← The Town with Matthew Belloni
Loading summary
Transcript142 lines
- [00:00]
A
This episode is brought to you by AMC. You do not want to miss Rise of the 49ers, the limited series event found exclusively on AMC and AMC, plus executive produced by Tom Brady. The docu series charts the legendary rise of the San Francisco 49ers from underdogs to five time Super bowl champions in the 80s and 90s and how they became a cultural force amid the Bay Area's seismic transformation. It features interviews with hall of Fame icons Joe Montana, Jerry Rice and Ronnie Lott, as well as never before seen archival footage. Visit amcplus.com to start your free trial now. This episode of the Town is presented by the Walt Disney Animation Studios Zootopia 2 now nominated for the Academy Award for Best Animated Feature, the Hollywood reporter hails Zootopia 2 knocks it out of the park with its dazzling visuals, sophisticated humor and genuine emotion. For your consideration for Best Animated Feature, it is Tuesday, February 17th. A pretty seismic event happened last week in the talent representation business. Casey Wasserman, the owner of the Wasserman agency, announced he's putting the company up for sale. If you haven't been following the saga, the move came after a couple weeks of scandal thanks to the latest Jeffrey Epstein email dump. It was revealed there that Wasserman exchanged some sexually charged emails with Ghislaine Maxwell, the convicted Epstein accomplice. The messages were from back in 2003, well before Epstein or Maxwell were known to have preyed on young girls. But Wasserman was married at the time and he also went on the Epstein plane on a humanitarian trip with the Clinton foundation, and he had previously been the subject of a Daily Mail expose that called him a serial cheater, including with women at his own company. Wasserman is also the chair of the upcoming LA Olympics, but the board of LA20A, which includes a bunch of his longtime allies, they backed him with a statement saying they investigated his behavior and it didn't rise to the level of asking him to step down. But it did rise to the level of a number of Wasserman music clients leaving, including Chapel, Roan and a number of others putting quiet pressure on Casey to step away from Wasserman, which is one of the largest sports and music agencies in town. They rep everyone from Coldplay and Fish for touring to NFL stars, NBA golf, a couple Dodgers and a big brand business. They also own the Brillstein management firm, which has Brad Pitt and Emma Stone and Bill Maher among many, many others. Still, given all that, it was a little surprising to see Wasserman say he was going to sell the entire company, not just the music group that's now set off a feeding frenzy among potential buyers. That's what we're going to talk about today with Lukas Shaw from Bloomberg. We'll do a little update on the Warner sale too. But mostly today it's the Casey Wasserman implosion. And who's going to walk away with a billion dollar talent firm. From the Ringer and Puck, I'm Matt Bellany and this is the town. Okay. We are here with Lucas Shaw from Bloomberg. Welcome back, Lucas. It was nice to see you last Friday at AFI for one of our live shows.
- [03:03]
B
Happy Tuesday. Yeah. Tom Rothman came out.
- [03:05]
A
Oh, you're spoiling the guest.
- [03:07]
B
Sorry.
- [03:07]
A
I guess I put it on social media. Yes, Tom Rothman, the chairman of the Sony film studio is on the show later this week. We will post the episode. But he was great. Students were great. I had actually never been to afi, so it was a nice little, little event for us. We're doing two more schools, Chapman and usc and then maybe more after that. But we're not talking about that today. Today we are talking about the Casey Wasserman school scandal slash sale of the Wasserman Agency. We're gonna do this in three parts. First, why did this happen? Second, how might this sale play out? And third, why does this matter? Why is this company important in the grand scheme of entertainment? So first and foremost, why did this happen? These were 22 year old emails that he sent to Ghislaine Maxwell, who turned out to be an awful person, convicted accomplice to a convicted pedophile. Not current and not criminal. So why was he forced to sell his company?
- [04:09]
B
Any association with those emails right now is pretty toxic for anyone. And I think in the specific case of Casey, because to your point, there were, there has been no evidence of him actually having a direct relationship with Epstein. We had a compound effect. We're less than two years removed from a report that talked about him being a serial philanderer, having an affair.
- [04:32]
A
A Daily Mail report, let's be clear about that. It was Daily Mail.
- [04:35]
B
But I got to get this part out because this I think is key. Him having an affair with at least one of his employees.
- [04:42]
A
Yes. A subordinate at his company.
