Paramount Muscles Out Netflix for Warner Control

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Daniel Bach (0:33)

Pakistan bombs Afghanistan following a series of cross-border attacks. Plus Paramount wins the bidding war for Warner Brothers as Netflix bows out.

Joe Flint (0:43)

Netflix dropped out after Paramount had raised its bid to a point where Netflix said uncle.

Daniel Bach (0:49)

And Anthropic rejects a Pentagon ultimatum to loosen its AI guardrails. It's Friday, February 27th. I'm Daniel Bach for the Wall Street Journal filling in for Luke Vargas. And here's the AM Edition of What's News, the top headlines and business stories moving your world today.

Pakistan has declared open war with Afghanistan following a series of cross-border attacks. Pakistan's defense minister said the country's patience had run out after years of simmering conflict. The country's security forces say they've responded in full force, striking Taliban hideouts and hitting targets in the Afghan capital, Kabul. According to the Taliban government, there were no casualties. Journal correspondent Sune Rasmussen has spent years covering the war in Afghanistan. Sune, just explain to us what's happening this morning.

Sune Rasmussen (1:39)

Yes, Pakistan has now officially declared war in Afghanistan after some cross-border attacks from the Afghan side of the border. This comes in retaliation. The Taliban have said to some attacks earlier this month by the Pakistani security forces inside Afghanistan, which the United Nations say killed about a dozen civilians. But this is part of sort of a longer conflict between the two countries, between Pakistan and the Afghan Taliban government. This can be a little bit confusing. Pakistan says it's attacked these targets inside Afghanistan to punish what's known as the Pakistani Taliban or the TTP.

And there is a distinction here between the Afghan Taliban and the Pakistani Taliban. They are sort of ideologically aligned, but they have different nationalistic purposes. And what Pakistan is doing now is going after the Pakistani Taliban, which it says is trying to wage war on the government in Islamabad. And to add to the confusion, the Afghan Taliban used to have a safe haven in Pakistan. In fact, it was only with Pakistan's support that the Afghan Taliban were able to wage a 20-year war against US and other international forces and the U.S.-backed government in Kabul until they took control in 2021 And that relationship between Pakistan and the Afghan Taliban has now clearly broken down. And that can have wide-ranging consequences for the broader region.

Daniel Bach (3:04)

And what could be the impact of this conflict? Can you flesh out some of those regional consequences for us, Sune?

Sune Rasmussen (3:09)

Yeah, this can evolve into quite a difficult situation for the Afghan Taliban. Afghanistan is quite isolated, has been since the Taliban took control in 2021 Very few international countries deal diplomatically with the Taliban. The Taliban are under severe international sanctions. And in fact, 40% of Afghan exports go to Pakistan. So Pakistan is not just a neighboring country, but is also a crucial trading partner. So that being said, more long-term conflict between Afghanistan and Pakistan can certainly destabilize South Asia. Both countries border India. Both countries also have relationships with China. So there are larger regional players that have an interest in maintaining some level of stability between these two countries.

Daniel Bach (3:55)

Yeah, a Chinese Foreign Ministry spokesperson this morning saying Beijing had been mediating between Pakistan and Afghanistan and would now try to cool the situation. Undoubtedly a developing story we will continue to watch sooner. Thanks for the update.

Sune Rasmussen (4:09)

You're welcome.

Daniel Bach (4:13)

In a Hollywood plot twist, the bidding war for Warner Bros. Discovery is over.

Joe Flint (4:18)

In a stunning turn of events, Paramount emerged victorious in the bidding war for Warner Bros. Discovery.

Daniel Bach (4:24)

That's media and entertainment reporter Joe Flint.

Joe Flint (4:26)

The Warner board, which had long favored Netflix, could no longer refuse Paramount's overtures when they raised their share price from $30 to $31 per share for Warner and offered several other concessions.

Daniel Bach (4:39)

Pending regulatory approval, Paramount is sent to take control of the entertainment company, home to the likes of HBO, CNN and franchises like Superman and Harry Potter. And despite bowing out of the Warner acquisition, Netflix shares surged 10% in off-hours trading. Wall Street had initially punished Netflix for the deal, wiping $170 billion off its market value since last September.