Netflix Acquires Warner Brothers, Apple’s Leadership Shakeup, SpaceX Prepares For IPO | Diet TBPN

0:00We are live again from the New York Stock Exchange. Thank you for the boat's sound, Jordy. Let me give you some facts about Netflix. They're going to buy Warner Brothers and HBO Max for an$82.7 billion deal. The acquisition is expected to close following Warner Brothers Discovery's spinoff of Discovery Global TV Network's division in Q3 2026. There's a bunch of fun, interesting things hitting the timeline. Obviously, this is a tech story because of Netflix. And it is a story that we will be talking about for quite a while. because although this has gotten announced in the last 24 hours, it's very likely that this is going to be a very long, drawn-out process before it actually gets regulatory approval.

0:42So it's official. In a move that will dramatically reshape the entertainment business, Netflix and Warner Brothers, or WB, don't call it Warner Bros, although we want to, the insiders, they call it Warner Brothers, or WB. Warner Brothers Discovery announced an agreement Friday under which Netflix will acquire Warner Brothers, including its film and TV studios, HBO Max and HBO. The deal has a total enterprise value, including debt of$82.7 billion, with an equity value of$72 billion, the company said. The announcement of Netflix's deal to buy the Warner Brothers streaming and studio business came after a weeks-long bidding war that pitted the streaming giant against David Ellison's Paramount, Skydance, and Comcast.

1:26Didn't Netflix's stock trade down on this news? Some people are excited about it. Some people are, plenty of people are not excited about it for various reasons. Some people don't think it'll get approved. Other people think this is, you know, it's quite an extension. WB obviously does theatrical releases. They have a movie theater business. It's not, it's definitely will be quite an extension to Netflix's core business today. So Netflix said it expects to, quote, maintain Warner Brothers. The company has historically been more of a builder than a buyer. And so Netflix is trying to, like, sort of reassure both fans, employees, even people who might just see Warner Brothers Discovery as, like, a fantastic asset that doesn't need to be, like, stripped for parts.

2:13He's trying to push back against a potential narrative that Netflix will be very ruthless in cost-cutting and lose some of that, you know, what people think made WB amazing art. So he said, Netflix expects to maintain Warner Bros. current operations and build on its strengths, including theatrical releases for films. I know this doesn't matter to you because you never go to the theater and you never see it from. Hey, we went and saw Dune. That was like two years ago. But we got a, when we did that, it was a lot of fun. We got a bunch of the guys together. We said we're going to make a monthly thing.

2:49Yeah, we were close. At the start of the year, we were doing that. We were doing that. We were getting everyone together, just like guys night out, kind of, but to the movie theater. Because we were like, okay, what do you do if you're a guy and you have a bunch of guy friends and you want to go meet up, but you don't really like drinking? You don't know anything about sports. Like, what can you do on a Tuesday night? You can suit up and head to your local movie theater. You can suit up and head to the local movie theater. I mean, the reality is that theaters are going to change. They are like, there's a question of like, you know, fast takeoff in AI, fast takeoff in streaming.

3:21Like it's been 20 years since you've been able to watch things on the Internet. So you've been able to watch home box office was a way to watch a movie at home. In some ways, the ability to put a TV in someone's house was the beginning of the end for the theater. They were immediately substitutes, although the difference was massive screen versus tiny CRT. And then it was like, OK, a 42 inch TV, flat screen. Now that might cost a couple grand and it was like a serious expense. It was a couple grand. Now they're practically giving them away. And so of course that's going to be a competitive pressure, but also it's not going to destroy the theater immediately, but it's going to have an erosion effect over decades and that's exactly what's happening.

4:01But it's nice that Netflix is not declaring this the end of the theater. They're going to continue to invest in support. So Netflix signaled it would keep HBO Max as a discreet service, while it also touted the addition of HBO and HBO Max content to its lineup. And so we're going to add the deep film and TV libraries and HBO Max programming. Netflix members will have even more high-quality titles. Will it be called Netflix Mac? You need to be Netflix Maxing. The article goes on. This allows Netflix to optimize plans for consumers, enhancing viewing options, and expanding access to content. Netflix says it expects to see$2 billion to$3 billion in cost savings annually by the third year after the Warner Brothers Discovery deal closes.

