Warner Bros. Begins Exclusive Talks With Netflix; US Lobbies to Block EU Loan Plan for Ukraine

0:00Hello, I'm Stephen Carroll. I'm in Brussels where many of Europe's biggest decisions get made. And I'm Caroline Hepker in London with the hosts of the Bloomberg Daybreak Europe podcast. We're up early every weekday keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled and so you know what actually matters as the day gets going. From Brussels, I'm following the politics, policy and the people shaping the European Union right now. And from London, I'm looking at what all that means for markets, money and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break So whether it's geopolitics, energy, tech or markets, you're hearing it while it happens It's smart, calm and to the point And it fits into your morning You can find new episodes of the Bloomberg Daybreak Europe podcast by 7am in Dublin or 8am in Brussels, Berlin and Paris On Apple, Spotify, YouTube or wherever you get your podcasts

1:02Bloomberg Audio Studios, podcasts, radio, news. Good morning, I'm Nathan Hager. And I'm Lisa Mateo. Here are the top stories we're following today. Lisa, we begin with exclusive Bloomberg News reporting on what could be one of the biggest media deals in history. Sources tell us Warner Brothers Discovery has entered exclusive negotiations to sell its film and TV studios and HBO Max streaming service to Netflix. The streaming giant is offering a$5 billion breakup fee if regulators don't approve the deal. Manuel Baigori is a deals reporter for Bloomberg. It would be definitely the biggest ever deal by Netflix.

1:44They've never done a deal of this magnitude. And it will also be very, very consequential for competitors, take Paramount, Walt Disney and others that are also growing in this field. So surprising also to see a potential$5 billion breakup fee. That is quite remarkable and perhaps one of the reasons why Netflix seems to be, according to our sources, pulling ahead of the game here. And Bloomberg's Manuel Baigori adds the two companies could announce a deal in as soon as the coming days. Breaking news in geopolitics this morning, Nathan. The U.S. lobbied several countries in the European Union in an effort to block EU plans to use frozen Russian central bank assets to back a massive loan to Ukraine.

2:31That's according to European diplomats that are familiar with the matter. We get more from Bloomberg's Stephen Carroll in Brussels. Yeah, well, this is our reporting telling us that the US officials have been arguing to individual countries in the European Union that the frozen Russian assets shouldn't be used to support Ukraine. This is a key plan that's been under negotiation in the EU for some time now. Earlier this week, we had the proposal from the EU, which was meant to be either using these frozen Russian assets, something they haven't been able to get agreement with among member states, or to use a loan backed by the EU's own resources to try and support Ukraine.

3:06Instead, knowing full well that would be politically very difficult to get agreement on as well. It was meant to exert pressure on Belgium, one of the key holdout countries, for the use of those frozen Russian assets. Bloomberg Steven Carroll notes that the discussions come at a critical time for Ukraine with the U.S. pressuring Kiev to agree to a potentially lopsided peace deal with Russia. Lisa, this comes as India's Prime Minister Narendra Modi and Russian President Vladimir Putin hold a bilateral meeting in New Delhi. The two leaders are looking to deepen their economic cooperation in the face of pressure from President Trump.

3:40Putin's making his first trip to India since Russia's full-scale invasion of Ukraine to showcase the long-standing partnership dating back to the Cold War. Ties with India have centered on defense, but Modi and Putin want to broaden cooperation to include deeper trade, migration, and economic links. Turning to Washington now, Nathan, President Trump standing by Defense Secretary Pete Hegseth after a string of recent controversies, among them a second strike on a suspected drug running boat in the Caribbean that killed survivors of the initial attack. The admiral who gave the order, Frank Bradley, was on Capitol Hill yesterday telling lawmakers he was not ordered to kill everyone on board.

4:17Republican Senate Intelligence Chairman Tom Cotton spoke after the classified briefing. I saw two survivors trying to flip a boat, loaded with drugs, down for the United States, back over so they could stay in the fight. But Adam Smith, the top Democrat on the House Armed Services Committee, says he's not convinced those survivors still posed a threat. Two people without their shirts on, on top of the bow of a capsized boat. There's a tiny little portion of the boat that was above the water. And they were there, just there. Along with the strike order, a Pentagon inspector general's report found Defense Secretary Hegseth could have compromised sensitive information by using his personal cell phone in a signal chat about Yemen attack plans.

