Paramount-Warner Bros. Judge Pauses Deal With Serious Issues

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1:48With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org. Bloomberg Audio Studios, podcasts, radio, news. This is Bloomberg Business Week Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus, global business, finance and tech news as it happens. The Bloomberg Businessweek Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. Well, certainly top of mind today. Federal judge temporarily paused Paramount Skydance's$110 billion takeover of Warner Brothers Discovery.

2:39The judge in Oakland, California ordering the companies to hold off on consummating the deal for 14 days. Paramount Warner Brothers hope to close, though, Tim, as soon as July 22nd. Yeah, shares dipped initially. Warner Brothers Discovery shares are still lower, down 3.8%. Paramount Skydance shares, they were down earlier in the session as much as 2%, but down now. A little bit higher. A little bit higher right now. Just a tad. All right, so let's get to it. What do we need to know? Why is this happening now? That's what makes me wonder. Bloomberg News Senior Editor and Entertainment team leader, Chris Paul Mayer, usually on the West Coast, in the heart of Hollywood, out there in L.A., joining us here, as we said, in New York City.

3:19What do we know about this, and why is this happening now? Well, just to put a little context here, they were very close to closing this. Justice Department approved the merger. EU is expected to announce something on Wednesday. They're going to have a deal and greenlight it. So Paramount was hoping they could actually close this week. And so the attorneys general who've been sort of threatening action finally did sue. And so now this is a potential problem because anything past September that Paramount doesn't close, they have to pay Warner Brothers shareholders millions of dollars a day until they get it done, if they get it done.

3:56What's the whole – if they get – wait, wait. If they get it done, are we really saying that? Well, I think the market's reaction indicates that something will happen, that some sort of agreement will be reached. I think that might be a face-saving move for the attorneys general, certainly for Paramount as well. What's the sticking point here? Well, you know, there's a lot of people, particularly in Hollywood, who really object to this. I mean, we're combining two, you know, legendary movie studios, two giant operators of cable TV channels, two news divisions, CBS and CNN, two giant streaming services.

4:27So this is kind of this. If this isn't antitrust, I mean, you know, what is right? I mean, this is a major consolidation. Now you get into the question of how much market share do they have. And this is one of the things that I think people reacted. We're a little surprised that the suit wasn't stronger. They really decided to focus on the movie business. And they couldn't even really even get a 30 % market share for the combined studios. So I think there was a feeling that the case was not as strong as it might have been. And this is kind of like almost a relief for investors. So could any chance Netflix come in at this point, Chris?

5:05And would this be a deal that would more likely pass regulatory muster? Well, we can go on and on about Netflix right now. They're sort of in a lot of trouble. I mean, their stock really began to head south last year when they initially were interested in Warner Brothers. And they haven't really overcome this idea that what were they thinking, you know. So I can't see them coming back at this point. So this deal does get done? I mean, we know they want to do it as soon as July 22nd. Is that likely to happen, or is it just maybe a case of the law? Definitely not July 22nd. So I think the next is a hearing to determine whether the injunction that's just a temporary one now goes at least through the end of trial.

5:41Now, remember, the attorneys general are asking for a trial date next year. So, you know, that's potential trouble for Paramount. And they're going to fight every step of this the way. They're going to fight the injunction. I think they're making Delverham, their chief legal officer, suggest it could go to the Supreme Court. But I mean, if it goes to the Supreme Court, is there, I don't know, it's hard to say with this Supreme Court, but is there sort of precedent for something like this? I mean, it's a challenge to actually answer that, given that we're in a different era than we've ever seen with media right now.

6:14And, you know, if you were describing this 10 years ago, I think there would be huge issues. But it's not like that anymore. And by the way, make it to him, who is the antitrust chief in the first Trump administration who argued that AT &T should not be able to buy Time Warner. And he lost that case. Of course, now he's in favor of Warner Brothers consolidation. But I think, you know, most to your point, the Trump administration is seen as pretty pro merger. We heard the FCC commissioner on our program here recently saying that he was talking about all the deals. You know, he's he's got some final say in the in the Warner Brothers deal as well.

