to that offer. Tell us. We've shown a track record of going through five bids, where they responded, and somehow on the sixth, where we actually hit what they asked us to hit, both in price and structure and everything else, they decided not to respond to it. Why? You owe your shareholders a response. I'm waiting for that.
- [29:22]
A
You should have taken Zaslav to a sporting event. Ted took him to ufc.
- [29:26]
B
Yeah, yeah, fair enough.
- [29:30]
A
Maybe the restaurant wasn't good enough. Where did Larry take Zaslav?
- [29:35]
B
Yeah, exactly. I don't know.
- [29:36]
A
All right, so what's the next steps here? What are you guys going to do?
- [29:40]
B
We're going to stay disciplined. We also have our own business to run, and we're going to continue to educate shareholders, and we're open for business.
- [29:50]
A
So you're going to go straight to the shareholders. Is that going to be like, via presentations, via YouTube videos? What are you going to do?
- [29:58]
B
I don't know. I don't know. I mean, it depends on. We've met with investors. They know how to reach us. They're in. They're engaged, they're. They're really, really.
- [30:07]
A
What's the next deadline? Like, when does this all have to happen by?
- [30:10]
B
January 8th is when the. The tender offer deadline is. And so, you know, we're going to work through to January 8th.
- [30:18]
A
Okay. And you think you're ultimately confident that this is going to work?
- [30:23]
B
Yeah.
- [30:24]
A
We ask guests these days who they think is going to get this and give us a percentage. You guys, Better than half, less than half. Not a lot of these hostile offers go through.
- [30:33]
B
Look, the way I'd answer it is, again, I'm a math guy. I'm not about popularity contests.
- [30:39]
A
You're very popular. I've heard people like you.
- [30:41]
B
Well, where we stand right now, we're the superior offer, and we're open for business. So let's go. Let's go.
- [30:48]
A
Okay.
- [30:49]
B
We've shown that we really want these assets. We believe that these assets, together with Paramount, are great for Hollywood. This is about Hollywood and the next generation and what we're going to deliver. And this is David Ellison's legacy. I respect him so much, and I'm backing him, and I'm betting my firm on it. And I believe in this so much. And we're going to. We're going to do this.
- [31:08]
A
Well, I'm sure the investor funds and some of the shareholders would love a trip to Lanai or somewhere like that over the holidays. Get them some pineapples.
- [31:16]
B
Right?
- [31:17]
A
All right. Thank you, Jerry. I appreciate you coming on the show and getting grilled by me.
- [31:21]
B
You bet, buddy. Good to talk to you.
- [31:24]
A
We are back with the call sheet. Craig, scale of 1 to 10, how would you rate the food and beverage offerings in the James Cameron personal screening room in Manhattan Beach?
- [31:38]
D
A6.
- [31:39]
A
I would go lower. It was fine. It was like a four or five. There was popcorn, freshly popped. Nice.
- [31:46]
D
It was good.
- [31:47]
A
Yeah. The selection of candy, not great. There were some energy bars, like, I guess he's used to showing long movies there, but the overall experience, 10.
- [31:58]
D
Sure.
- [31:58]
A
Everything was ergonomically designed. Front row, like, nobody bothering us. It was great.
- [32:05]
D
Yeah. We should say that Jim recommended we sit in the very front row of their screening room because that's the way he likes to watch Avatar. So we sat in the very front.
- [32:14]
A
I sat in his seat. I sat where Jim Cameron sits when he watches his movie. So big plus movie coming out this weekend, finally tracking kind of weird. Like, the last one opened to 134us.
- [32:28]
D
So we should say. So the first one opened to 77. The second one opened to 134. And this one's tracking to, like 105. So kind of right in between 1 and 2.
- [32:37]
A
NRG has it at 105. I've seen higher. I've seen 1 15.
- [32:42]
D
Okay. I was going to take the over on 1 05.
