Another billionaire thinks he can fix Warner Bros.

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Nilay Patel (0:17)

Hello, and welcome to Decoder. I'm Nilay Patel, Editor-in-Chief of The Verge, and Decoder is my show about big ideas and other problems. Today, I'm talking to Peter Kafka, Chief Correspondent at Business Insider and host of the channel's podcast about the gigantic Warner Bros-Paramount merger and the future of the company now simply called Skydance. Skydance is owned by David Ellison's son of Oracle CEO, Larry Ellison, and its deal to acquire Warner Bros. Discovery officially closed the day Peter and I recorded this conversation. Ellison and Skydance have obviously grand ambitions for Warner, but the reality is that acquiring Warner has never gone well for anyone. AOL failed to do anything with Warner, AT&T failed, Discovery failed, although it did succeed in flipping the assets to Skydance. So I wanted to ask Peter if he thinks the Ellisons and Skydance have a real shot at succeeding and there are so many other companies who have hit the rocks. It will probably not shock you to hear that Peter doesn't think Skydance has a clearer business plan than any of the last few companies that tried to make Warner Bros a success, but he's got some really good guesses about what they might try next. On top of that, he just wrote a profile of new Skydance co-CEO Ynon Kriez for Business Insider and he has quite a lot of insight into what he might be tasked with doing at the new company. Before we get going, do me a favor and subscribe to Decoder on YouTube where we release new episodes every Monday and Thursday. Okay, Peter Kafka on Warner Bros and Skydance. Here we go. Peter Kafka, you're the chief correspondent at Business Insider. You're the host of the Channels Podcast, our sister podcast here on the Vox Media Podcast Network. Welcome back to Decoder.

Peter Kafka (1:40)

Thanks for having me. It's Big Media Day again.

Nilay Patel (1:42)

It's Big Media Day. It's an auspicious day, as my parents would say. It is the day that the Warner Paramount merger closes. We've all been calling it WarnerMount, but I'm told this company will instead just be called Skydance. Skydance.

Which is quite an name. Every time I see the word Skydance, I assume it is four-nodes, which maybe is probably true in this deal.

Peter Kafka (2:05)

Another way to think of it is there's iconic names in Hollywood. Paramount, such an iconic name that Viacom turned itself into Paramount years ago. Warner Brothers, Legendary Studio. Let's get rid of those names. Let's add Skydance, which no one's ever heard of.

Nilay Patel (2:20)

Let's just start at the start. There was Paramount. There's Warner Brothers. The deal closes today. That is all going to be a new company called Skydance.

Is Skydance just a holding company? Are we as consumers meant to know that this thing exists?

Peter Kafka (2:33)

I think for the near term, you're still going to think of companies like Paramount, and Warner Brothers, and HBO as brands you know. But this is going to be one company. They're going to merge everything together. They're likely going to merge the streaming services, Paramount and HBO into a thing, not right away, but eventually. So I do think Skydance will be a name that consumers will probably know at some point.

Nilay Patel (2:58)

I just have to ask, what are the chances that HBO Max will be rebranded yet again into Skydance?

Peter Kafka (3:03)

There's probably going to be some branding stuff, not again in the near term. There's actually some, because this is still a cable TV company, there's actually some limits on what these guys can do with their brands and their services in the near term.

And they won't come out and say, we're going to mush this stuff together. But there's likely to be one mega streaming service, and maybe you can get HBO separately, or maybe you can only get HBO or only Paramount. But it's going to be one thing, and one movie studio, and it's all going to get mushed together. And it's all going to be run by David Ellison.

Nilay Patel (3:35)

David Ellison is just the latest to believe that he can buy Warner Bros and make something good happen. I have joked many times on the show that maybe the only antitrust policy this country needs is to make it legal to buy Warner Bros. And that would just solve a lot of problems. Why does he think he will be successful?