The Paramount Skydance & Warner Bros. Merger Saga Continues

SPEAKER_1 (0:00)

Welcome back to Next Street Investing. It's time to welcome in our next guest. It's James Czerniawski, the head of Emerging Tech at the Consumer Choice Center. Here to discuss some streaming with us. James, good to see you again. Happy Friday. I gotta start with this Paramount Warner Bros. deal. It can be kind of a lot to keep track of, but I believe the latest is, they're starting to get some regulatory approvals, but still hung up in the courts. Am I on the right track?

James Czerniawski (0:26)

Absolutely, yes. So basically the latest news here is that the FTC did grant them an exemption to allow for foreign investors to help Paramount in its bid to acquire Warner Bros. Discovery. So now they can have up to 50 percent of foreign investors going and helping them in that acquisition process. It's worth noting that none of those shares that those foreign investors have are voting shares. They cannot go and make any decisions when it comes to content or how the company is run, etc.

Literally, it is just a pure investment for them. So notably, as has been part of the conversation, we've had Middle Eastern sovereign-based wealth funds that have been interested in investing in this opportunity, as well as some other individuals. So they're allowed to have up to 20 percent individually. But ultimately, that was a good hurdle for them. However, that being said, in the meantime, the company still does go and face a challenge from 11 states to block the merger, more broadly speaking. That has a trial date that has been set for March of 2027

Basically, what we saw happen there is that they made a filing in that case to have the states put up a bond of $1.8 billion to go and basically justify their attempt to block this merger because the DOJ and the FTC had no issues with it and broader international regulators had no interest in it. So if they're not blocking it and the states are trying to move forward here, they basically want to go and make the states put their money where their mouth is. The DOJ went and put in a filing to support that motion from Paramount, more broadly speaking. But there's going to be an opportunity here in October for there to be concessions that could possibly go in and give them the off ramp that's much needed for the states.

SPEAKER_1 (2:05)

Hey, you made some sense of it for us. It can be complex. I know it's moving, but it seems like we're waiting for now. We'll see what happens next. But I appreciate it. I hope you have a wonderful weekend. James, always a pleasure. James Czerniawski, Head of Emerging Tech at Consumer Choice Center with some thoughts and the latest on Paramount and Warner Bros.