The US is actively discussing a potential offer to buy Greenland. I mean, they're not just murdering US citizens. They're very busy on other things.
Hi everyone, this is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. Scott Galloway continues to be under the weather, so I brought in two more amazing co-hosts. We've got Audie Cornish, host of CNN This Morning and the podcast The Assignment, and Bill Cohan, one of my favorite people to talk about business because there's a lot going on there, author and founding partner of Puck. Welcome, Audie and Bill.
So, I had nothing to do with Scott's disappearance.
Not that I haven't wanted to be on the show a lot. Like, I've been waiting with this quarterzip just so that I could be a part of the dialogue.
I did. And I was like, are we talking business?
So, I'm sure Scott's fine. I didn't do anything to him at all.
No. Okay. All right. You were trying. Yes. That would be a really good show of like trying to take down a co-host.
Like a Nancy Caribon, Bill.
I do, but I don't have a Warner Brothers Discovery quarter zip.
I wore that for you. I got this from David Zaslav himself.
I technically did as well.
Yeah, exactly. Yeah, he gives them out. He dresses—I'm going to say this honestly. He dresses—I told him he dressed like a lesbian and he sent me this.
Only lesbians can say that. I opt out. I unsubscribe.
Unsubscribe. Um, but yes, it's actually a fantastic vest. I have—
Thank you. It's really comfortable and I wear it all the time. And uh, my son this morning uh said, 'Oh, that's the uh Scooby-Doo people.' So I guess that is of all the things.
Yes, exactly. We're going to talk about that and I really enjoyed your stuff, Bill, but we've got a lot to get to today. Um, so we're going to dig in. There's a lot of news and the first one obviously is the fatal shooting of a 37-year-old woman in her car by an ICE agent in Minneapolis and sparking outrage and protests again. Uh, the woman, Renee Nicole Good, uh, was a US citizen, a mother of three, and a poet. She was not under any kind of investigation, according to law enforcement officials. Homeland Security Secretary Kristi Noem uh said Good was quote stalking officers in attempting an act of domestic terrorism. What a heinous person she is. And Minneapolis Mayor Jacob Fry called that [__] and told ICE to quote, 'Get the [__] out of Minneapolis.' Uh, President Trump weighed in on Truth Social and once again blamed the radical left. Um, he did an interview just where the reporters from News showed it to him and he sort of walked it back. Uh, but he didn't precisely. Um, and of course they're doubling down. Tom Homan for a second was reasonable and he got the memo that they're supposed to call this woman a radical terrorist. Um, I want to get both your takes here, but first let me share Scott Galloway's thoughts on this which he texted me last night. I'm horrified. History shows politics uh becomes a blood sport. A nation's light begins to flicker. Uh, Adam, Newsom, Whitmer, Shapiro should announce candidacy this week and say if elected we are going to have the equivalent of the Nuremberg trials. There needs to be a reckoning to start the stain of corruption, insurrection and bigotry. Dems are such [__] wimps. That was from Scott. Um, the words of Scott Galloway, ladies and gentlemen, from his sick bed. Audie, I'll start with you. What do you make of what we're seeing? You reported on it all morning on your show on CNN, your morning show. So talk a little bit about it and you've covered this kind of stuff many times.
I have. And I mean, talk about grim. Like, I think this woman had dropped her kid off at school, like a six-year-old. Um, and so many people right now, wherever they fall on the political spectrum, feel a kind of helplessness, like, wait a second, am I really where I thought the country would be? And so if you're one of those people and you decide, well, I'm going to go out somewhere, I'm going to do something, I'm going to be present, um, and kind of protest. And I'm not saying she definitely was protesting, but just the idea that you are in mortal danger now, uh, in these scenarios, I think is pretty terrifying. Also the setting, it being Minneapolis, it being this many years after the death of George Floyd, it being in a place where protests went for a very long time and in fact other protesters were killed, like it can spin out into something else. And then lastly, the fact that this whole operation, you know, almost 90%, I think 87% of the Somali in the state are naturalized citizens. They are legal. So now you are really trying to find one and two and three people and you have a city that is prepared. You'll look on your TVs in the next day or two and see some protesters wearing their gas masks already because they have seen this movie before, a kind of militarized um response from law enforcement.
So can I ask you one other question? The response from the Trump administration immediately was trying to spin it. Of course, Kristi Noem had put on whatever hat she had that day and started to spew lies. And then the videos, all of them were very much different, including Fox News commentators commenting on, well, she was turning away from the ICE person, not, you know, she was trying to hit him. She's obviously dropped her kid off from school. There's very little known.