5:01Well, elsewhere in the nation's capital, Lisa, a divided Supreme Court has cleared Texas to use a new Republican-drawn congressional map in next year's election. Over three dissents, the justices lifted a lower court ruling that blocked the map. It was drawn at President Trump's behest to help Republicans try to keep their House majority in the next year. Although the order formally applies only until the justices resolve Texas's appeal, the court suggests it will ultimately rule in the state's favor. Well, Virginia Mann has been charged with placing pipe bonds outside Republican and Democratic National Committee headquarters in Washington on the eve of January 6, 2021 riot.

5:37That's capping a five-year federal investigation. Attorney General Pam Bondi announced the charges in a news conference. He has been charged with violating 18 U.S.C. 844, which is use of an explosive device. This investigation is ongoing. As we speak, search warrants are being executed, and there could be more charges to come. Attorney General Pam Bondi identified the suspect as Brian Cole Jr. of Woodbridge, Virginia. Cole was arrested earlier yesterday by the FBI. Turning to the economy and the Fed now, Lisa, National Economic Council Director Kevin Hassett says the Federal Reserve should cut interest rates at its meeting next week.

6:17Hassett was asked on Fox News if he thinks the Federal Open Market Committee will cut rates. If you look at the communications from the Fed governors and some of the regional presidents, they now seem much more like they're leaning in the direction of a rate cut, which is, I believe, the right thing. And how much would you like it to be? You know, in the long run, we've got to get to a much lower rate. If there's consensus around 25 basis points, which it looks like there is, then I'll take it. Yeah, that was White House Economic Advisor Kevin Hassett speaking on Fox News. Well, someone else who would also like to see a rate cut by the Fed, Nathan, that's Bank of America CEO Brian Moynihan.

6:53He spoke with Bloomberg's Francine Lacroix. Would a Fed cut help? A Fed cut helps. And our team believes the Fed will cut next week. They came to it slowly because the inflation is still higher than the target rates that the Fed would have. And sticky. It's sticky, although right when they started raising rates, people told me it takes five years to actually squeeze out inflation, and people just aren't patient. Bank of America CEO Brian Moynihan added that his team thinks long-term the Fed will get down to a 3 % Fed funds rate. Well, the S &P 500 lease is on track for a new all-time high as investors tilt toward risk on growing confidence in the economy and the prospect of rate cuts.

7:33Futures are within a half percent of a fresh record. In the commodities market, copper is at a record giving fresh impetus by a bullish price outlook from Citigroup. Traders there anticipate a shortage caused by stockpiling in the U.S. Copper rose as much as 1.9 percent to more than$11 ,600 a ton. That surpassed a previous high set just this week. All over in company news, Hewlett Packard enterprise shares are down 8 % in pre-market. That's after the company gave an outlook for sales in the current quarter that fell short of high expectations for the AI server business. Sales in the fiscal fourth quarter missed analyst estimates as some deals for servers to power artificial intelligence workloads were pushed into 2026.

8:17And MetaPlatforms has confirmed its plans to meaningfully cut resources for building the so-called metaverse, an effort that CEO Mark Zuckerberg once framed as the future of the company and the reason he changed its name from Facebook. Meta executives are considering potential budget cuts as high as 30 percent for Meta's metaverse next year.

8:41Time now for a look at some of the other stories making news in New York and around the world. For that, we're joined by Bloomberg's Michael Barr. Good morning, Michael. Good morning, Lisa. A federal grand jury in Virginia has refused to indict New York State Attorney General Letitia James for a second time over mortgage fraud claims. Prosecutors had sought charges against James less than two weeks after a federal judge dismissed the earlier case, saying that Lindsey Halligan, the U.S. attorney for the Eastern District of Virginia, had been improperly appointed. The James' charges against her, as she put it, are baseless and called for an end to the unchecked weaponization of our justice system.