4:44This is from Martin Piers. He says, Netflix's Warner purchase is an$82.7 billion blunder. He's calling it a blunder. He says, it will likely, announced Friday morning, will likely prove a stupendous error by a management team that until now has rarely put a wrong foot. Netflix paying a huge price, 27.5 times next year's expected. Earnings well above prevailing multiples for film and TV companies for businesses that likely won't help but add many subscribers, right? Martin continues, moreover, the deal is likely to face severe regulatory obstacles. Again, so Netflix is not exactly Trump aligned, right?

5:21Netflix did a deal with the Obamas. And so I think that in a world where WB is going to paramount, I can see that much more likely to get through. whereas this is going to make sure the Netflix team is going to be spending at least the next year, I would assume, working on this. Yeah, I mean, it feels like it's so hard to make the case that this creates some sort of monopoly because Disney owns... It's like, yes, okay, now Netflix has Squid Game, and they also have Batman, but... Jason Kilar, who's a former Warner Media CEO, says, if I were tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix.

6:05Ben Weiss says, Disagree, Hollywood is competing with Silicon Valley, Apple, Amazon, Google Meta, preserving some notion of competition in and between legacy Hollywood, risks winning a battle and losing a war that old media companies need to more of the right type of scale. This does it for WB. Jason says, When I use that phrase competition in Hollywood, I'm referring to having a sufficient number of vibrant and robust entities that can and will aggressively compete against each other to produce and distribute films, series, live events, and more for decades to come. I'm not focused on the legacy of it all.

6:35I mean, it might be high, but just in terms of, like, Hollywood filmmaking, these feel like extremely competitive areas. There are so many different... There are so many different streaming services and bundles that you can piece together. There are folks who are like, yeah, you know what, I order from Amazon, so I have Amazon Prime. That's where I watch everything. There are still people that just go to Apple TV and just buy a movie. You can still just do that. You can be off in the Netflix ecosystem. You can be in the Hulu ecosystem. It doesn't feel like there's a crazy lack of competition in media right now.

7:18I would be somewhat surprised if this doesn't go through, but you never know. I don't know. I think Netflix, again, before this, we were having lunch with a cable exec, and he was kind of bringing up how Netflix had gotten caught up a little bit in kind of some of the woke stuff. Sure. And, again, I just think in Trump America, it just feels far more likely that the Allisons could get a deal done, and they're notoriously absolute dogs. Yeah, there's a rumor that they're going to try an outbid, right? Yeah, so right now, this is Chris Gasparinover at Fox says, Scoop, as reported, Paramount and Skydance is now looking to launch a hostile bid for WBD because it feels its$30 a share all cash offer is actually higher than what Netflix offered in terms of cash, stock, and the value of the spin-off of the cable business.

8:13So this is still developing. Before Netflix IPO'd in 2002, apparently Bezos offered$12 million to buy it. Can you imagine if Netflix had sold for$12 billion? Well, they also tried to sell the Blockbuster during the... So Blockbuster had a chance to buy it for$50 million and they laughed it off. But then it was just a DVD delivery service and they were like, we can build this. We have DVDs, we have all the infrastructure, we can just take it from the stores. Like, we don't need to do this. But what they didn't realize was that actually building technology, actually building a real tech streaming service and scaling that platform.

8:48I mean, Netflix has some of the greatest just infrastructure. And even the early recommendation engines. I remember my dad being like, yeah, Netflix just recommended. It knows what I like. And it just sent me this. They said, you're going to enjoy this. You were making the point that putting Netflix and Warner Brothers together, everyone's already subscribed to Netflix. I don't know if that's true. if the trends continue. Like, Netflix has a fair amount of, like, they have their squid games, they have some big IP, but if you just think about, like, the drumbeat of HBO, come back every season, oh, you're not watching Game of Thrones?