6:47But, you know, this is. And he was at the UFC fight on the White House line. I know. All we could go on and on about all the relationships with Paramount and the Trump administration, for sure. It's a saving face, maybe even what it's all about, like you said, too. All right. Chris Palmieri, thank you so much. So excited to have you here. Bloomberg News Media and Entertainment Team lead Chris Palmieri joining us here in our Bloomberg studio. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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9:13This product is not intended to diagnose, treat, cure, or prevent any disease. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. As Carol mentioned, so notes a recent Bloomberg Big Take that we wanted to share with everyone with more Bloomberg Economics GeoEconomics analysts focusing on the Middle East. Dina Esfandiari with us from Geneva, Switzerland. Dina is the author of New Order in the Gulf, The Rise of the UAE, and co-author of Triple Axies, Iran's Relations with Russia and China.

9:48She holds a PhD in the War Studies Department at King's College in London. As we mentioned, the U.S. conducting a ninth straight day of airstrikes on Iran. Why, Dina, should we be focusing on the longer array of actions and conflict to tell the story of a changing Middle East? because this is a region that has been filled with turmoil for as long as I can remember and beyond that and the last two three years have only worsened the instability that the Middle East has seen as we outline in the piece after October 7th and the war that Israel led against Gaza everything began to change alliances were reshaped in the Middle East partnerships changed, new wars erupted, new violence erupted.

10:39And unfortunately, none of that looks like it's going to be resolved anytime soon. Why? Is it just because it's been in conflict, this region, for so long? Does the U.S. attack have some role? Like, why are we here at this moment in time, Dina? An understandable question. And honestly, I could probably write another PhD on the answer, but in order to shorten it, I think various factors. I think foreign players, including the United States and others like Russia and China, have played a role in it. I think players within the Middle East have done very little to improve their situation. I think within countries in the Middle East, governance has been a real issue, which at time exacerbates both domestic crises and regional crises.

11:28Honestly, I could go on. economic issues, the fact that many of these countries are exporters of oil, that they're rent dependent countries. None of these factors have helped. And the tensions that have erupted in the last few years, really, they've exacerbated these problems. And again, there is no path right now to resolving any of them. So it raises the question about the U.S. role in the Middle East right now and what exactly the endgame is for the United States. And, you know, far be it for me to ask you to get inside the president's head and give us a prediction there. But I think a lot of people question the idea of a clean and quick end to at least the U.S.

12:11involvement with Iran. Is that fair to say? Absolutely. U.S. war goals have been changing since the war with Iran erupted. Initially, it was about regime change. Then it turned into degrading the Islamic Republic's capabilities. Now it's become opening a strait that was open before the war broke out. So it's really unclear what President Trump's objectives in this conflict are. But I think for now, those objectives have become very limited and they are primarily focused on the straits. It needs to be open. It needs to not be under Iranian control. And that is exactly what the Iranians are contesting.

12:54But that was how things were before the end of February. That's right. But they signed an MOU, a ceasefire of sorts, where they promised to continue negotiations to resolve some of the issues that plagued their relations, including Iran's nuclear program. But they didn't even get that far because within a few weeks, both sides had a different interpretation of the implementation of the MOU. The Iranians thought that the US was acting in bad faith by not implementing it properly, by, for example, opening up an alternative route in the Strait of Hormuz close to the Omani shore. And the Iranians felt that this was going against the MOU.

13:39And so they went forward with ensuring that they would be able to establish a clear red line. And that red line was that the Strait of Hormuz belongs to Iran and Iran must control it. Dina, speaking of lines, you guys write in this story, Israel has become another fault line and the relationship between the Gulf states shifted from neutrality to hostile, according to Bloomberg economics. I mean, you know, you talk about alliances with Israel and others not. Where is Israel in all of this? And how much is are they? I don't you know, their role in kind of creating kind of where we are today? Well, I would argue three years into a regional war, almost three years into a regional war, Israel is much worse off than it was at the outset.