I mean, look, if there's one thing we know how to do as Americans is, uh, scrutinize a video of a law enforcement involved killing. Uh, I think we had a fair amount of practice at that. We have not had practice doing that with a white mother, you know, of a couple kids. And I think this has looked very shocking for people and familiar in ways that feel very sort of dark. The administration's whole stance on this entire process has been always double down, always triple down, never give any ground. Um, because they feel they have not just uh some kind of moral authority. They'll evoke this mandate you hear over and over on these cable news panels. This is what people voted for. Um, I'll just wrap up by saying we don't matter what the TV news says or commentators. People have eyes and they have social media. And I have watched all of these ICE enforcements and arrests and protests on social media where people offer their own commentary. And I think that is having way more impact than the administration would like to think. They want to think it's a Democratic governor somewhere saying something that's rhetoric that make people say f ICE. Uh, check the hashtag, you know, it's not run certainly by any Democratic uh messaging operation.
Right. Right. So, Bill, I want to bring you—one of the things that I'm watching though is a lot of suddenly business people, well-known people, the head of the guy who runs Jeopardy spoke up. Right. And I just was noticing Paul Graham, who I think you know, he was the head of Y Combinator, um, wrote, 'ICE just shot and killed a woman in Minneapolis, a US citizen. How long before we say enough is enough?' Elon Musk responded, 'Uh, she tried to run people over.' And Paul wrote back, and Paul is—I wouldn't call him a liberal by any means. In fact, he's somewhat irritating on many levels. Um, uh, she didn't. Uh, no, she didn't. Here's the evidence. She's turning the wheel, the front wheels of the car to the right away from the ICE officer on her left. She was trying to run him over? Or why would she turn in the other direction? Um, there's—Do you think, Bill, because a lot of the—you haven't heard, you know, word one from any tech people on any of this or any business people on this stuff?
Yeah, I think we may be reaching a tipping point on that, uh, to use a phrase that a lot of business people can understand. I think um, this is obviously the inevitable outcome of the wider Stephen Miller agenda, uh, which is heinous in almost every respect. And you know, and you'll have to remember that Stephen Miller's grandparents were immigrants and if uh his policies were in place for them, uh, you know, maybe they never would have come to this country. Grokking Stephen Miller will be a decades-long thing for future historians. But go ahead.
Absolutely. I mean, this guy is completely out of control. Witness the uh interview he gave to Jake Tapper the other day, uh, which happened to be about Venezuela. But the same kind of arrogance and hubris applies here. Uh, so I mean, these situations are powder kegs, uh, you know, bringing in highly militarized uh, you know, ICE officers into neighborhoods and rounding up people who should never be rounded up. You know, so it seems so un-American to me. I don't think this is what we voted for at all.
But why have businesses remained largely silent during George Floyd?
Because you know, it doesn't—
Well, I mean, first of all, that seems like a lifetime ago, you know, the reaction to George Floyd. I mean, people have whatever gotten with the program. Uh, I remember uh having a dinner a few months ago with the CEO of a tech company, uh, Kara, who you probably know well, who I asked this exact thing. Why are you not speaking up more, uh, uh, profoundly about what's going on here? No, because it doesn't affect my business. Uh, what affects my business is, you know, my shareholders, my creditors, my employees. Uh, you know, this doesn't affect—what Donald Trump is doing, what the regime is doing doesn't affect me. It's not my business. I'm going to stay out of it even though it's totally reprehensible and that these people should be speaking up.
I mean, why have FU money if you're not going to speak up and use it?
Yep. Yep. Absolutely. I mean, it'll be interesting. Last thing, where do you imagine this going now with these videos? I mean, it was really interesting the New York Times interview because it looks like he was like, 'Oh, yeah, I guess not.' Will they continue to double down? What is the—Because, of course, it takes away from their Venezuela capers, which we'll get to in a second. It takes away from their Greenland capers.
I'll be honest, it depends on what happens next. I mean, you'll notice my eyes are kind of going like this every few minutes is because right now there is this kind of images of what looks like a standoff and uh between protesters who are like linking arms and then you have—uh, this is the state of the country we're in right now. I'm like, are these National Guard? Are these police? Are these ICE police? Like, who am I even looking at? And is this even how you do crowd control? Is this how you enforce things? And I just want to add one more thing here. The ramp up that we are witnessing of this law enforcement agency that is not structured the way the others are, does not have—it's unaccountable in such profound ways and I think that I will be very curious if people feel like they voted for that because when I hear the manosphere and the podcast bros kind of be like, 'I don't know, man, I don't know if you should be—I can't believe they're doing this, I can't believe they're doing that,' to me that's now reached the stage where the average person does not perceive this as just a mass deportation of criminals. I do think that horse has left the barn. It's now do they think that what's being done in their name, um, that they as voters should step in and somehow try and stop it or make their displeasure known.