- [04:44]
B
His name is on the door. His grandfather's name is legendary. He is, has, has positioned himself over his career as sort of this face of la, this champion of Los Angeles. And I think one of the things that was so surprising about the report a couple of years ago and then this is like, I Think to most people he seemed like, you know, a good guy. Right. He had a marriage to the daughter of one of LA's most famous lawyers and just they were, they seemed sort of like a golden couple of Los Angeles. And it was one of those like, oh, you know, what's really happening behind the scenes is not the same as what you see in public. I have to say, and this is the part of your newspaper that bothered me a little bit is I feel like there's been this reckoning. Epstein files have made a lot of people in particular women be like, see there's like, it's a little bit of a MeToo 2.0 where like there's this like cabal of men taking advantage of women and they need to go. And yes, like one of the things I've heard in response a lot on Casey is like, well everyone like all these powerful men have like unhappy marriages or cheat and blah, blah, blah.
- [05:51]
A
Well, the music business in particular is rife with, with bad behavior, including agents at the Wasserman Agency.
- [05:59]
B
Right, I take that. And it doesn't really like exclipate or justify anyone else's behavior. Right. Saying like they're all bad doesn't mean. Well, so what, like they're all bad.
- [06:09]
A
No, I get that. I get that. What I was mostly carping on, and I wrote about this in my newsletter is what is in the record, what is in the evidence that we have seen. You can talk about the rumors around town, you can talk about what people say privately, but in the record. We have seen emails to Ghislaine Maxwell, we have seen a humanitarian trip with bill Clinton in 2002 on Epstein's plane. And we have seen this Daily Mail story that was not followed up by any other outlets. That's all I'm saying. Not justifying the behavior at all.
- [06:37]
B
You are raising the concern that some did in the wake of MeToo, which is that there was an overcorrection and there were, there were men who were accused of doing bad things or lost opportunities when their sins were relatively minor compared to the, the kind of the true monsters, the Harvey Weinstein's to Bill Cosmos.
- [06:53]
A
Maybe, maybe. But even just in this context because we had the LA28 board actually look at this and hire a law firm, o' Melveni Myers, to put their name on an investigation. Now we both know that internal investigations often are not dispositive. And we can cite five examples of instances during the MeToo era when companies had reviewed behavior and then all of a sudden more Stuff comes out. Not saying it's dispositive, but there is a law firm in L. A very powerful firm that put their name on this. And the board voted to back him.
- [07:26]
B
I would argue the kind of damage to his reputation, whether you fully believe in the allegations or not, is more of a problem for the Olympics than for his private company.
- [07:37]
A
Because he's a statesman when it comes to the Olympics. He's not even an agent.
- [07:40]
B
Private company. It's like, okay, he owns it, he can control it. And if people can either stay or not. Right?
- [07:45]
A
No, but you're missing the key element here. And I did write about this. It's the talent business. If you choose to get into the talent business, which Casey Wasserman did, you are subject to the whims of the artists you represent. And if you do things that artists will not like, you are absolutely exposed to them, leaving to them creating momentum that is going to ultimately cause you to have to sell the company. And that is what happened here. These artists did not like the behavior. Whether they were fanned by rivals, whether their own agents were pressing them to, to post stuff to try to get a better deal elsewhere, we don't know. But the artists ultimately are the kings in the talent business. And that's what happened here. And you got to accept it.
- [08:28]
B
He was new, a new player in music. Right. He had just bought a music booking agency in the Last couple years, 2021.
- [08:36]
A
He bought it from Paradigm.
- [08:37]
B
Right. And had just added a couple of high profile agents over the last years from wme. So it was something that he was new in, also a relatively small part of his business. He probably may regret doing that at this point because you did not see the same level of outrage from most of the athletes on his roster or from the Hollywood actors.
- [08:58]
A
He hosted his super bowl party. He was doing NBA All Star weekend events. In the sports world. This is not too big of a deal.
- [09:06]
B
Right. And I think even in certain corners of the music business, it wasn't as big a deal. But to your point, it becomes a growing problem and distraction because you like, I had heard the names of the other artists who were going to join Chapel, Roan and, and, and. And others or were at least threatening to do so. Right. And so if you had Coldplay or Ed Sheeran say, actually we don't want to do this anymore, that then becomes a real problem because those are two of the biggest artists in the world.
