Warner Bros. Reopens Talks as Paramount Signals Higher Bid

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1:27IBM. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. 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, on media news, Warner Brothers Discovery has agreed to reopen negotiations with Paramount Skydance after Paramount proposed raising its bid and sweetened other terms of its offer, setting the stage for a renewed showdown with Netflix.

2:18This according to a statement on Tuesday. This wasn't news to any of you, though, because you all saw Lucas Shaw and Michelle F. Davis' scoop on Sunday when they exclusively reported that Warner Brothers was weighing reopening negotiations. And working over the weekend. With Paramount. Lucas Shaw is managing editor for media entertainment for Bloomberg News. Michelle Davis is a Bloomberg News senior M &A reporter. Lucas is in L.A. Michelle is here in our Bloomberg Interactive Brokers studio. Michelle, I want to start with you. The deal, the Netflix versus the Paramount deal. These are not apples to apples.

2:49It's apples and oranges. What is different, though, about Paramount Skydance's deal this time versus, you know, a few weeks ago? Yeah, I mean, and this is the moment we've kind of all been waiting for because, of course, Paramount has been saying for months, you know, 30 wasn't our best and final offer. And what's really different, the big news that came out this morning was that it came out that Paramount's banker basically called Warner Brothers and said, hey, if you guys engage with us, we will offer at least$31 per share. This was after last week Paramount had made some concessions that the Warner Brothers board had been asking for.

3:24And so now, during the next seven days, it's basically the time for Paramount to show whatever its best and final is. Warner Brothers has said, you know, put your best foot forward. This is going to, you know, put up or shut up, basically. And so we'll see if, you know, what Paramount comes up with. So now the ball is in the court of Netflix? The ball is in Paramount's court right now. So right now, Warner Brothers will be talking to Paramount to clarify the terms of its latest offer. Basically, they want whatever Paramount has said in writing. If the board determines that this is a superior offer, then Netflix will have a chance to match it.

3:55And remember, as the incumbent, Netflix only has to match or tie whatever Paramount has put on the table. Because they're not apples to apples, that means it doesn't technically have to be the same number. The board will have to weigh, you know, if they are on equal footing. And that would put Netflix in the lead again. Hey, Lucas Shaw, come on in here. You're joining us from L.A. You've been following this deal, you know, since before the beginning. Is this a start of a new bidding war? That's what Warner Brothers Discovery shareholders are hoping for, right? I think Michelle talked about this a little bit.

4:24There's been a desire and a thought that Paramount would go higher, that they are backed by the Ellison family, they have hundreds of billions of dollars, and they can spend even more. And it feels inevitable that Paramount will offer more money and then it will be up to Netflix whether it wants to meet that or not. So I think the price is certainly going up. But I don't know if it's going to be a frenzied bidding war, right? Netflix shareholders certainly don't want to see a crazy bidding war. And even though Paramount shareholders don't ultimately have a say, except for the Ellisons, I don't think they want to see the company get even more levered and indebted than it already is and will be if it does this deal.

5:00Who's Hollywood rooting for, Lucas? Hollywood's pretty split. You know, I think initially the shock of the Netflix deal made people against it. You know, Netflix has had a big impact on how this business works, some for good, some for bad. The more time goes by, I think people are divided, right? Folks who really care about movie theaters still tend to be against the Netflix deal. They don't really believe Netflix when they say they're going to put movies in theaters. People who are perhaps liberal-leaning politically, which is a lot of Hollywood, are very worried about the Allison's impact on CBS News.

5:33And then in terms of jobs, it's sort of hard to say, right? Paramount would be way more likely to fire people right away. They've touted billions of dollars in synergies. but you know Netflix could have a more negative impact on the larger ecosystem. Netflix is certainly arguing that they're better for Hollywood Paramount saying the same. I think people don't really know how to feel. Well on that Netflix did issue a statement and they said while we are confident that our transaction provides superior value and certainty we recognize the ongoing distraction for Warner Brothers Discovery stockholders and the broader entertainment industry caused by Paramount Sky Skydance's antics and this was a statement that they put out.

6:12They go on to say this does not change the fact that we have the only signed board recommended agreement with Warner Brothers Discovery and ours is the only certain path to delivering value to Warner Brothers Discovery stockholders. They're right, right? Well Michelle, come on in on that. I mean is$31 a share is this best and final coming from Paramount Skydance? I think that's the big question. The Paramount banker that had reached out to Warner Brothers said we would offer, or Paramount would offer at least$31 per share. But there's also some documentation issues that still need to be worked through.