Which they have been doing. I mean, Gestapo wasn't what we voted for. I guess that's—go ahead.
I mean, I just think we're living, sorry, uh, through an era of unaccountability. There's no accountability for ICE. There's no accountability for Venezuela. There's no accountability for ripping down the east wing of the White House. There's no accountability for re-describing what happened on January 6th on the White House website. I mean, every day there's uh an example of bad behavior that would normally be unacceptable. In my lifetime, uh, it would be completely unacceptable for our politicians to act this way. And yet, uh, they do it with impunity and there's never any accountability.
But there is a lever, just no one's pulling it. I mean, I hear Scott talk like this all the time, but the business community seems to have walked away from the awakening.
And a bunch of them went, 'That really went too far, don't you think?' And so, they don't give a [__]. Like honestly, I genuinely feel like they are going on yachts and building up fortresses for themselves and they no longer feel actually engaged with the country in a lot of ways. And I don't say this as some like raving liberal. I'm just like, they are absent. They don't yank funding from things. They don't get advertising from things. They go to every dinner they have at the White House. Like, I don't know what the business community—
I think they do. I think they do give a [__]. I think that they prefer not to be the nail that sticks up that gets this madman's attention and then puts them in the crosshairs and they have to deal with some, you know, analogous event that uh that they didn't want to have to deal with because they spoke up. So, I think they do care.
Renee Good took a risk. Billionaires won't. And I'm confused.
Yeah. All right. Well, that's a good point. Yeah. Go ahead.
That's why I say if you've got FU money, why aren't you using it?
Yep. Yep. I have to say I'm with Audie on this one. It's like they could—This is not hard. None of this is particularly hard and it doesn't affect your own—
Midterms are coming up. You can throw around all your First Amendment money, you know, First Amendment money then. Yeah. Will they? I'm not holding my breath.
Well, now we're going to talk about Venezuela. Here are some of the highlights of the story since our last episode. President Trump will meet with oil industry executives on Friday at the White House after saying the US may subsidize the company's efforts to rebuild in Venezuela. In other words, the taxpayer will pay for it, which he estimated would take 18 months. Uh, probably just made that up. On Wednesday, President Trump said US control of Venezuela could last for years. The president has withdrawn the US from 66 international organizations and treaties, including climate groups. The US seized two oil tankers, including a Russian-flagged vessel linked to Venezuela in the North Atlantic. The national security leaders have said the administration does not plan to use ground troops in Venezuela. Of course, in related news, the US is actively discussing uh a potential offer to buy Greenland and hasn't ruled out military uh action. I mean, they're not just murdering US citizens. They're very busy on other things. Um, so, Bill, start. How do you suspect these oil executives will be responding in this meeting? Um, because it's a dicey situation for them no matter what, and the price of oil, of course, is not as high as they'd like it to be, right?
So, how do you respond to this rampant imperialism? Uh, if you're a CEO of an oil company that might or might not benefit from this imperialism, uh, I think that the economics of the situation do not necessarily lend itself to these companies wanting to go in there. Uh, it's going to take billions of dollars to apparently fix up the refinery,
Which they also had lost previously, right?
Whatever sunk money, different companies, whatever. Uh, you know, okay, so you give them a heads up early that you're doing this because he loves to court their favor. Uh, but I don't think this is going to be nearly as smooth and as easy. Uh, it never is. First of all, look what happened in Iraq and that was supposed to be over in 10 days, right?
And good for oil companies, similar words actually.
Right, similar words, didn't work out that way and I don't see this working out that way either. Besides, Kara, we are net exporters of oil. Now, why do we need more oil from Venezuela? I mean, this is just this crazy uh hubristic uh ugly uh American behavior that I thought we would have learned from over the decades of doing similar things, especially in Latin America. And I'm not—I mean, obviously if you're the CEO of one of these oil companies, you get invited to the White House by a madman, you know, you go and you listen to what he has to say. But I think as an economic matter, it's going to take a long time before they, you know, raise their hands and say, 'Oh, yes, me too. I want to get in here and, you know, extract this oil because—'
Even if they get a freebie from taxpayers, if he's able to do that at all, right, which is—
Yeah, we don't know the mechanisms about how this will work.
Also, Bill, I was wondering in the era of this kind of Trump administration transactional foreign policy and transactional business policy, can—
Everything's a transaction.
Yeah. So, you can't do a no-strings-attached situation with the Trump administration, even as an oil company, I would think, right? Like, if they're going to—even Nvidia has to give a slice, so like why wouldn't you? And are companies starting to be wary about that.