9:30You're out of the loop. Oh, you're not watching Succession? You're out of the loop. Like, the conversation-driving shows, I feel like, are on HBO much more consistently than Netflix. And in fact, I don't even know if I'm logged into Netflix on my phone right now. So you're a true enthusiast. For me, as someone who's not an enthusiast, I'll go to Prime because I'm like, I rarely watch movies. If I'm going to watch a movie, I want to just, I'm happy to just buy. I'm not like going like, let me get the free option on Netflix. I'm like, I will just buy the thing that I want to fill this 90 minutes with.

10:04Anyway, so the deal doesn't include WBD's cable channels such as CNN, TNT, TBS, and Discovery. Yeah, they're going to spin that out. Which are being spun off. Okay. Even if Netflix gets regulatory approval, it will have to take on$50 billion in debt to complete the deal, and will spend a couple of years cutting costs to reduce that debt. Netflix does do around$9 or$10 billion in free cash flow. Yeah. And so they can certainly service the debt. Yeah. Anyways, in the first nine months of this year, WBD's studio and streaming operations generated$2.3 billion in earnings. Next year, Netflix executives said they expected the Warner business to generate$3 billion in EBITDA.

10:39That's a price of 27.5 times EBITDA. Netflix says the deal value represents a multiple of 14.3 times. WBD's traditional rivals, Disney and Paramount Skydance, are each trading around 11 times. Kramer said, so out of the box, Netflix as the world's biggest content creator by far. Exciting, but not necessarily in a good way for shareholders. I think that's so funny. I don't think people realize the licensing business Netflix is about to have if this deal goes through. Warner Brothers animated IP library alone would bring in billions in new merchandising revenue coupled with new versions of these iconic shows on the platform.

11:15Game over. And he lists some of these out. And one of them I think is hilarious is Foghorn Leghorn. They own Looney Tunes. So they have Bugs Bunny, Daffy Duck, Porky Pig, Sylvester, Roadrunner, Wile E. Coyote. These are, yeah, these are time-honored iconic characters. I just think it's funny because very clearly, there are a series of bankers out there that have a spreadsheet and somewhere they have a row, and on that row is Foghorn Leghorn, and attached to Foghorn Leghorn is the value of the intellectual property of Foghorn Leghorn, who's like a large rooster who talks with a funny accent. And I just imagine that they're out there saying, like, yeah, Foghorn Leghorn, that's like 30 million, that's a$30 million business.

11:58Like, Porky Pig? Porky Pig's 80 million. Let's do a sum of the parts. What about Snagglepuss? I don't even know. I thought you were making some of these up. No, this is part of the Hanna-Barbera. Okay, so Polymarket has who will acquire WB at 86 % today. Paramount is still only sitting at 6%. Mike Miraflore says we already have Nano Banana Pro TVC commercials with decent paid media budgets behind them. Everything is moving so, so quickly. Okay. So James Harden is in an ad for my prize. I don't know what my prize is. said this is the best commercial he's ever been in. He never stepped foot on the set.

12:39Let me show you how to crack the code on celeb deepfakes for this MyPrize ad we did with James Harden. So this is a guy named Billy Woodward. Yeah. How much do you think they're actually putting behind this ad on TV? Because it looks like a TV commercial, but this also could just be a viral marketing campaign on... Wow, MyPrize is a premium online casino game. Wow, James Harden is getting it. on the gambling trade. There's a very viral post right now that says, Breaking, President Trump set to announce a new AI platform called TruthAI. There's not a single legacy media institution has reported on this that I've found.

13:18So I would, given that this is a story that they'd be very excited to cover, I would be wary that it's real yet. But that's not stopping J-Bull, T-A-R-D from saying, and you guys think Google won the AI race talking about how Trump is set to unveil the new AI platform, Truth AI. You know what the crazy thing is? I keep laughing about this fact that it has got to be so hard to justify an in-house AI foundation model training run now if you're a big platform when the rebuttal has to be, okay, so you're saying that you need to do something special, you need to do something creative, You need to do some weird deal with some other people, put something together.