14:28Before October 7th, there was a wave of Arab normalizations occurring with Israel. The UAE and Bahrain had already normalized, and there was real talk of Saudi Arabia, the crown jewels of normalization, also establishing ties with Israel. Now, a few years later, that is absolutely off the table. Saudi Arabia, even if it wanted to, even if the crown prince wanted to go ahead with normalization with Israel, he wouldn't be able to do it simply because domestically it is so taboo right now. And that really speaks to how the region views Israel. The populations, Arab populations in the Middle East view Israel, but also some of the leadership of the Gulf Arab states who now see Israel as a threat equal to, if not superior to Iran, because it is enabled by the United States in a way that Iran just simply isn't.

15:21So what fixes this diplomacy, war, war to the bitter end or nothing? You know, I did in a silly mood or just, I don't know, thinking about, oh, my gosh, you know, reading the headlines this morning, a poll on X. And I'm like, does it just kind of keep going on for a little bit longer? Does the war end soon? Or is it the forever war? Like, I don't know. Honestly, I think right now we are on track towards this becoming the beginning of another forever war. Both sides are being very stubborn in terms of ensuring the respect of their red lines in terms of shaping the negotiations. So they don't want to return to the negotiating table until those red lines have been established and the other side understands them.

16:09And neither side seems to want to de-escalate. And of course, the only way to end this, the only way to end this really is through diplomacy. More war will not resolve anything. It may destroy infrastructure. It may destroy capabilities. But at the end of the day, it will only give more bitterness, more anger amongst the leadership of the countries that are facing this kind of war and ensure that they rebuild And this all restarts again. And not scientific. I'm looking at my ex-poll. It was one day, but I respect everybody who responded. It was U.S. and Iran over soon, 13 percent continues to take longer, 42 percent forever war, 45 percent.

16:48So, Dina, they agree with you. Dina, what happened to the Iranians who in February the president thought would would rise up and would sort of lead a new government or at least show that there was some sort of resistance movement that that would would help to make a transition toward a country that at least this this United States government wants to see? Well, they've been distracted. They've been distracted by facing incoming bombs and missiles for the better part of the last two, three months that will ensure that the Iranian population doesn't focus on the shortcomings of their government, but rather on the fact that they are facing war and they are facing a dire economic situation and unemployment and hopelessness.

17:39So their attention has been refocused on something else. The other thing that's happened, and this is pretty normal for a wartime situation, is that war has allowed the Islamic Republic's leadership to regain control of the streets. Under the guise of war, they have reestablished checkpoints throughout the country. They have reestablished some control, ensuring that people no longer come out and demonstrate. So expressions of discontent have really been quelled, which means that essentially what this war did was by the government time. I'm looking forward to your next PhD paper because I am curious to see where this all goes.

18:21It's just pretty amazing. And just even also to see shifting U.S. sentiment when it comes to something like Israel. There's a lot of great statistics and research in this piece. Dina, we knew we wanted to talk to you, so thank you so much. We know it's later over there in Geneva, but thank you so much. Always, always appreciate your time. That, of course, is Dina Esfendiari. She is a geoeconomics analyst. She focuses specifically on the Middle East, so highly recommend to you check out this story by our team. It was a Bloomberg big take, and it is on the Bloomberg and at Bloomberg.com. She, of course, is with the Bloomberg economics team joining us from Geneva.

18:59Stay with us. More from Bloomberg Business Week Daily coming up after this.

19:06Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve of the workflow and your agent handles the rest. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined.

19:44An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API. Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures. If your best finance people are doing expense reports, chasing receipts, or spending time on month-end clothes, it's time to get Brex AF, a Gentic finance that eliminates that work before it starts.

