Paramount Crashes Netflix’s Party & Trump Bails Out Farmers

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0:32Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today Netflix crashes Paramount's party with a hostile bid for Warner Brothers. Then tech bros are going to etiquette school to learn how to be normal humans. It's Tuesday, December 9th. Let's ride.

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3:23Paramount's pitch to Hermione, I mean shareholders, is that its bid gives them$18 billion more in cash than Netflix's offer, represents a better chance of getting across the finish line since regulators will be tougher on Netflix, and also asserts that they were always the better option had they only been given a fair shot. Paramount Pinky promises it can afford the massive price tag despite its measly$14 billion market cap, thanks to help from Oracle co-founder and elder Ellison Larry backstopping the bid, along with debt commitments from banks. Notably, the sovereign wealth funds of Saudi Arabia, Abu Dhabi, and Qatar are also involved kicking in$24 billion, though they would forego any board voting rights.

4:04But likely the number one thing working in Paramount's favor is the skepticism President Trump showed when asked about Netflix's deal. Speaking about the Netflix bid, he said it could be a problem, which many interpreted as a sign of antitrust headaches in the future. Bets on Polymarket this morning show just a 19 % chance of the Netflix deal closing by the end of 2026, down from 60 % just before Trump's comments. Neil, I thought Warner Brothers Discovery chose Netflix. How is Paramount suddenly back in the running? Well, they're launching a hostile takeover, and that's when the company attempting the takeover is basically taking no for an answer.

4:42The book definition is when one company tries to acquire another company against the wishes of the target company's leadership, whether it's its board of directors or its executives. There have been a number of examples of hostile takeovers in the past, many of which have not been so successful. Some have been. Just go back to 2022. Elon Musk tried to take over Twitter against the wishes of its board of directors. Eventually, they acquiesced and Elon Musk acquired Twitter. JetBlue tried to take over Spirit in a hostile takeover in 2022 as well. Microsoft, all the way back in 2008, tried to launch a hostile bid for Yahoo.

5:20The hostile bids are not so common in the big media industry because it's kind of clubby and all of the CEOs know each other. So when there's a takeover attempt, it's usually pretty friendly. Brian Roberts, who's the CEO of Comcast, tried to do a hostile takeover at Disney in 2004. That did not fare well. So what Paramount is doing is going is trying to sidestep the board of directors from Warner Brothers, who said no to Paramount and said yes to Netflix. And they're saying, look, we're going to give you an all cash,$30 per share offer. Take it or leave it. If they sell 51 % of outstanding shares, then Paramount will eventually own the company.

5:59And that's what is on the table right now for 20 days. It's called the tender offer. It's open for 20 business days. Any Warner Brothers shareholder can sell their shares to Paramount at$30 a share. Of course, a lot of stuff could happen in between them. There could be lawsuits. Netflix could also raise its bid and come in with a counter offer to counter what Paramount just launched. So it could get very, very messy, but basically that's what's happening. It's not necessarily apples to apples, either the Netflix bid and the Paramount bid, because Netflix doesn't really want the cable assets that are part of Warner Brothers Discovery's portfolio.

6:34They're a streamer. They want the content. So they only bid for that portion of the company. Paramount wants the whole enchilada. They want CNN. They want everything that comes along with it, warts and all. So you can't just say, oh, it is$18 billion more in cash. It's not necessarily bidding for the exact same thing. The other aspect to this, first of all, media reporters had a field day yesterday diving into every backdoor conversation and what was going on. And the general consensus that Semaphore actually said was that Paramount thought it was playing 5D chess. They kept saying behind closed doors that, hey, we have a really good relationship with the Trump administration.

7:11I think we're going to get this bid done because, you know, Trump likes the Ellison family. That has kind of come around and backfired a little bit that they overplayed their hand in that regards. Ted Sarandos, Netflix co-CEO, had a meeting with Trump and basically did the dirty work and the groundwork to try to say that, hey, our bid is going to be fine as well. So maybe the Ellison angle has overstepped their boundaries a little bit, which is coming back to bite them in the butt. Yeah, it's not clear what Trump is thinking. And he is the big X factor here because on Sunday night, he did say that he was worried about Netflix and Warner Brothers market share combined called that, quote, a problem.