14:02But Apple can just work with Google. Yeah. It's enough for Apple to work with Google. It's not good enough for you. Apple works to just buy tokens from Gemini from Google. But you, your business is more special than Apple's. I think Apple is in the position where they're like, we don't need to prove to. I feel like an analyst can look at Apple and say they will have leverage in AI. Yes. At least today. Yeah, yeah, yeah. Whereas where there's other businesses that feel like, OK, we need an AI strategy. It's not enough to just announce a partnership with a lab. Yes, yes, yes. We need to, like, actually own the weights.

14:36Yeah, yeah, yeah. The Wall Street Journal is saying that Apple departures point to challenges for iPhone's dominance. And I'm, I think it's too early to call the iPhone challenged. I feel like the iPhone's dominance has not been challenged yet. Maybe that is coming. You know, there have been several top lieutenants who have left in the past 12 months. Apple is facing a wave of executive departures as the company continues a period of transition, not only among its leadership, but if rivals have their way, for its businesses as well. On Thursday, the company announced that its general counsel and head of policy will both retire next year.

15:16On Wednesday, a top designer left for meta platforms. On Monday, Apple said its head of artificial intelligence strategy would retire. Its chief operating officer announced its retirement in July, and the CFO has transitioned into a new role. Are the heads rolling, or are these retirements? There's a lot of, like, you know, sort of management. It feels like Apple's just, like, not the place to let the drama kind of come to them. Apple was overdue for a full executive reset. Just need to add Cook to the list. And for a replacement, Forrestal is only 56. Time for a comeback. Ooh. Oh, that would be very interesting.

15:51Yeah, there's a lot of Forrestal fans out there who think that he didn't get it right or he didn't get the opportunity he deserved. Cook can't catch a break. I still think Cook's done a lot of good stuff. I'm still bullish on Cook. The executive departures underscore a changing of the guard underway at Apple. Even as Chief Executive Officer Tim Cook himself shows no sign of stepping down, even though everyone is leaking a variety of rumors to the contrary. Cook and his new lieutenants face a critical test preparing Apple for the AI era and a wave of new competitive devices that result. SpaceX tells investors it's aiming for a late 2026 IPO.

16:32Apparently Elon Musk's SpaceX has told investors and financial institutions that it is aiming for an IPO in the second half of next year. The talk comes as SpaceX considers holding a sale of shares held by investors and employees that would value the company at$800 billion. Quite the markup. Double its valuation in a sale this summer and what would make it the most valuable private company. He's got to be the most valuable private company. It probably candidly makes him sick that OpenAI has briefly eclipsed. Mark Benioff is saying that he might rename the company Agent Force. Trace Cohen says just Force.

17:09Why not just Force? Oh, Force. Well, isn't there a, isn't there Force India, the F1 team from a couple years ago? BYT, or BWT, Force India? That was like a team. Benioff is on a tear, his pinned tweet right now. LLMs are the new disk drives. Commodity infrastructure you hot-swap for whoever's cheapest and best. The fantasy that the model is a moat just expired. They're going off down here. Why not just sales? I like just sales. Just be sales, Inc. I don't think you can be. I think that's too generic. I don't know. Not if you're... For what you do? I mean, he would have to update the ticker, too.

17:48The ticker is the bigger one. F it. Nothing else is working. Go for it, brother. A name change sometimes will fix you. For anyone who doesn't understand, Cursor processes more tokens than Salesforce. All-time figure every six days. Salesforce has 20 million users. I mean, credit Cursor has a similar amount of users, I think. Sure. Assuming same average token count per active AgentForce user count is 40 to 60 ,000 truly active users, a.k.a. 0.2 to 0.3 % adoption three years after launch. Like all tokens are not created equal. Like you can generate so many, so many tokens if you're doing these like deep research reports.

18:28And like if you had AgentForce going around and effectively running a deep research report on every contact and every CRM under like under... Every conversation. Every time you get a new email from a lead, right? The token generation could be incredibly high and also deliver very little value. On the flip side, you could have a really fine-tuned model that is, you know, laser-focused, more of a scalpel. And you could be getting a lot of value out of those tokens that you are generating. So I don't really know. Logan Paul, Jake Paul, and Jeff Wu are starting an eight-week accelerator. It's a$25k save followed by a$100 ,000 price round for a total of 7 % equity.