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21:02You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Let's get to it with Isabelle Lee. She's Bloomberg News, Cross Asset Reporter. She joins us here in the Bloomberg Interactive Broker Studio. Why can't you buy... First of all, welcome. Great story. Congratulations. Thank you. Big compliments from you both. Well, we, you know, great stuff. Why can't you buy peptides with your credit card? I think, I mean, obviously if it's the accredited ones, you can.

21:37but then if it's like you mean a glp1 coming from like eli lily i don't even want to say legit but if it's like you know those kind of things you can well let's say maybe you could say if it's prescribed by a doctor it goes through the typical channels of yes you can use your typical channels you can use your so which peptides are we talking about here i think it's everything else other than if you know it then you can buy it with a credit card if you don't and if you can't pronounce it and if you can't read it you probably can't and i want to make a distinction between gray market and black market.

22:06Because when I was talking to my editors, they were like, black market? So gray market involves legal sale of authentic branded goods, and black market is illegal and prohibited. So this is gray market. Gray market. Okay. But these are unproven, and they're of unknown origin in some cases too, right? Yes, but I guess they're not yet explicitly banned. But in some cases, like, okay, you talk to this guy, Zach. He's 49 years old. He wants to use a peptide that he's told is an experimental weight loss drug. So essentially Eli Lilly is working on this thing. I think so. But he says like, I can get it already if I buy it from this other.

22:43Yes, and he can get it cheaper. I mean, the cost was$240 for roughly a year supply compared with$300 a month for something like if you buy it from a US reseller. So cost is a big thing also. That's why people buy from Timu and not Amazon. I mean, it's not - Do you want your Timu peptides? Wait, wait, but listen, I started to, Safe, I mean, that is the question. I started to tell Tim that there were a few people I knew who, do you remember Latisse, like the eyelash stuff? Yes. Super expensive, worked. But there was one you could buy online for like a fraction of the cost that was said to be the same stuff made in an emerging economy that will remain nameless India.

23:28And, you know, you could do that. I get the... But you don't, you, but we didn't. I get the knockoff toothbrush heads that are like the Amazon basics toothbrush heads. Oh, maybe I should look into that. For my electric toothbrush because they're like a tenth of the price. So what are you going to say? I'm not injecting that into my body. No, with this you were putting in your eye, essentially. But then it could go to your eyeball. Exactly. No, no, no. So it was a risk. Okay. But I'm not doing that. So how many people are doing this thing? I mean, so it's hard to tell. So we had to look for companies who were tracking it.

23:55So Chainalysis, for example, they tracked this and they looked at on-chain it. And you're talking specifically about the crypto side of this. So people are using the Bitcoin to buy this. Bitcoin to buy peptides from Chinese vendors. They've seen a 700 % year over year increase, which is a lot because I feel like now everyone talks about peptides, right? Like podcaster Jennifer Aniston said in 2023 that she was using peptides and that was three years ago. And we also quoted another one, TRM Labs. Wait, so GLP-1 is a peptide? It is. But these are other types of peptides. What's the difference? You really wouldn't say I'm taking peptide if you're taking GLP-1.

24:29You wouldn't. you wouldn't okay you're taking we govi you're taking ozampic technically they're peptides but you wouldn't say i'm taking but these drugs do the same thing or do you can get peptides that do weight loss but you can also get peptides that are supposed to improve muscle mass that are supposed to improve sleeping that are okay yeah okay sign me up i mean i'm just kidding i'm being facetious so okay so but it's happening it's happening and then the interest is just so So this is two stories. First, there's a peptide craze. And we went to an event. And it's Peptide 101. It went on for one hour.

25:02And it was really the basics of peptides. And I actually felt so impressed that people were there. And I was like, oh. So the brain rot that so many people are alluding to isn't happening. Because these are people who actively paid and attended to go and learn about something. And I have respect for that. And the whole talk was just about peptide. Nothing in relation to crypto. The crypto only comes in because a lot of these peptides are sold in the gray market. because they're maybe not the, I don't even want to say legitimate. What word did we use earlier? They're not the prescribed or traditional channels.