6:51Warner Brothers wants to be allowed to operate kind of freely in the interim period before this deal closes. And Paramount has held back on some things that Warner Brothers has wanted. in an ideal scenario, Paramount would just basically take the Netflix agreement, erase Netflix's name and put its own name there and, you know, a higher share price. And that would be enough to get the deal done. It might not be as easy as doing that. But they want the linear networks too. They do. But there are, you know, certain terms that are maybe friendlier to Warner Brothers that Paramount has been dragging its heels on.

7:23Lucas, is this about what David Zaslav wants ultimately for his company? Or is it just about getting the best financial deal? which, to be fair, would also be good for David Zaslav. Yes, but also as someone who's selling their company, they do want to get the best deal for their shareholders, I would assume. Look, David Zaslav obviously has a lot of influence on the process. He's the CEO of the company. He's on the board. A lot of people on the board know and like him. But I don't think he gets to make the final decision here, right? You have a number of very experienced board members who've been through a lot of deals.

7:58They added a few people to their board over the last year or two, essentially in anticipation of this moment. I think they're looking at what's best for the company and what's best for shareholders. It's pretty clear that the board has had a preference for the kind of Netflix's offer and also how Netflix has gone about the process. I don't think that should be a huge surprise. Netflix is a much larger and more valuable company and has been run better over the last decade than Paramount has. So if you're saying, who do I trust to kind of handle these assets, that would be Netflix. And so there's an aspect of what they're doing here where they're basically saying, Paramount, blow us away, because we know if you only go up a dollar or two, Netflix is probably going to meet you.

8:40But if you go up five dollars, Netflix probably can't and we got to take it. All right. Lucas Shaw. So appreciate it. Michelle Davis as well. The latest. Check it out on the Bloomberg. They told us to expect change. They warned us about the transition. But honestly, they forgot the best part. This is the chapter where we finally focus on us. LifeMD delivers expert menopause and midlife care right from your home. From hormone health to holistic wellness, LifeMD helps you feel your best for the best years of your life. LifeMD, it's just getting good. Visit LifeMD.com slash goodlife. Support for the show comes from Public.

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10:16public.com slash disclosures. Hello, hello. I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive.

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11:36you're listening to the bloomberg business week daily podcast catch us live weekday afternoons from 2 to 5 p.m eastern listen on apple carplay and android auto with the bloomberg business app or watch us live on youtube when we look at the markets we are also keeping a watch on apple because we are seeing that stock move in today's session the share uh price is up about four percent here so quite a spike here happening on a bloomberg exclusive this the company is accelerating development of three new wearable devices as part of a shift toward artificial intelligence powered hardware it's a category tim also being pursued by open ai meta platforms i mean everybody's kind of moving into this space i want to bring in mark german he's in our la bureau he's bloomberg news managing editor for global consumer tech uh mark congratulations on yet another scoop glasses a pendant, and camera AirPods.

12:28What did you learn? Yeah, so Apple's been working on these devices for quite a while, and the strategy is to hit consumers wherever they want their AI, whether it's on their face, whether it's on their body, whether it's around their neck, whether it's in their ears, creating different devices for different features with different types of cameras. You can see there's different tiers here. Obviously, the pendant is something entry level. It's an accessory, eyes and ears to the phone. The AirPods is something more substantial, right, with that audio gear in there. And then there's the high end of the AI strategy being the smart glasses with the high resolution camera, a computer vision camera, all sorts of functionality to really augment without a display your real world experience using AI.

13:12Hey, so all built around the Siri digital assistant. We all know our love and dislikes. Love? I know, I know. I'm being a little obnoxious. Okay. Our frustration with Siri. Don't they have to get Siri right first, Mark? That's exactly right. All of these products hinge on them being able to bring the new Siri to market and it actually being, to your point, effective. They were supposed to launch it actually this month by way of introducing it, and they were supposed to release it to consumers sometime next month as part of iOS 26.4. But I reported last week they had hit a bunch of snags and issues, and that Siri will not be arriving this spring.

13:52The personalized Siri will be arriving later this year in addition to some of the other Siri features. And so none of this launches until those launch. And so we'll see what happens, but it all hinges on that. So I want to drill into some of these devices that you've been reporting on and that you have reported on in this piece. The pendant, the eyes and ears connected to the iPhone. What exactly does an Apple pendant do? And look, we should note, it's no guarantee that all of these are going to come to market, right? Yeah, I do think these are ultimately all going to launch. But like I was saying, they have worked on other wearables with cameras that they canceled.