9:22Bundle up heading outside this morning. Ooh, there is a shivering cold in the Northeast and some snow from the Great Lakes to the Pacific Northwest. Bloomberg meteorologist Craig Allen has the latest. Unseasonable cold continues to pour down out of Canada. And with January-like chills over more than 50 % of the eastern U.S. And the actual readings are as low as single digits and below zero in the plains in the upper Midwest and as low as minus 30s north of the border. And as for snow, there is a storm tracking towards the mid-Atlantic coast, bringing snow and winter weather advisories from Kentucky to Virginia and up towards D.C.

10:00One to three inches of snow will accumulate on all untreated surfaces. Bloomberg meteorologist Craig Allen. New York City Mayor Eric Adams issued executive orders aimed at addressing anti-Semitism, including one prohibiting city agency heads from engaging in procurement practices that discriminate against the state of Israel. Adams recently returned from a trip to Israel. President Trump and First Lady Melania lit the national Christmas tree at the White House. During brief remarks, President Trump delivered a message of peace and thanked first responders, police, ICE, and service members. Thank you to the men and women of the United States military, including the brave heroes of our National Guard here in Washington, D.C.

10:46The event also featured performances from the Beach Boys, Christian music singer Matthew West, and country artist Gabby Barrett. Global News, 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Bar and this is Bloomberg Lisa. Thanks Michael. Time now for our Bloomberg Sports Update and for that we bring in John Stashauer. A big game in the NFC. The Cowboys and Lions hoping to make the playoffs. Detroit never trailed in a game that had seven touchdowns and eight field goals. The Lions won 44 to 30. They were up by 18 in the second half. Dallas cut that lead to three but Jameer Gibbs with two fourth quarter touchdowns.

11:24He had three in the game. The Lakers with a three-point win in Toronto. LeBron James scored only eight points. It was the first time since 2007 that he was held to single figures as a streak lasting almost 1 ,300 games. That's your Bloomberg Sports Update. Stay with us. More from Bloomberg Daybreak coming up after this. As markets move and headlines break, what matters most is context. A Bloomberg subscription gives you unmatched reporting, sharp analysis, and powerful tools that help you connect the dots. Visit Bloomberg.com slash podcast offer to learn more.

12:02Coast to coast on Bloomberg Radio, nationwide on Sirius XM, and around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning, I'm Nathan Hager, and the bidding war over one of Hollywood's most storied movie and TV studios may be over. Sources tell Bloomberg News Netflix has entered exclusive talks to buy Warner Brothers Discoveries, film and TV studios, and the HBO Max streaming service, pulling ahead in a race with Paramount, Skydance, and Comcast. For the very latest, we are joined by Bloomberg Deals reporter Manuel Baigori. Manuel, thanks for being with us.

12:39I mean, this bidding war had the makings of a soap opera. How did Netflix come out on top? Definitely, definitely a soap opera. Or who knows, maybe a Netflix show down the line. But it's been fascinating to observe and to report on it. You know, very, very well-known brands, companies all around the world. And, you know, it's pretty remarkable that we are approaching the final stages as the year comes to an end. And this could be very transformative for the entertainment industry, not just in the U.S., but globally. given the sheer size of these companies. So it's just a matter of days before we might see a resolution to this sale process that has kept advisors and dealmakers very, very busy over the Thanksgiving break.

13:36And we are now very close to an end. So very, very much looking forward to it. Netflix is pulling ahead. They're offering a$5 billion breakup fee. That is really remarkable. Now remains to be seen also if they get designed and announced, whether it will get passed regulators. That is the next big question mark as well. Yeah, I mean, just the fact that we see that sizable breakup fee, is this the kind of thing that could face an antitrust challenge or a continued challenge from Paramount Skydance, which had really made clear that it wanted this company? Yeah, it's a really good point. I mean, there is going to be a serious look from regulators how this impacts consumers at the end of the day.

14:26Netflix is already such a big name, such a house name, such a big company. Now adding more assets into it, HBO Max among them, it's definitely going to attract the interest from regulators. I mean, but the same if Paramount or Comcast were also to acquire. I mean, the industry is quite consolidated at the end of the day, so regulators are going to take a close look. But perhaps the fact that Netflix is offering such a big breakup fee also indicates their eagerness to try to get this across the line. It's a very important asset as the company tries to keep growing, find new sources of revenue, and diversify, which is not easy because they are already a very large organization already.

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16:00Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm Nathan Hager. And I'm Lisa Mateo. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.