KELLY O'GRADY:
00:00:38
So nothing immediately because this has to get shareholder approval, government approval. And then the whole thing, I mean, these are two really big companies, depending on which merge, it's going to take 12 to 18 months. But let's say a deal does go through. It could mean distinct less streaming services. And so in that, there's the concern that if you have less competition, you could see higher prices. On the flip side though, you could have more convenience, more content in one place rather than you've got all these apps--
NATE BURLESON:
00:01:06
More streamlined. Exactly. Right? The other concern is Netflix. They have a straight-to-streaming model with a lot of their films. So you might see less theatrical releases. All of these things are going to be really at the heart of the regulatory process, especially if you have a number one streamer like Netflix buying a number three streamer like HBO Max, which is owned by Warner. So fewer theater releases could affect towns that have theaters and depend on them. And then, I did hear you say higher prices, potentially. But let's go through the deals themselves. First of all, we call them a hostile takeover deal. Does that mean they're calling people names? What does that mean?
GAYLE KING:
00:01:37
That's never a good-- hostile anything is never a good thing. Maybe. So hostile takeover is very simply that a company is trying to acquire another without the approval of the board. And that's what's happened in this case. That's what Paramount is doing. And in this case, they have gone with a tender offer. So they're going straight to shareholders and saying, I will pay you $30 per share. And they're trying to amass a number of shares so that they have a controlling interest. And it doesn't matter what the board says. And so shareholders are faced with this question. Do you go with the certainty of a bid with Paramount, which is $30 right now, or do you hold and take your risk with Netflix? Because of course, that might not get approved.
GAYLE KING:
00:02:16
Well, Ted Sarandos, a big cheese at Netflix, seems to be very confident about this deal. He said as far as he's concerned, this deal is done. Does he have reason to be confident?
KELLY O'GRADY:
00:02:24
He may. Right? $30 per share, all cash, is what Paramount Skydance is offering. That provides certainty. But Netflix, it's $27.75. But it's only for the studio and the streamer. So you have to believe that the TV network business is worth more than the difference between those two prices because Paramount is willing to buy the whole thing. The other thing that Sarandos is betting on is that, one, people are actually going to want to get Netflix stock in compensation for this deal. Right? Because it's a combination Netflix is offering of some cash, some Netflix stock, and that people would want to be a part of this Netflix merger in the future.
GAYLE KING:
00:03:03
When do you think we'll have an answer to this? It's going to be a while, right? So the Paramount shareholders have to accept the Paramount deal by January 8. So that soon. Very soon. But then, the regulatory process will be longer.
GAYLE KING:
00:03:14
All right. Kelly O'Grady, always good to have you at the table. Thank you so much.