- [09:32]
A
Absolutely. And at that point, you're looking at the, you're playing this out. If you're him and his crisis PR people. And you're saying, okay, I sell now and I can stop the bleeding and this all goes away for now. I can wait a couple weeks and maybe the asset depreciates because our biggest acts have left and then I'm forced to sell.
- [09:52]
B
I have a question on this because I know that we want to get to the actual sale. I had heard, and I think I put in my. My newsletter, that he has actually explored selling this thing a couple times in the last few years. Do you think there's any part of him that actually is like, obviously not the circumstance in which he'd want to, but is actually kind of happy that.
- [10:12]
A
He, as of earlier this week, he was putting his head down and as of last week, I guess saying he could get through this. And my understanding is that he did not want to sell. Not on this. In this situation, not on these terms. But that gets us to the question of the sale process. My sources indicate that he's interviewing banks this week. There's already been teens, maybe up to 20 potential bidders that have expressed interest in this asset. This is a pretty major asset coming up for sale. How do we think this is going to play out? Who are the potential bidders here? And does this company stay together in a sale or does it get portioned up and sold off in pieces?
- [10:59]
B
Well, I think that's the big question. Right. Prior to him buying the Paradigm Music booking agency and Brillstein, which is a Hollywood management company, his business basically had two divisions. There was the sports talent representation. So they're agents to hundreds of athletes. And then there's a branding business that sort of helps on marketing and branding with a bunch of clients.
- [11:19]
A
And that's a big aspect of the business. I'm up to about 50% of the business.
- [11:23]
B
Yes, it's a big, big part of the business. Those two businesses would fit naturally inside another sports agency. Right. And there are no shortage of those that could try to buy it. You could also see those two businesses being split and having a sports agency or a company looking to buy sports. Get one, and the branding business gets sold to an ad agency or a consultancy. You throw in the Hollywood and the music and you both bring in more other potential buyers. But also in some ways would increase the possibility of it being split up. Right. Because the number of companies that are in all of those businesses, it's a relatively short list. It's basically your. Your CAA or uta, your WME and maybe a couple more.
- [12:04]
A
And those talent agencies would have to Sell off the management company Brillstein, because they're not allowed to produce. And those companies produce.
- [12:12]
B
And if caa, you know, had its deal for icm, the subject of relatively intense regulatory scrutiny and they are already the biggest sports agency. If they went after Wasserman, I think that would invite, you know, that would be problematic from a regulatory perspective for them. Wme, because of what's happened with Endeavor is. Is sort of a weird buyer just because they've split up some of the players.
- [12:34]
A
Yeah, but they have Silver Lake behind them.
- [12:35]
B
They do. And then you have the wild card of like, does one of these newer, like one of these management rollups want to go in and try to buy it as their big sports play? Right. The initial group or whatever the hell that TPG thing is called, would.
- [12:47]
A
Well, but you're, but you're thinking strategic buyers here, I think.
- [12:50]
B
And then you can go for private equity or.
- [12:52]
A
Yeah, I mean, Excel, the sports agency agency, was just bought by Goldman Sachs and any number of PE firms would be interested in this asset. I mean, it's really one of the last, like, big platforms, big, you know, already rolled up company. I mean, he put together like 50, 60 different companies into this one entity and you could pay a couple billion dollars and all of a sudden be a player in sports, music and talent.
- [13:19]
B
You get immediate exposure to sports, which I think if you're a private equity would be the primary interest.
- [13:25]
A
I mean, they're all looking at buying 10% of, you know, football teams or whatever. Here you could become a player in sports instantly and not have to deal with the leagues.
- [13:34]
B
I mean, Wasserman is a, you know, a top, probably a top three sports agency and a top for music agency. And then Brillstein is a really solid management company. So it is an easy entree into the entertainment world for anyone who wants to be there. The branding businesses I always find a little squishy. I know it does really well for them, but that is such a weird business.
- [13:58]
A
They make a lot of money on it, though.
