It’s the intrigue of the hour in Hollywood, and the implications are real for the U.S. entertainment and news industries: Who will win the bidding war for Warner Bros. Discovery $WBD, which includes HBO and CNN: Larry and David Ellison’s Trump-aligned Paramount Skydance $PSKY with its Saudi-backed and Jared-Kushner-managed bid, or Netflix $NFLX, the streaming giant that’s got a production deal with Barack and Michelle Obama?
Last week’s $72 billion Netflix megabid for the stumbling WBD media empire was not the end of the matter (as BBTW and Porky Pig suggested last week). Now mogul David Ellison (son of Oracle’s $ORCL Larry Ellison) is leading with a $108 billion hostile bid for the whole WBD package, including the broadcast unit and CNN, which WBD’s board earlier said was going to be spun off into a separate company.
Hollywood is rooting for Netflix, both for money and politics. “I’m ecstatic about anything that keeps WB out of the clutches of the MAGAsphere, which is where Paramount resides,” one prominent Hollywood agent told BBTW without wishing to be named. “At least Netflix is run by sane people. I doubt they’re going to dismantle Warner Bros films, WBTV, or any of WB’s other excellent and time-honored divisions.”
As the agent who didn’t want to ruin his lunch hour, noted, a Paramount-WB studio merger would stifle competition — and paychecks — for talent, but Netflix acquiring Warner Bros. will just speed up Hollywood’s inevitable move away from in-theater movie releases. “The worst that happens is shorter feature release windows in theaters, and that’s the way the film industry is going in any event.”
The last two big studio mergers didn’t turn out well for Hollywood: Disney’s $DIS purchase of 20th Century Fox from the Murdochs saw it effectively stop making films, and Amazon’s $AMZN 2022 purchase of Metro-Goldwyn-Mayer stifled the lion’s roar, effectively turning MGM into a film library.
Beyond Hollywood, there’s deep concern about the outsize role of three Gulf Arab state investment funds, including Saudi Arabia’s Public Investment Fund, in the Paramount bid. They have committed $24 billion to Paramount’s bid (Paramount’s market cap is just $15.4 billion). Saudi’s PIF also funds Jared Kushner’s Affinity Partners. Paramount has told the SEC that the Gulf funds would give up any voting rights, but as the largest equity investors, they’d still carry weight.
A major concern is the effect combining CBS and CNN would have on the independence of the U.S. media, where politically active right-leaning media companies like Rupert and Lachlan Murdoch’s Fox $NWSA have outsized influence. Trump said on Sunday that he would “be involved” in the sale decision.
“What I think [Ellison] has in mind is to effectively challenge the Murdoch operation so there would be two giant [media] corporations in competition with each other,” Marvin Kalb, the founding director of the Shorenstein Center on Media, Politics and Public Policy at Harvard, told BBTW. “Politically, that presents a huge problem for [the U.S.], because Trump already has the support of the Fox operation, and if he also then has CBS and CNN, he would be in the position of a dictator having effective control over media from top to bottom.”
In a normal merger of this size and with its outsized influence on American society, regulators would scrutinize the proposals and might even scupper both deals in favor of WBD’s split into two public companies. But under a Trump administration, regulators are bending to the Administration’s will, said Reuben Miller, the chief regulatory analyst at Dealreporter. Even a national security review by the Committee on Foreign Investment in the U.S. will likely be a breeze, said Miller. “With Kushner’s Affinity Partners’ involvement, it’s basically a get-out-of-jail-free card for the CFIUS process,” Miller said. “There’s been a number of mergers in the last year where the chief of the antitrust division, Abigail Slater, has been overruled by senior officials at the Department of Justice and White House officials.”
More likely, he said, Netflix may be investigated for having too big a slice of the streaming market when it acquires Warner Bros’ catalogue and HBO.
