Podcast Summary: The Town with Matthew Belloni

Episode: Paramount Isn’t Giving up Warner Bros. to Netflix Just Yet
Date: December 18, 2025
Host: Matthew Belloni (The Ringer)
Guest: Jerry Cardinale (Founder & Managing Partner, Redbird Capital Partners)

Overview

This episode dives into the high-stakes corporate drama over the future of Warner Bros. Discovery, examining the $100+ billion hostile takeover bid from Paramount (backed by the Ellison family and Redbird Capital) versus the $83 billion acquisition deal Warner has accepted from Netflix. Host Matthew Belloni welcomes Jerry Cardinale to defend the Paramount bid, following a scathing Warner Bros. SEC filing that dismissed their offer and criticized the process. The conversation spans deal structure, financing details, insider tensions, regulatory hurdles, and Hollywood’s anxieties about a Netflix-Warner merger.

Key Discussion Points & Detailed Breakdown

1. The Standoff: Paramount vs. Netflix for Warner Bros.

• Context: Warner Bros. Discovery board rejected Paramount’s $100B+ all-cash hostile offer, favoring Netflix’s slightly lower ($83B) but “cleaner” cash-and-stock bid.
• Warner’s Critique:
  • Paramount’s bid described as “inferior, inadequate, and messy.”
  • Warner argues there are uncertainties in the Paramount financing, especially regarding Ellison family’s commitment and Middle Eastern funding.
• Paramount’s Pushback:
  • Jerry Cardinale calls Warner’s rationale a “false narrative” and “red herring” ([04:27]).
  • Paramount claims its $30/share, all-cash offer is superior, provides more certainty, and has a less risky regulatory path.

“At the end of the day, the fiduciary responsibility here is to deliver the highest value and certainty to Warner Brothers shareholders...Our proposal is all cash at $30 a share for 100% of the company. And we have a cleaner regulatory path.”
— Jerry Cardinale ([04:33])

2. Deal Structure & Valuation Debates

• SpinCo and TV Networks Value:
  • Central to the debate is what Warner’s leftover TV networks (“SpinCo”) are worth.
  • Cardinale highlights Warner’s reluctance to discuss real value, questioning optimistic analyst estimates ([06:45]-[08:10]).
  • He argues Warner’s math is flawed, with excessive leverage (debt) making the networks worth less (“Our math gets us to a dollar a share...to get to $3, it has to be traded six times”).

“...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?”
— Jerry Cardinale ([06:45])

3. Source of Funds: The Ellisons & Middle East Investors

• Ellison Commitment:
  • Warner’s board questions why Larry Ellison isn’t personally guaranteeing the full amount, and why the Ellison family is only committing $12B out of $108B total ([09:51]-[12:32]).
  • Cardinale insists Ellison’s trust covers all commitments and that the family will be the largest owner with 100% governance control:

“That trust has $250 billion of value...That’s six times coverage...The Ellisons will be the largest economic owner.”
— Jerry Cardinale ([10:27], [12:32])

• Middle East Investors:
  • Paramount recruited Saudi, Abu Dhabi, and Qatar funds; this was not in the early bids.
  • Belloni pushes on why these funds are involved and raises regulatory and reputational concerns.
  • Cardinale defends their involvement as standard for mega-deals at this scale, denies any special promises, and emphasizes the sovereign funds are passive.

“This is the largest private equity financing deal in history. Right. Every other deal, nobody has any problems when KKR and Blackstone… all club deals, run a deal... We're not trailblazers with regards to Saudis. The current administration has blessed these.”
— Jerry Cardinale ([14:10], [14:34])

4. Process Critiques & Accusations of Procedural Bias

• Warner’s Alleged Conduct:
  • Cardinale contends Paramount responded to every objection and that Warner’s process has “never had an intention of actually getting there with us” ([16:37]).
  • He says repeated bid escalations (“sixth bid”) demonstrate Paramount’s willingness, but Warner went exclusive with Netflix prematurely ([16:53]).
  • Suggests the board’s “fiduciary responsibility” is being compromised by personality conflicts and a lack of shareholder focus.

“It’s not their company. It’s the shareholder’s company. ...Last time I checked, cash is king.”
— Jerry Cardinale ([25:52])

5. Regulatory and Industry Implications

• Regulatory Risk:
  • Paramount argues its bid poses less risk since it keeps more competition in streaming.
  • Netflix’s deal would result in “420 million pro forma subscribers, 43% market share—that kills competition” ([19:13]).
• Hollywood’s Concern:
  • Major anxieties among talent, creators, and exhibitors about Netflix controlling too much content — especially theatrical releases.
  • Cardinale highlights David Ellison’s “Hollywood bona fides” and passion for theaters, positioning him as pro-Hollywood compared to Netflix.

“Our deal creates a three horse race...Netflix, us pro forma with Warner Brothers, and Disney.”
— Jerry Cardinale ([19:11])

“The talent, the creative community..they’re all going bonkers over the possibilities of this Netflix deal. That tells you the starting point is a monopolist.”
— Jerry Cardinale ([19:45])

6. What Now? Strategy and Next Steps

• No Immediate Bid Increase:
  • Paramount is holding at $30/share — for now — seeking a shareholder vote ([27:36]-[29:22]).
  • Feels further increases are premature without Warner’s response. Wishes process would focus on value, not personalities.
• Shareholder Outreach:
  • Paramount plans to speak directly with investors ahead of the January 8 tender offer deadline ([30:09]).
• Confidence Level:
  • Cardinale is confident, saying “we’re the superior offer, and we’re open for business” ([30:41]).

Notable Quotes & Memorable Moments

• On Warner’s Motivation:

“Do you think this was all preordained? Zaslav and Ted Sarandos had a handshake deal...?”
— Matthew Belloni ([24:49])

• On Legacy & Passion:

“The good thing about David Ellison is that he comes. He is Hollywood...he bleeds this. He loves it. And...sees this as, you know, incredibly fork in the road moment for Hollywood.”
— Jerry Cardinale ([20:35])

• On Board Responsibility:

“This is not about a popularity guide. ...we’re not running for student council, ok? This is serious shit. This is about delivering superior value to these shareholders. They deserve it. That’s what capitalism is about.”
— Jerry Cardinale ([25:52])

Timestamps for Key Segments

• 03:30: Warner’s scathing rejection and Cardinale’s first response
• 07:00: Valuation debate over SpinCo and TV networks
• 09:51-12:32: Deep dive on Ellison family’s financial commitment and Middle Eastern investors
• 13:45-16:32: Bid process criticisms; how and why partners were added
• 18:00-19:45: Regulatory arguments; risk of a Netflix-Warner merger; impact on industry competition
• 20:35: Cardinale on David Ellison’s Hollywood roots
• 27:36-29:22: Why Paramount isn’t raising its offer (yet); call for shareholder intervention
• 30:09: Next steps & tender offer date: January 8

Final Takeaways

• The fate of Warner Bros. is in flux, with competing narratives and high drama.
• Paramount/Redbird’s offer is pitched as higher in cash, more certain, and preferable for competition.
• Warner prefers Netflix, citing bid cleanliness and concern over financing/external investors.
• Personality, perceived process bias, and strategic vision for Hollywood’s future all loom large behind the numbers.
• With a January 8th deadline and no signs of compromise, the battle is likely to escalate — possibly directly to shareholders.

This episode is essential listening for anyone interested in Hollywood’s deal-making, the streaming arms race, and the boardroom politics steering the future of media giants.