7:49But then yesterday morning, he went on a rant against Paramount in 60 Minutes. Paramount just bought CBS, which owns 60 Minutes. And he said Paramount's doing a bad job running this particular network, at least according to him. So it's very not clear what he's thinking. He is basically, if you've seen The Apprentice, he's basically playing his role on The Apprentice. He's got, he's in the boardroom. He's sitting there. He loves playing Kingmaker. He's having these two guys battle against each other, and he's not basically explaining what he's thinking at all. So right now, the ball is in Warner Brothers' court.

8:22It's very unclear what offer is better. As you said, it's not apples to apples. Barclays, or TD Cowan, the investment bank, said it's very hard to argue that Netflix's offer is better. So we will see what Warner Brothers shareholders decide with this$30 per share offer. There's a chance that perhaps if Warner Brothers executives and the board of directors see that all of their shareholders are defecting to Paramount and selling their shares, they could go to Paramount and say, okay, let's actually talk in friendly terms because we want to get the best deal for us. So this is an incredibly juicy saga that we will keep reporting on over the next few weeks.

9:01While the world's most famous factory is at the North Pole, the world's biggest factories are in China, which yesterday reported an astonishing$1 trillion trade surplus with the rest of the world, something we've never seen before in the history of the global economy. It shows China's exporting might in a wide range of goods, from low-value toys and T-shirts to higher-value cars, drones, and solar panels. Everything comes with a made-in-China tag these days. The trillion-dollar surplus also shows the limits to Washington's trade war with Beijing. The Trump administration has slapped steep tariffs on China to slow the flow of goods to the U.S., and that's been working.

9:34Okay. Chinese exports to the United States dropped by nearly a fifth through the first 11 months of the year. But facing barriers in America, Chinese factories have found eager buyers elsewhere. So far this year, Chinese exports to Africa, Southeast Asia, and Latin America have surged by 26%, 14%, and 7.1 % respectively. The EU Chamber of Commerce in China estimates that for every shipping container sent from Europe to China, four containers head in the opposite direction. Around the world, they estimate that China accounts for about 37 percent of everything that's exported in shipping containers.

10:07Toby, we have never seen this level of industrial prowess by a single country before, not even the United States after World War II. And it's the kind of thing that keeps world leaders awake at night. This is when you're at the middle school lunch table and your best fruit roll of trade partner says, actually, I don't necessarily want to buy your goods anymore. You go and find another lunch table and you start selling all your stuff to them. China has plenty of willing buyers from the world market. That is why even though you have this trade war with the U.S., the EU steps in, Africa steps in.

10:37They have plenty of people who want their goods. The other part of this story as well is a currency story. The renminbi, which is China's official name for its currency, is very weak when compared to something like the euro. So one, that makes it very difficult for the European Union to compete at all. They can't set up their own manufacturing prowess because of just how cheap China can produce and export goods for. And then it also just leads to falling prices within China, falling input prices within China. So everything is just cheaper when compared to global currencies that it's competing against, which is why China is able to just have this flood of goods hitting the world market.

11:18And what's remarkable about China's factories is that in the 80s and 90s, when this economy was getting going and they became the world's producer, manufacturer, main exporter, is they were making those low value goods. They were making toys, cheap consumer electronics, apparel, things like that. And now they are still making those kind of goods, which a lot of people want to buy. But at the same time, they've moved up the value food chain in remarkable ways. They are making autos. They are making solar panels. They are making drones. They are making semiconductors. So the fact that they make all those low-value items and all those advanced manufacturing items is absolutely astonishing economists who have never seen anything like this.

11:56And it's very much a warning shot across the bow to a lot of countries, especially in Europe. Macron, Emmanuel Macron, the president of France, just came back from a visit to China, and he said it's hitting the heart of the European industrial and innovation model. Germany gets 5 % of its GDP from auto manufacturing, and Chinese cars are surging on the roads there. This is a huge problem that they're going to have to deal with. And I do think that there is a paradox within the domestic China itself because they want to spur consumption of their own people. They want people to buy stuff, import stuff, things like French wine or foreign goods like that.

12:35But when you have such a weak currency, it's very expensive to buy imported goods. So that is weighing on domestic consumption even while they have this sustainably high factory employment. They want two things at once, but you can't necessarily have both things at once. So some are saying that maybe they have to cut that trade surplus a little bit in order to spur this domestic spending. because they have been lagging for years when it comes to, you know, just everyday people living and spending money in China. Yeah, top economists in China have said we need to let the renminbi appreciate. So to bolster our consumers, because there is a two track economy in China right now.