14:30Last May, they canceled an Apple Watch, an Apple Watch Ultra with a camera. So we'll see what happens. But this is something that they're seriously working on. Tim Cook held an all-hands meeting with employees earlier this month where he said the company is investing heavily in new stuff. He did acknowledge that AI devices are the future. and he said the world is moving fast. And so he hinted that these were coming. Hey, Mark, I want to look at ADRs of Essilor Luxottica. This is the parent company of many glasses brands out there. They work very closely with meta platforms. You've been outspoken about how well the meta platforms glasses work.

15:07If Apple is indeed competing with Essilor Luxottica, and after your piece came out, we saw shares take a dive on the day today. if indeed Apple is working on a competitor to Meta's glasses, what can you tell us about what would differentiate them? What would be the Apple experience? How they'd be different than what's out there on the market? Yeah, I mean, the main two things are camera technology and build quality. That's according to people working on the glasses. They believe that the build quality using things like acrylic and other higher-end non-plastic-y materials are going to make their glasses a bit higher-end and more premium than what Meta is offering.

15:44Obviously, Meta works with a slew of different brands. They've got Oakley, they've got Ray-Ban, and obviously Prada is the biggest fashion-oriented brand under the X-Rexotica umbrella, and so you'll see Prada versions of the Meta Glasses probably sometime this year. But definitely, that's what they're trying to differentiate on. The other is camera technology. The Meta Glasses, they have one camera that can move between computer vision and for photo and video. Apple has a dedicated photo-video camera and a dedicated computer vision camera, and their belief is by having both cameras, they can get a better quality on each of those factors.

16:18Hey, Mark, what about the timing here? I mean, this is a pretty deep dive, and I know you've got your sources and all that good stuff and good reads on the company, but it sounds like there has been a lot going on behind the scenes when it comes to how they're thinking about the AI world and what it means for hardware. And it sounds like some of that is starting to maybe early, but pay off in terms of they've got specifics here. Well, nothing's going to start paying off until Siri is ready. Like I said, the releases of this hardware will all hinge on them having a working voice assistant. And the hope is with this Gemini partnership, they will have one.

16:51And I'm pretty confident they will have one. I think the way that they're going to revamp iOS in the fall with their new Campo voice assistant, that's the code name for this new version of Siri, and integrating the Gemini models throughout the system, I think it's going to be fairly effective. So they need to get that done. In terms of the timing, you know, for a while now, they have been earmarking an introduction of the smart glasses at the tail end of this year, with production beginning at the very end of this year. I'm told production is still planned for December. That's beginning of production with a release sometime in 2027, so next year.

17:24The AirPods could be released as early as this year, but of course, that hinges as well on the Gemini partnership and Siri working out. And the pendant is likely an end of 27 thing at the earliest. Hey, Mark, just last question. Analysts, investors, they want to know the next killer product from Apple. And I think some people thought it would be a car years ago. That's obviously not happening. Some people thought it could be Vision Pro. That's obviously not happening. at the end of the day, as your piece notes, all of this still sort of hinges around the Apple iPhone ecosystem, iOS. These are still all tertiary products, right?

18:03These are no sort of like freestanding single product that is like the next killer piece of hardware, right? Well, I think it's the family of AI wearables that is the sort of next big thing. It's not one single item, but it is things. It is a group of things. And so you'll see AI wearables be one new category, and then you'll see home devices be another big category from Apple. So those are the next two big categories, with the through line being AI and them being able to launch neither until the AI works. All right. Great stuff, as always. Another exclusive from our Mark Gurman. Mark, thank you so much for jumping on with us and laying this out.

18:40Mark Gurman, Managing Editor for Global Consumer Tech at Bloomberg News, joining us from the Bloomberg News Bureau in Los Angeles. This is the Bloomberg Business Week Daily Podcast. Listen live each weekday starting at 2 p.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg 1130. I got to say, in Jeffrey Epstein's world, few billionaires loom as large as Leon Black. Certainly very well known to the Bloomberg audience. The Justice Department's largest release yet of the Epstein file shows he was Leon Black's stealthy do-it-all fixer.

19:21And I mean, what's interesting is our team is going through documents. You realize how close Epstein was with a lot of very influential people. Hey, part of that team includes Max Abelson. He's Bloomberg News finance reporter. He joins us here in the Bloomberg Interactive Brokers studio. We're going to get to what you found in your story, what you found going through this latest batch of files, which at this point was two weeks ago, but the stories are still coming out. I mean, how do you do something like this? How do you take on a trove like this and then find the stories and tease them out?