19:10A lot of people are confused about doing it as a price round for$100k. A founder could easily end up spending like$30k, you know, depending on who their lawyer is. So it's like a$100k investment and then you have like, let's assume you're like super efficient and it's like$10k. Yeah, it's kind of annoying. And then, yeah, it's annoying. That said, I think there's a lot of interesting businesses that could go through this that would really benefit from working with Jake and Logan and Jeff. It's so interesting that it's a$25 ,000 safe and then a$100 ,000 price round. Why not just$125 ,000 for 7 % on a safe with a cap that ensures they get 7 % no matter what?

19:56I would love to talk to them. I think hopefully we're going to be able to get Jeff Liu on the show at some point. and we can ask him about how he is thinking about that particular term. Oh, 7 % for$125K, that's low. And that's certainly lower than YC. YC, you come in with, I think, a$10 million valuation. This is more like a$1 million valuation. But if you're an earlier in your career, you're not ready to go to a different higher valuation, this could still be a good deal. Or you don't need a lot of capital for your business, but you do need a lot of attention. Like, I could see some consumer brands getting started this way.

20:30No, I mean, I just remember, like, YC was my north star for, like, what I wanted to get into with my first business. But, like, I got denied the first time I applied. And I was like, if you gave me$5 ,000 for 10 % of the business, like, I would take it because I want to work on my thing. And I want to keep going. And, like, yes, at some point it can be predatory. But like with some of the first ideas that I was coming up with, like I definitely didn't deserve 125K for 7 % because they were like slop companies that were like very unlikely to succeed. So I do wonder if they will position this as, OK, you're going to be able to accelerate on the go to market side.

21:07You're going to be able to accelerate on the creator side, creator partnerships. This will be there's a whole bunch of different ways. It could be something where you're going through this accelerator because you get to ask Logan and Jake about their media creation, their creator work. And then you're launching your company and you're more likely to go viral because these guys really understand virality. On the other side, it could be you're coming in and you're taking a crack at building something that might wind up being more like an incubation for them. The remaining Apple leadership team. Who is this?

21:40Travis Scott, Tim Cook, and Mr. Beast. Mr. Beast, of course. Mr. Beast did say that he's going to film on iPhones. I'm not sure what the Travis Scott connection is. Has he done a partnership with Apple in one way? No, it's just a good fit. No, there are still plenty of folks. Eddie Q is still there. Apple leadership team is still stacked. Don't you worry. Don't you worry. Apparently, OpenAI must turn over 20 million chat logs to Plainis. Judge Ona Wang has ruled. Yeah. You have to send an email to a server that adds a chat GPT response in, with your lawyer CC'd. That's how you maintain confidentiality.

22:17Harvey, who Keith also mentioned, raised$160 million at an$8 billion valuation. This is why Keith was talking about raising money. 2 % dilution round from A16Z. I mean, you gotta take that money. A three extra revenue this year to$150 million. They raised$300 million from Sequoia at$3 billion in January. $300 million at$5 billion from KOTU and KP in June. And then$160. And then$160 at eight from A16Z. shout out to Spencer and the boys at KOTU for a little markup there. I feel like law firms have got to be pretty discerning on making this purchase decision at this point. It's not entirely exploratory budget anymore and it's not viral like something that's like, oh, it's like a flash in the pan and then all of a sudden they're not going to be able to monetize it.

23:02My question is if anybody that wants to say this is out of control, do you think they'll be able to get to like a billion dollars of revenue. The legal industry is pretty big, and it's been traditionally pretty hard. And they actually, so the labor displacement thing does feel real here, because I do think a law firm would say, hey, currently we have 100 associates. We can condense that down to about 20 and do the same amount of work by working with something like Harvey. And again, the vibe had, at least with a lawyer buddy of mine, had shifted drastically with Harvey a year ago. he was saying, we're like using it a little bit now.

23:42He's like, it's one-shotting stuff. Yeah. I didn't think it would. I'm one-shotted actually by it. I'm one-shot. Thank you for tuning in with us today and yesterday from the Nicey. And we will be back here soon. We'll see you on Monday. Cheers. Thank you.