—Peter S. Green
Big businesses mentioned this week
$WBD ( ▼ 0.14% ) $PSKY ( ▼ 4.08% ) $NFLX ( ▲ 1.49% ) $DIS ( ▲ 2.42% ) $AMZN ( ▼ 0.65% ) $ORCL ( ▼ 10.83% ) $MICC ( ▲ 4.07% ) $UL ( ▲ 1.5% ) $CPB ( ▲ 0.89% ) $CBRL ( ▲ 1.0% ) $STLA ( ▼ 2.64% ) $GM ( ▲ 0.06% ) $CART ( ▲ 2.68% ) $XOM ( 0.0% ) $CVX ( ▼ 0.46% )
Chips, ahoy!
- What’s a chip worth? That’s one of the biggest questions and major concerns fueling worries about an AI bubble. Or more precisely, just how long will an AI chip last before the next generation chip puts it on the shelf? Moore’s law still seems to rule, and that has investors worried. If Nvidia $NVDA ( ▼ 1.55% ) chips become obsolete in less than three years, as many suspect they will, that could crash the value of AI farms, where investors are betting their expensive chips will last as long as six years. But if they don’t, and new billions are needed for buying the latest chip, the current financing model could collapse, along with the profits of AI firms, which will have to double the cash they spend on new equipment.
- Shoulda seen it coming: Shares in Larry Ellison’s Oracle $ORCL ( ▼ 10.83% ) plummeted 14% by midday Thursday as its plans for vast AI spending came in way above Wall Street’s estimates and its revenue came in well below. Even as profits grew with per-share earnings of $2.26 blasting past Wall Street’s $1.64 estimate, the problem is the high spending (planned AI outlays on its new data centers jumped from $35 billion for 2026 to $50 billion) and the fact that most of its revenue comes from contracts for services that will take years to be delivered and paid for. Shares are down about 40% from their September peak, just after announcing a vast deal with OpenAI, even as the Magnificent Seven tech stocks have climbed 10%. Ellison owns about 41% of Oracle, and his own net worth has been on a rollercoaster ride alongside the stock, jumping from around $150 billion in early 2025, to $238 billion on Thursday, but briefly cracking $400 billion and besting Elon Musk as the world’s richest man for a day, the Bloomberg Billionaires Index shows. Meanwhile, the stock market continues to rise, as the Fed rate cut and the AI boom boost spending.
- Palantir sub contracting: The U.S. The Navy is handing over the management of its submarine repair and building pipeline to Peter Thiel’s Palantir, and its CEO, Alex Karp. The $440 million contract would save about 20,000 man hours a year, the company said (that’s about 10 full-time employees worth). More importantly it aims to prevent bottlenecks that delay sub repairs by years.
- Soft dreams are made of these: Masayoshi Son, the Japanese investor who runs the quixotic Softbank $SFTBY ( ▼ 0.59% ) investment fund (it made billions on China’s Alibaba, and lost billions on WeWork and the tech stock plunge of 2022-23) says he’s planning to take hundreds of billions of dollars that Japan has kinda-sorta pledged to invest in the U.S., and build a group of Trump-branded industrial parks on Federal land to manufacture AI infrastructure parts. Son says he’ll start building next year, but under the tariff-cutting U.S.-Japan trade deal the money’s a part of, cash won’t start flowing until 2029. Siphoning that cash out of Japan could destabilize the Japanese economy, and would effectively be a low-cost but risky loan to the U.S. In a fascinating analysis, the St. Louis Fed says Japan might be better off tearing up the trade agreement and accepting higher tariffs.
- The Nvidia nversion: After lobbying by Nvidia CEO Jensen Huang, President Trump agreed the U.S. based chipmaker could export its H200 chips to China, if it paid a 25% surcharge to the U.S. government, part of Trump’s vision of a booming role for government in the economy. National security hawks (and Chinese tech firms) said the chips could give China a step up in the race for AI supremacy, while Hunag argued the market would be huge. But Beijing has other ideas. It is reportedly planning strict limits on the H200 in a bid to stimulate demand for its own advanced AI-capable chips. Meanwhile, the U.S. Attorney in Houston said this week that the feds had busted a chip-smuggling ring that had sent or tried to send more than $160 million of export-restricted computer chips to China. The chips in question? Nvidia’s H100 and H200 GPUs.