19:59I mean, this is kind of unlike anything that journalists have had to do in the modern era. That's such a generous question. Thank you for asking that. Well, I'll tell you, I'll give you the real answer. The real answer, first of all, is teamwork. I think of this Epstein work, at least for me personally, is kind of bifurcated into two different eras. Last year, I worked with an incredible team, people like Harry Wilson and our colleagues Ava and Jason and Lauren Etter, and it goes on and on. And we had access to, I mean, it was so many emails to us. It was like 18 ,000, more than 18 ,000 emails.

20:35And we spent months together digging and, you know, thinking like, okay, geez, you understand the law, so you dig into lawyers, you know, you understand the investments, you look into that, or money laundering, you look into that. We split it up, we worked together. It was a very, honestly, it was quite a moving experience. It was also extremely grim, as you might imagine. But 18 ,000, I mean, that's a pimple. That's nothing compared to what's been happening in these last few weeks. Three and a half million files. I mean, I want to be my professional self and make sense of it for you two and for viewers and listeners.

21:11But just to be honest, it is hard to make sense of it. The scale alone, just how much material there is here to sort of meet these documents where they are and to not either be dismissive of them and be like, you know, well, what does it matter? It's so much. Or rather, I should say, to not be overwhelmed by them, and then to not sort of wave our arms and get overly excited about things that aren't really there. So we're splitting it up. I worked with Laura Benitez for the story about Leon Black, David Shearer, our editor. And what we did is we clicked one after another. And we're trying to read them all, trying to put them into chronological order, trying to understand them, trying to understand what they mean, and trying to understand these relationships.

21:55Because not everything's in order, right? And there's redacted stuff, and you've got to kind of sometimes piece things together, correct? I would be so happy if it were in order. And you know what? I feel very proud of working in this newsroom with journalists who I admire and who I'm fond of. But I want to give a shout out not just to our colleagues across Wall Street journalism who've been looking into Epstein and Leon Black now for years or at least for months, if not years and years in some cases. But in this case, you know, even just readers who are interested, people on Twitter, people who are digging in, it seems, it's like, it reminds me of like being in school.

22:30It's like, it's like a large group project. Everyone's kind of throwing in. People are looking and it's fun to be digging alongside what feels like kind of a collective effort. So let's dig in. Let's talk about that digging. So I just want to throw out some numbers here. Leon Black has acknowledged paying Jeffrey Epstein $158 million over the year, saying it was for advice on estate and tax planning. The new release documents, though, that you and the team found said it was from much more than just estate and tax planning. What else did he do? Well, just to be really, really, really specific, the way I'm going to put it is going to be slightly different from that, which is the way that I'm going to say it is Leon Black's story up until now has been like something along the lines of, I don't want to overgeneralize for him, but it's been something along the lines of like, look, he gave me tax advice and his tax advice was good and it was worth it.

23:22And there's some other things on the side, things like estate planning. And what our story is about, and I hope viewers and listeners will go check out our story called The Leon Black Files. What it's about is some really concrete things. One is an angry mistress. One is an angry mistress of Leon Black's. Or to be fair, I think at the time of these emails, she was a former mistress. and Epstein, who by then was a sex offender, he helped Black kind of manage the situation. We can talk about in what ways. And then let's think about sort of off to the side. There are these IRS questions about gifts to another woman.

24:04This is going to be a second woman. And the way that Epstein was a fixer for this man and watching him work, of course, the best we can do is watching his send and receipt emails. But it was quite an experience for me. I've been at this now, writing about Wall Street, writing about money and power, here at Bloomberg News for 15 years, maybe more now. But I can't remember the last time I had the feeling of sort of watching history unfold before me, or watching a movie. I mean, I don't want to make it sound fun or romanticize it because it's as grim and difficult work. But it really was amazing to see sort of email by email, month by month, year by year, to see how Epstein just goes to work trying to fix the dark secrets of a very important billionaire.

24:56You know what always blows me away from just the various things I've been reading here at Bloomberg and elsewhere when it comes to Jeffrey Epstein is just the level of intimacy that he has with certainly people that we cover so much at Bloomberg, like these titans of finance. I mean, Apollo is kind of an iconic firm in many ways and very revered and still is on Wall Street. And Leon Black created this firm. And so whether it's Epstein helping with family portraits, like that stuck out. That's a level, like I understand maybe the estate planning because that's kind of what Epstein was doing. But the involvement in even very personal things is kind of interesting, that level of a relationship.