- [32:44]
A
But it's lower than the last one, which I guess makes sense. You know, the Last one had 13 years of anticipation. This one has three years. The reviews on this one are mixed. You know, people are agreeing with us that it's a ride. The visuals are amazing. But, you know, some are saying that it's a little bit repetitive of the last one, which is true. I didn't mind that. But real critics might have an issue with that. And, you know, it's just not as cool and new as it was when it came back after 13 years.
- [33:13]
D
I think the biggest thing that Avatar 3 has going against it is that it's been only three years since the second one. And a lot of people are going to be like, this looks the same. I saw it. I like it when I see it. It's 3 hours and 17 minutes. I probably don't need to do this. If it was 10 years after the second one, maybe it's a different story.
- [33:31]
A
Maybe. Still, I'm taking the over. Let's set the line at 110. I'm going to take the over. I just feel like there are more premium screens now. There's higher inflation on those ticket prices. I think people are going to show up. Curiosity factor, the new character. I just. I think people are going to show up.
- [33:48]
D
I agree with you.
- [33:49]
A
I.
- [33:49]
D
If it's 110, I will take the over. I also think that a lot of the, you know, the stuff that you're mentioning there were the reviews, the online criticism, that's all that doesn't matter and that real people don't care about. And I think all the normal people who get this movie to two and two and a half and almost $3 billion, I think they're going to go see it. And if the LA New York people don't think it's good and think it's a repetitive storyline, I don't really think that matters.
- [34:11]
A
No, it's a theme park ride, basically, and people go for that.
- [34:15]
D
And I think it's better than the second one. I think the visuals are incredible and it's. It's unmatched. Nope. There are still no movies that are similar that are comparable to this.
- [34:23]
A
I liked it a lot, but as I say, often our opinions don't matter. Do you think it gets to higher than 2 billion worldwide?
- [34:30]
D
Yeah, I do.
- [34:31]
A
The last one got to 2.3 billion. And I've seen some of the numbers being projected in China. Like China all of a sudden is back for Zootopia. China is back and all those people saw the trailer, so hopefully they'll show up.
- [34:45]
D
Yeah, the, the first one did 2, 200 in China. The second one, 240 in China. I think. I think because of China. I think this will definitely. I think this will get to 2 billion.
- [34:52]
A
You think so? Yeah, yeah. I mean there's really also not much competition for audiences in January and February. There's really nothing. I mean unless you count like the second 28 years later movie or Mercy, the Chris Pratt sits in a chair movie. Like there's not much until Wuthering Heights. Maybe we'll have an audience. But that's a different audience. Really nothing until March when Hoppers from Disney, the Pixar movie, that's an all audience movie project. Hail Mary, Ryan Gosling. Like those movies in March could challenge. But nothing's really getting in Avatar's way. And I think this could be one of those where we look up in February and it did get to 2 billion.
- [35:32]
D
I bet you want that.
- [35:33]
A
I do want that.
- [35:34]
D
You and Lucas are neck and neck.
- [35:35]
B
Right now in the box office draft.
- [35:37]
A
Well, it means that we're not going to have a winner of the box office draft when we do this next year's draft because Avatar is going to be a slow burn. We're going to need to have it play out. Wicked is not doing great and Zootopia is overperforming. So Those are Lucas's two big ones together. Those have got to get to 2 billion. I don't know if it's going to maybe Zootopia's basically got to get to 1.5.
- [36:02]
D
Well, we'll see.
- [36:03]
A
All right, that's the show for today. I want to thank my guest, Elizabeth Warren, producer Greg Horleback, editor Jesse Lopez and I want to thank you. We'll see you next time. And Doug, here we have the Limu Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug Limu.
- [36:31]
B
Is that guy with the binoculars watching us?
- [36:33]
A
Cut the camera. They see us.
- [36:34]
B
Only pay for what you need@libertymutual.com Liberty Liberty Liberty. Liberty Savings Ferry Unwritten by Liberty Mutual Insurance Company and affiliates excludes Massachusetts.
- [36:43]
E
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