- [14:00]
B
This podcast is brought to you by Carvana. Selling your car shouldn't feel like a second job. It should feel easy. With Carvana, it is. Just visit Carvana.com Enter your license plate or vin, answer a few quick questions and get an offer in minutes. Like what you see. We'll pick it up right from your door and hand you your check. No haggling, no hassle, no problem. Car selling made easy on Carvana. Pickup fees may apply. This episode is brought to you by Whole Foods Market and New Year means a whole new batch of wellness goals. And Whole Foods Market is the best place to start. From sales on supplements and vitamins, protein powders, probiotics and much more, they've got everything you need to upgrade your routine with ingredients you can trust. You'll also find lean proteins like sustainable wild caught sockeye salmon, plus smart meal shortcuts from the 365 brand like they're ready to eat salads. Even dry. January is covered with a host of non alcoholic drinks. Shop all things wellness at Whole Foods market must be 21 plus in select states.
- [15:06]
A
The most intriguing aspect here to me is we could see A Ari Emanuel vs Patrick Weitzel bidding process if Ari is aligned with WME, which he formerly ran and is now executive chairman of. And they go after this with Silver Lake's money. Potentially. Patrick Whitesell, who left, was the co.
- [15:27]
B
Founder of wme, has Silver Lakes money.
- [15:29]
A
And also has Silver Lakes money. And if he, he'd probably have to raise more money because he's been out there trying to buy stuff in the, you know, kind of smaller stuff and hasn't been able to.
- [15:39]
B
Well, no, he's bought a couple things, but he, he had, you know, $250 million to play with, but the ability to go up if he wanted to. Whereas WME Group is, it's much larger. And also Ari's separate Mari thing has a couple billion dollars.
- [15:54]
A
Right.
- [15:54]
B
This would seem to fit more in the WME lane than the Mari lane, but you never know with that guy.
- [16:00]
A
Exactly. And I mean, and I guess TKO would be out because they are in.
- [16:04]
B
These, they're not in the representation business. Do you think that there's a world in which uta, given some of its recent kind of problems and turnover, would, would sort of see this as a way to get into the big leagues with.
- [16:16]
A
With.
- [16:16]
B
Sure, why not me again?
- [16:17]
A
I mean they'd have to convince their private equity owners. And I had heard that the UTA backer has actually been looking to exit. So they. That might be problematic and going from potentially exiting to potentially tripling down on this big company, but maybe they'd be interested in a portion of it. The Mari, the Ari versus Patrick thing is interesting because obviously Patrick and Ari were once partners, are now kind of not on the best terms and Ari and Casey Wasserman are like sworn enemies, do not like each other to the point where I would be so shocked if Kasey authorized a sale to a company that was even affiliated with Ari.
- [17:00]
B
He's been telling people that he thinks that Ari has been Behind a lot of what's happened to him.
- [17:05]
A
Right. And so why would he ever let his company go to an Ari affiliated company? But you know what? Maybe not up to him. Providence, the, the, the financial backer has about 60% ownership of this company, I am told. Now some say it's a little higher. I do not know the exact amount that Kasey owns. I have been told it's in the 25% range. That is not confirmed. But they both have to agree on a, on a sale here.
- [17:33]
B
This actually works within Providence's timeline to sell because they've been in it for about five years.
- [17:38]
A
I think maybe they're the ones that have been fanning the flames. I doubt that.
- [17:43]
B
I'm not getting into that. But do you know the source of, of Ari's animosity towards Kasey or their, their mutual dislike?
- [17:51]
A
I. All I know is that it goes back to rivalry from the WME days when Ari was day to day.
- [17:58]
B
What I'd been told was that 20 plus years ago, back when Casey was, was owning a bunch of Arena Football League teams, actually then Endeavor went to. Went really deep into talks with Kasey where Casey was going to invest, and Casey pulled out at the very last minute.
- [18:15]
A
I mean, also, they're just oil and water. Like.
- [18:18]
B
Yeah.
- [18:19]
A
Ari is Mr. Self Made Man, Mr. Up From Nothing. He has a chip on his shoulder about anyone who he perceives to have inherited anything. That's been his beef with caa.
- [18:29]
B
Kasey basically used his inheritance to build his business. Now he worked really fucking hard, but he's still golden spoon.
- [18:36]
A
Yeah. This is why Ari hates CAA so much. For many reasons, but he thinks those guys were handed the agency from Ovitz and those guys and then built what they built. Ari's like, oh, I, I built my whole thing. Whatever.
- [18:47]
B
It.
- [18:48]
A
It would just surprise me if Kasey authorized a sale to any company that had anything to do with Ari.
- [18:55]
B
Do you think it's more likely to go strategic or financial?