- Details are emerging of another chip transfer: Nexperia, the Dutch company that makes chips for car parts, began working to move research and technology to China when it was bought by Chinese government-backed Wingtech in 2019, the firm’s Dutch former CEO told the New York Times. The Dutch government seized Nexperia in September amid concerns China would cut off the chip supply to European carmakers.
The Usual Suspects
- Ben & Jerry’s great stock market adventure: Magnum Ice Cream $MAG ( ▼ 0.1% ) , the Unilever $UL ( ▲ 1.5% ) spinoff that holds ice cream makers Ben & Jerry’s, Breyers, and Cornetto (and of course the chocolate-dipped Magnum bar) opened on Amsterdam’s Euronext exchange with a market cap of $9 billion. The company sees its biggest growth in the U.S. where Americans eat about 4 gallons of ice cream a year each, and the market is expected to grow from $79 billion in 2024 to $132 billion by 2032, especially because consumers will be able to offset the effects of eating so many magnums with GLP-1 weight loss drugs by then. Magnum holds about a 20% market share of the ice cream market in the U.S.
- Campbell’s is in the soup: It wasn’t enough for a top Campbell’s Soup $CPB ( ▲ 0.89% ) exec to be ousted last month after he allegedly called the company’s famous canned soups “highly processed food” for “poor people,” that included “bioengineered meat.” (Campbell’s said their meat is not 3-D printed). but tariffs on steel and aluminum used in cans, and on imports from Europe including Rao’s spaghetti sauce had cooled profits, so it’s hiking prices in prime soup season. The company said sales were down 2% from a year earlier in the last quarter, but its share price is down 35% this year.
- Cracker Barrel’s kitchen ills: It’s not just the rebranding controversy that’s killing Cracker Barrel $CBRL ( ▲ 1.0% ) : Food sales at the southern charm roadside rest stops are down 4.7% (retail sales are worse, down 8.5%), and foot traffic at its 660 locations dropped 9% in early November from a year earlier. Customers tell the Wall Street Journal it’s about more than the logo. Cost-cutting programs sapped food quality, they say. “Ingredients and recipes changed,” one customer told the news org. “Same names but different experience.”
- Stellantis’ move-out fee: Carmaker Stellantis $STLA ( ▼ 2.64% ) is on the hook for about $157 million, after moving its Brompton, Ontario plant to the U.S. in response to Trump’s 25% tariff on auto and auto part imports. That’s how much the Ontario government had given Stellantis in aid to retool the factory to make gas-and electric-versions of the Jeep Compass SUV. A Stellantis spokeswoman said the shuttered plant wasn’t shuttered, just undergoing “an operational pause,” and that its 3,000 furloughed employees were still employed by Stellantis. Shares in the carmaker are down about 14% this year, but up nearly 40% from an early-April low. GM $GM ( ▲ 0.06% ) has also halted some production in Canada because of the Trump tariffs and reciprocal Canadian tariffs.
The short stack
- Two shoppers walk into an Instacart: It sounds like the setup for a dad joke, but it’s just the latest expose of surveillance pricing, a tech-powered technique that adjusts prices for an item based on an individual consumer’s profile. When Consumer Reports and two other groups did a series of tests, sending shoppers to Instacart $CART ( ▲ 2.68% ) to buy the same item in the same store at the same time, (they were linked in a Zoom call), they found some shoppers were charged as much as 23% more than others, with an average difference of 13%. In one instance, a dozen eggs sold for $3.99, $4.28, $4.59, $4.69, and $4.79 on Instacart at a Safeway store in Washington, D.C. Over a year, that could cost the average family $1,200. That’s thrown some shade on surveillance pricing. Instacart’s share price dropped more than 8% following the report’s release, though it’s since recovered a bit.