13:12It's factories, it's exporting is doing amazingly well. Domestic consumption is not doing well at all. Moving on, you know, when you did someone a little dirty, feel bad about it, then buy them a couple of beers to smooth things over. That's kind of what the Trump administration is doing for American farmers. Yesterday, the president announced$12 billion in aid to struggling U.S. farmers who have seen lucrative foreign markets dry up because of the trade war. Of course, that's not how Trump framed it. Publicly, administration officials are blaming low crop prices and higher costs for farm equipment, as well as some Biden-era policies as the reasons farmers are hurting.

13:46Still, there's no denying that farmers have been bruised up from the trade war, specifically those who sell soybeans. After Trump imposed high tariffs on China earlier this year, China stopped buying American soybeans altogether, a devastating blow. Each year, China buys about 29 million metric tons of soybeans from the U.S., making it the top export market. But that 29 million went to zero as China decided to hit Trump where it hurts, his base of voters. After Trump and Chinese President Xi Jinping agreed to a truce in the fall, China has ramped up its soybean purchases, but it's still about a third of what they normally buy, and officials say that a cash infusion is needed to help farmers bridge the gap into the planting season next fall.

14:26It's not just tariffs that are weighing on farmers. It's also just a variety of factors. The U.S. harvested the largest crop on record this fall, which unfortunately is not good when you have no buyers that just pushed prices down even further. We are seeing that play out in farmer bankruptcies are up 60 percent the first half of 2025. And yes, there are some input costs that are going up as well. Fertilizer, what Trump spoke to. These farmers always operate on a very razor thin margin. So any slight change in the input cost does change the calculus as well. They are thankful for a bailout. I mean, obviously, when you're struggling, any infusion of cash is going to be good.

15:05But most of all, they just want to be able to compete again on the global markets. Again, they want to sell their goods to buyers at fair prices rather than just get a one-time top up of their coffers via this bailout. So yes, on the one hand, they are thanking Trump for this, but on the other hand, they're saying we really just want our businesses back. Yeah. Research economists at North Dakota State University, Sean Arita, said that crop producers in the United States are going to lose between$35 billion and$43 billion on what they just harvested this fall. So the$12 billion bailout comes far short of that.

15:38Farmers right now are going through their biggest crisis since the 80s in the United States. All right, we're going to take a quick break and come back with Toby's trends. You know that saying more money, more problems, Toby? Of course. Why do you think my life is so chaotic? Sure. Well, with startups, it's more like more money, more security. Big enterprise deals usually come with even bigger security and compliance requirements. Yeah, the right kind of security posture doesn't just protect you. It can actually make or break a deal. Thankfully, Banta's AI and automation makes it easy for you to get big deal ready in days.

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17:27Head to quest.com slash brew to get started. That's quest.com slash brew. Silicon Valley has long been characterized by the social network era of hoodies and flip-flops, but times are a-changing. And those changes towards a more formal getup are being ushered along by founders going to etiquette class, a trend I want to talk about on today's edition of Toby's Trends. Led by investors including Sam Lesson, Zuck's old college classmate, and Jack Raines, who I've played pickup basketball with in New York City, etiquette workshops became the talk of San Francisco. after 40 young, mostly male founders attended a recent event.

18:06Once there, models walked founders through appropriate outfits for board meetings versus brunts with the boss. Attendees were also coached through the so-called invisible curriculum of entrepreneurship, which includes basic communication skills like remembering to ask questions rather than to monologue. The thrust behind the idea is that tech leaders are no longer outsiders who can get away with countercultural signals like dressing poorly. They are now the global political actors appearing everywhere from Davos to the White House. So there's an expectation that they look and sound more polished given their proximity to power.

18:39Neil, for a long time, the quality of your code was all that was important. Now optics and aesthetics matter too. Perhaps an etiquette school for podcasters is in the cards for us. I don't think we need it, Toby. I think we know how to get along in this world. But for many tech founders, probably they would admit it. they were the subject of Sabrina Carpenter's manchild. And now that they're going to be appearing in public places and selling their pitches to a more genteel type of investor or a skeptical public, they need to look and dress the part. And that was the thread that permeated this etiquette school.