- [18:58]
A
Financial. I just think that with, with what we saw with Excel, which is the best comp here, I guess, where Goldman just wasn't even considered a bidder and all of a sudden they're coming out of nowhere. The question is, how much does it go for? Yeah, because I've seen estimates anywhere from a billion to like 3 or 4 billion.
- [19:17]
B
3 or 4 seems rich. In fairness, I don't know the financials, so we don't.
- [19:22]
A
I mean the reporting has been that they're. They're at about 100 million a year in EBITDA yeah. And a billion.
- [19:29]
B
You're telling me it's going to get a 30 multiple that I don't see.
- [19:33]
A
I'm not, I'm not telling you that. I'm just saying what, what the rumors are out there.
- [19:36]
B
30 to 40 multiple would be pretty rich.
- [19:38]
A
But, but, but I. The excel multiple was like 18 19. Sure.
- [19:44]
B
So that would put this in the, the 15 to 2 range. Sure.
- [19:48]
A
And it just seems like a private equity firm would have all the incentive to get into this space. We know they're all circling. We know they're looking.
- [19:57]
B
There already is a private equity firm in it.
- [19:59]
A
Yeah, exactly.
- [20:00]
B
But it's trading from one to another.
- [20:03]
A
All right, so the third question here is why does this matter? What does this say about where we are in the representation business? Because what I thought.
- [20:10]
B
Well, do you think, do you think it says something about where we are in the representation business?
- [20:13]
A
Well, the, the sale process and how this could reshape the representation business.
- [20:18]
B
So we're talking about the sale process more so than the, the scandal drama.
- [20:22]
A
Yes. And, and where this asset ends up because it could transform one of these players or it could transform someone who wants to get into this business.
- [20:30]
B
If we have a strategic deal, it is potentially transformative because it either makes an existing power much, much stronger or it can level up a second tier, third tier player to the big leagues.
- [20:45]
A
It's like what happened with IMG when WME bought IMG back in the day after Teddy Forstman died.
- [20:51]
B
Well, that was also just a sign of Ahri and Patrick's sort of boundless ambition.
- [20:55]
A
Yes. And by the way, Teddy Forsman and Ari did not get along either. So maybe there is a path. Money toss.
- [21:01]
B
Well, I think that was another issue. I think Kasey really wanted IMG and Ari and Patrick ended up getting it. Yeah, like Kasey developed a relationship with one of the people anyways. And. But if it goes financial, I guess I see it as sort of less transformative because it already is kind of financial. But Wasserman has been building out. Right. They bought Brillstein, they bought Paradigm. So if they have a buyer who wants to keep, keep funding that.
- [21:25]
A
I'm thinking of a buyer like the Arnault family, the Kering family.
- [21:30]
B
So we're going to have a French billionaire rivalry in entertainment.
- [21:33]
A
Exactly. Like they saw what the Pinault family has done with CAA and bought majority stake in caa. Maybe there will be a French luxury goods rivalry in Hollywood oriented talent.
- [21:45]
B
The other wrinkle to this, I guess is who is going to run it. And do they wait until after they have a buyer to really put someone in charge or I. They have to, you know, they obviously have to. They have a temporary steward.
- [21:57]
A
Good question. Who would want to buy that? I mean, there's plenty of potentials.
- [22:01]
B
Could be your next career.
- [22:02]
A
I know, maybe I'll, maybe Craig and I will go over and run that.
- [22:05]
B
I know we're focused on the sale, but I'm just curious. Karen Bass came out kind of last, last night.
- [22:11]
A
The mayor of L. A? Yes, the mayor of L. A who's polling at what, 20 something percent and.
- [22:15]
B
Who'S been totally silent on this issue.
- [22:18]
A
Until days ago, she was totally, totally okay with whatever the board did. And now when she gets a challenger in the mayor's race from the left, she all of a sudden decides that Casey has to go right.
- [22:29]
B
Do you think that we are done with, with the Olympic part of this story?
- [22:33]
A
Good question. I actually don't think so. I think that if there is follow up media coverage, I know the Journal, our friend Jessica Tunle is working on a story about Kasey. I know there are other things that potentially could come out about him. If that drip of news coverage continues, you could see further pressure on him to step down. The question is which voice would be influential over this board? Because the mayor doesn't have any control over the LA28 board other than her voice in public. The city council doesn't have any control. The LA28 board is operating on its own. The city is not putting any money in.