- Team USA’s own goal? The deal that host cities signed with soccer’s governing body FIFA to hold this year’s world cup at 26 sites in North America World Cup is gearing up to be a financial fiasco. Facing a collective funding shortfall of about $250 million, their contracts with FIFA bar them from doing what most host cities do - turn to local merchants for sponsorship. The merchants get to promote their brands and the cities get cash to cover the cost of putting on the tournament. But according to U.K. newspaper The Independent, cities can’t sign sponsorship deals with local business that might be in the same line of business as the Cup’s main sponsors, who include McDonald’s (Philly’s bid for a WaWa sponsorship was nixed), Bank of America (no local banks), Anheuser-Busch (no local breweries) and Coke (no other soft drinks). And that’s not all. Egypt and Iran, two Middle East nations that target gays and lesbians, have also complained to FIFA over a World Cup soccer match in Seattle that is planned to celebrate LGBTQ+ Pride. As the Associated Press reports, FIFA risks being accused of a double standard if it sides with World Cup teams’ federations over the city of Seattle. In 2022, at the World Cup in Qatar, FIFA fiercely defended the right of the host nation’s cultural norms to be respected in full by visiting teams, (a.k.a no Pride flags) although notably, Qatar’s scoring the World Cup was dogged by allegations of bribery. Neither Egypt or Iran have vied to host the tournament themselves, or bought the American President an airplane recently. So they might have to suck it up.
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Elon’s World
- About that Space Race. First, it was comms satellites (Starlink versus Project Kuiper a.k.a. Leo), then moon shots (SpaceX v. Blue Moon), and now Musk and Amazon $AMZN ( ▼ 0.65% ) boss Jeff Bezos are dueling over orbital AI data centers. The advantage of putting AI centers in space? There’s no issue cooling off the GPUs, and free solar energy removes one barrier to Earthly expansion. But the disadvantages? Pretty much everything, from hosting the payloads into orbit or making repairs to getting the data up to the heavens and back without any lag time. Google $GOOGL ( ▼ 2.43% ) is planning its own orbital AI data center test in 2027.
- Whether or not it puts AI data centers into orbit, SpaceX still thinks it’s got a bright future. It’s considering an IPO next year after a capital raise that could value the rocket shop at $800 billion, making it the most valuable private company in the U.S. In July, a secondary share sale valued SpaceX at $400 billion. That’s even as the company has suffered a series of launch pad and midair explosions, prompting NASA to award some moon landing contracts to rival Blue Origin. Musk has a 40% stake in SpaceX, but the new raise could cut that percentage.
About those rates
Now that the Fed has come through with another quarter-percentage rate cut, the big question is: What happens next? Will mortgage rates fall? Will inflation stay tamed? Will hiring pick up? BBTW asked EY-Parthenon Chief Economist Gregory Daco for his take on how the Fed rate cuts will affect consumers:
BBTW: What’s the key takeaway for our readers from this week’s rate cut?
Daco: The main message is that a single rate cut helps, but it works slowly and its effect is limited. Mortgage rates may edge lower, but only gradually, because they depend more on longer-term market yields than on the Fed’s policy rate. At present the yield curve is steepening because of higher inflation, a concerning debt trajectory, optimism around AI driven growth and concerns about political influence on the Fed.
Will lower rates make firms more likely to hire?
Cheaper credit gives firms a bit more breathing room, especially on refinancing, but it is unlikely to trigger a hiring surge. With demand cooling and uncertainty still elevated, most companies will remain cautious.
Will lower rates help firms absorb some of the cost of tariffs and bring down prices for consumers?
Lower interest costs provide only a small offset. Tariff-related price pressures come from supply constraints, so monetary policy cannot undo them. That is why our core inflation view remains close to 3% through H1 2026.
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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