19:14What you heard from the founders of the etiquette school, as well as the people attending the class, is that this new technological paradigm is what all these founders are building is based on AI. And it is a technology that is not necessarily welcomed by the public. A June survey from Pew Research Center found 50 % of Americans are more concerned than excited about the increased use of AI in everyday life. That's up from 37 % in 2021. So you've got a very skeptical public about all these products and software features that these founders are creating, and they have to sell it to the skeptical public.

19:49And they're not going to do it looking like Zuck in the social network. And that was a main theme that was hammered into them at this etiquette school, which I find pretty fascinating. And a part of the reason why these founders need to attend etiquette school is that a lot of them are immigrants. A lot of them are international students who are not so familiar with Western business norms. So it is a service to some people. If you enter into a new country, if I went over to Japan, for instance, they have a lot of cultural norms about how you should act, how you should present yourself. Sometimes you do need that taught.

20:20So yes, you can roll your eyes and say, oh, these are all just, you know, hoodie wearing people that need to start wearing suits to work. Or you could realize that a lot of them probably haven't encountered things like when to shake hands and make eye contact, when to wear what to what certain events. So there is the immigrant angle to this, as well as the fact that, you know, some people just need to step their, their wardrobe up. Well, we can't leave you without some of the tips from the etiquette class. So I was looking at what they were being instructed, you must wear it when you're wearing a suit, you must wear a tie or the suit has to have a pocket square.

20:54Okay. You hear that Toby? I know you hate ties. So you need to have a pocket square in your suit. If you're going sans tie, it's okay to mix patterns. Just make sure the pattern on the jacket is bigger than the one on your shirt. And then when you go to a fancy dinner and you see this huge wine list and languages, you don't understand it's acceptable to order anything but a rosé dang it i've kind of missed all three of those so maybe i need to go to again i'm telling i'm telling you podcast etiquette school could be in our future neil now let's sprint to the finish with some final headlines well nvidia got its wish trump announced yesterday that the u.s will allow nvidia to export its h200 ai chips to approved chinese customers regaining a key revenue stream and customer in the form of the world's second largest ai market But there is a catch.

21:42In exchange for the relaxed export controls, NVIDIA must pay Uncle Sam 25 % of those China sales. It's an escalation of the previous deal in which NVIDIA had agreed to a share of just 15 % of its sales. Still, investors liked what they were seeing, pushing shares 2 % higher in after-hours trading. The move prompted backlash, though, from some senators, with Elizabeth Warren calling it a colossal economic and national security failure. Trump, on the other hand, believes the U.S. is keeping its tech advantage, saying NVIDIA's U.S. customers have access to the company's highly advanced Blackwell chips and soon Rubin, neither of which are part of this deal.

22:20Neil, pretty big pivot here, though, when it comes to the U.S.'s export control policy. There's two sides to this debate. There's one side, and on this side is David Sachs, who's the AI leader in the White House, and Jensen Huang, who is the CEO of NVIDIA. They have been pushing Trump to allow sales of these higher end semiconductors to China because they say that it will lead to Chinese dependence on American technology for AI. And that is the way to spread technological soft power across the world, especially in China. So they say instead of cutting us off from the market, why don't you let us get in there and make them dependent on us?

22:58And that appears to be the argument that won out. The other argument against this, like Senator Warren and many others, say that we're giving them to China right now. First of all, we're locked in this big geopolitical race for the next, what could be the next industrial revolution. And right now we're giving them our main advantage. So they might have engineers. They might have better power. But we have Compu. We have NVIDIA. We have these chips that all these AI models run on. And we're giving, basically ceding to them, our main advantage. So those are the two arguments. It's one side, one out, but that other side is still going to hammer the fact that we, the United States, is basically seeding the one thing that it has going for them right now.

23:36And it's still, the United States is still in the lead. But perhaps if we let NVIDIA sell some of its best chips to China, then we're going to let that lead slip away. One aspect to look at here, too, is that the U.S. previously approved H20 exports over to China. And then China actually said, actually, companies within China do not use these chips, which, again, was them either angling for two things. One, they actually did not want their companies using these chips, or they were waiting for a better deal down the line. So maybe they pull a similar stud again and said, OK, you gave us the ACE 200s.