- [23:12]
B
My understanding is that the board doesn't even really have control. That for Casey to leave, Kayce would sort of have to voluntarily step aside.
- [23:19]
A
Well, they'd have to vote him out. But these are, these are board members that have long relationships with him. His own deal lawyer is on that board. Jeffrey Katzenberg and Melody Hobson, two prominent Democratic donors that he's been friends with for years are on that board. It would have to be a significant voice coming out and saying, get rid of this guy. Like some kind of a. One of the big sponsors of the Olympics or maybe Gavin Newsom. I don't know that he would even be dispositive here.
- [23:46]
B
And he, he might support it behind the scenes, but I don't see him sticking his neck out and he's, and he's leaving office.
- [23:52]
A
He's not going to be around during the Olympics. So I don't know who that voice is. And obviously it's not going to come from the Trump or if everyone were.
- [23:58]
B
To coalesce behind someone that they think is better for the job?
- [24:01]
A
I guess, maybe, yeah. Bob Iger all of a sudden came out and said, I'll do it for free and I can make this happen. But the chances are if, if Casey stepped down, it wouldn't be Bob Iger. Then the Trump people would get involved because they have the money dangling over this and Kevin McCarthy and Donald Trump Jr. And all of those people would be in the mix.
- [24:19]
B
I've heard all of these theories.
- [24:21]
A
You know, he probably would have taken a year off from the company anyways to do the Olympics. So assuming he can stay in that role, it's actually almost better for the Olympics because you have a guy with a huge chip on his shoulder that really wants to prove to the world that he can do something right.
- [24:37]
B
Even people I know who are good friends of Kasey, as this was kind of gathering steam, were wondering why he didn't just kind of disappear for a few months. Right. Like, why subject yourself to it? Go work on your. Let's just say that many of the things that are reported are true or even kind of true. Like, go work on yourself or take a break from the public spotlight. Like, just get out of dodge. Stop being a main character in this story. The Olympics aren't until the summer of 28. If you want to stay on the board, if you're going to keep leading it, you can do some of that stuff in private. But your return as a public figure doesn't have to happen for another. For another year.
- [25:16]
A
Don't host three parties in two weeks in the sports world.
- [25:19]
B
Yeah, yeah. If people are really mad at you, don't give them more to. To feed off of. And obviously people who are more critical of him think he should go away. So it feels like a time to recede. But he has not wanted to do that. And he's always enjoyed being a public figure. And it seems pretty clear that while he kind of regrets certain things that he and his allies feel he has been sort of unfairly targeted and so he probably doesn't want to just give them a win.
- [25:47]
A
Yeah, he was talking about public office like, a while back. Like he saw the Olympics as a platform for him to potentially do something bigger.
- [25:58]
B
He was incredibly close with Eric Garcetti, the former mayor. They were the sort of the two people who brought the Olympics to la.
- [26:03]
A
I think public service is probably out at this point, although these days you never know. You never know.
- [26:11]
B
Maybe he'll.
- [26:11]
A
Maybe he'll join the J.D. vance administration. All right, thank you, Lucas. We Are back with the call sheet. I asked Lucas to stay because he broke some news this past weekend that was confirmed this morning. Warner Brothers is reopening the talks with Paramount for seven days now. They're going to give him a week to explain, clarify up their offer, do something that Paramount will have to convince Warners is going to make their offer better than it currently. Best and final again. Best and final. Best and final. Final.
- [26:49]
B
Well, they said the last one wasn't best and final, but yes, this is put up for shut up time. This is, what is this?
- [26:54]
A
The tenth bid? Eleven?
- [26:55]
B
Something like that. This is Warner Brothers saying, okay, Paramount, you guys have been needling us for a couple of months. You're saying your deal is better.
- [27:02]
A
Keep calling our shareholders. You're telling them to change their vote.
- [27:05]
B
You're, you're, you've launched a pseudo hostile offer. You're, you're set, you're meeting with regulators, you're doing everything you can to, to sort of get yourself in the game for this deal you now have. You keep saying also to your, to your guys joke, it's not best and final. Tell us what the best and final offer is and if it's, if it's really better, we will take it to Netflix and say, you guys match this or sorry, we're going with Paramount. That's, that's the game. Warner Brothers wants to get this thing done right? They want to get a, they want, they want a deal agreed upon by their shareholders so that they can go through the regulatory process and get their shareholders paid. And so they now have essentially a month before that.
- [27:43]
A
Does any part of you guys believe that this is all part of the elaborate long term ruse by Netflix to drive up a price from Paramount so that they pay the most they possibly can for Warner Brothers or no way. No, no, it's too big of a pain in the ass to do that, in my opinion. I mean, that's a nice byproduct if they ultimately end up not getting it or if the government blocks it. But I don't think Netflix would go through this whole rigmarole. And now the government is looking at their overall business practices. I don't think they do that unless they actually do want the asset really bad.
- [28:13]
B
Agreed. But I do think that if Paramount ends up winning, every reporter in the world is going to be getting a call from Netflix going, can you believe how much money Paramount's paying for this business? It's not worth it if Paramount does.
- [28:26]
A
End up getting Warner Brothers and Warner Brothers decides to go with Paramount. Paramount has to pay Netflix like a $2.8 billion fee, correct?
- [28:32]
B
Yeah.
- [28:32]
A
And that was part of the most recent sweetener that they offered to do that. And they're going to pay more if they can't get this approved by regulators by the end of the year, which suggests they are confident that that will happen. Who knows if that will. But my prediction here is that they will up the dollar amount. They will go to $31 a share, $32 a share. Something like this will happen before the end of this seven day period.
- [28:58]
B
I think it's got to be more than a dollar a share. I think especially if they want to put netf and where it's hard for them to match, I think they got to go up at least like $3 a share.
- [29:08]
A
Can we keep the prediction train rolling? If they do do that, then what? Yeah, does Netflix match? That's the question.
- [29:13]
B
I think it depends.
- [29:14]
A
I said this from the beginning. At some point Netflix has shareholders and the Paramount Group, the Ellison don't have to care about their shareholders. So Netflix is going to have a ceiling at some point where the shareholders are going to be like not worth it. We don't know where that is and we don't know whether they're close yet or not. But at some point they will. And I don't know, I mean, if I'm David Zaslav, I'm just sitting back laughing.
- [29:39]
B
Everyone laughed at them when they said $30 a share. Now they're going to get north of $30 a share more than likely.
- [29:45]
A
And as we know on this podcast, all we care about is whether this deal gives David Zaslav even more money.
- [29:51]
B
That is our goal for him to then go and buy the Wasserman agency.
- [29:54]
A
He shipped by the Washington. So you don't have a prediction on the number you think 33, 34.
- [29:59]
B
I haven't done enough reporting on to make a prediction. I just, I know that 31 increasing by a dollar won't do it. And I know that Paramount has been talking about kind of the right number that would make it unattainable for Netflix because we've seen Netflix shareholders react negatively to this. So I think it probably starts at 3250. I think if it's, if, because if it's just $2 a share, I think Netflix will go up. But I think 3250, which would put Netflix's offer if they had to match above $30 for their, for the, for the two divisions, for their portion. Right. I think that's probably the line where it starts to get hard for Netflix.
- [30:38]
A
We shall see. All right, Lucas, thanks very much.
- [30:40]
B
Thanks, man.
- [30:41]
A
All right, that's the show for today. I want to thank my guest, Lucas Shaw, producer Craig Horbeck, artist Jesse Lopez and Jon Jones. And I want to thank you. We'll see you a couple more times this week. Monster Energy. Everybody knows White Monster Zero Ultra, that's the OG it kicked off this whole zero sugar energy drink thing, but Ultra is a whole lineup now. You've got Strawberry Dreams, Blue Hawaiian Sunrise, and Vice Guava. And they all bring the Monster Energy punch. So if you've been living in the White can branch out. Ultra's got a flavor for every vibe, and every single one is Zero Sugar. Tap the banner to learn more.
- [31:21]
B
It's tax season, and at Lifelock, we know you're tired of numbers, but here's a big one you need to hear. Billions. That's the amount of money and refunds the IRS has flagged for possible identity fraud. Now here's another big number. 100 million. That's how many data points LifeLock monitors every second. If your identity is stolen, we'll fix it, guaranteed. One last big number. Save up to 40% your first year. Visit lifelock.com podcast for the threats you can't control. Terms apply.