Totally. I mean, there's—I mean, he said he's going to, you know, seize the oil that has apparently been, you know, ours and locked up apparently and he's going to sell it on the market and control the proceeds of that sale. I mean, he's got his fingers in all these pies. It's this ultimate grift. You know, the Center for American Progress has got a website now that tracks the grift. It's nearly $2 billion since January, uh, since he was inaugurated. This is another part of the grift and I'm always uh very concerned about, you know, you have these big uh exogenous events, you like going into Venezuela or what happened in Minneapolis. What are they doing? What are they trying to deflect from? All right. Uh, is it the rewriting of January 6th? Is it Jeffrey Epstein? Is it, you know, the graph? I mean, taking down the east wing of the White House, the $400 million ballroom. I mean, what kind of crazy thing is he trying to distract us from? It's wag the dog, it's Orwellian, and you know, we're just again, there's no accountability for an oil executive going to that meeting. What I—I have talked to two of them and they're like, 'This is not good for us. The price of oil, you know, they—I mean, economically, it's kind of insane. Why are you going to invest billions of dollars trying to extract oil in Venezuela when we're already net exporters of oil? I don't understand.'
In an easier situation, right?
I mean, the potential there is huge, right? Like they're sitting on the reserve. It's just does this administration have the attention span? Is the country willing to do what it takes to secure a long-term investment? I mean, no one has the appetite for a very long list of things for the reasons you guys everyone has said, which is like the ghost of Iraq and that whole conversation just haunted foreign policy.
So many others. I mean, why are we—I mean, what if the reverse situation were happening? I mean, honestly, what if Venezuela came in, kidnapped Trump and Melania, took them off in Venezuela, and then started saying, 'Okay, now we own Exxon, Chevron, you know, and all the Conoco and all the other oil companies and we're just going to extract all the oil because we want to.' I mean—
I have to—Kara, I want to raise something with you and get your point of view, which is that there's a lot of people who would say all the Trump people really do is overt versions of things that the US has always done covertly. So, the long list of Latin American regime change and interventions, I'm just going to pick a date and go back to like '51 or something. Um, now the only difference is they just do it, right? And instead of us playing this like absurd game with Donald Rumsfeld about oil and whether it's the oil and whether it's not, and then Jim Baker is like, 'Oh, it's definitely—I mean, just nonsense.' Now we just have people saying the thing—
Yeah. And like, is there something to be said for like you're addressing everything more directly? And number two, what is for Democrats? What's their response? What are you going to tell a Venezuelan expat? Like, well, we really want that dictator to stay because we don't like the way they're doing this.
Well, as many people point out, Maduro is an autocrat and a very tyrannical one, right? It's not like I think his own people knifed him in the back. That's my take on the whole thing is Delcy, who looks harmless but is not in any way.
She was head of the intelligence department at one point and she was head of the oil. Like that regime is still there. They're violent. They're repressive. They're turning on each other. And if you're a Democrat, do you just say, 'But uh actually he needs to come to Congress, appropriation something something,' when you have all these people in the country saying we needed the help. Maybe this—maybe we want to thank Trump for doing this.
They do. They do. I mean, but that—it's hardly pointful. He's not the president of Venezuela, so who cares? It's not his job.
I mean, I think a lot of Venezuelans in Florida do like—I think—
Expats who have left, right? They're a very different group of people and people there. I just did a long uh podcast with some historian, uh, David Sanger and some others about this and one of the things that was interesting to me was that there's a real rift between the people who—25% of the population left—and the people who were there and you know, there's a whole—there again, not our country, not our problem.
But we saw this with the Cuban community and the Cuban Republican community, right? Like uh Democrats lost that community for decades after and now the Secretary of State is basically the product of that political lineage.
Right. Exactly. Which is why they're focusing on Cuba next. And but one of the things is I think what you're cringing in plain sight is what you're asking about. They're criming in plain sight. I do think there are—one of the things the response was, 'No one's ever done this.' I'm like, hold my beer. Yes they did. Panama. Yes they did. Haiti. Yes we did. Iraq. Iran. Like Chile. Like yes we did. And except what Donald Trump is doing is not saying, 'Oh, it's a democracy thing. Oh, it's because of this. Oh, it's because of political prisoners or it's because—' he's just saying, 'Yeah, it's the oil.' And then you have Howard Lutnick who seems to be in a bathroom piping up at the minerals like that. I don't think—and I think actually the Trump administration has made—when people point to his grift, they go, 'Well, he's doing it transparently.' Like, so criming in plain sight is better and it's on a scale that's unprecedented. That's really the more interesting part of it. Um, but it's still—it's still stupid. Like I don't know what else to say. It's stupid as Bill pointed out because the price of oil is going to come down, crashing down presumably,
Right? I mean, did he really think this through? I mean, you know, the oil executives will go to this meeting, but to get them to invest billions of dollars to refine or get that oil out of the ground and sell it into a market where the price of oil is low, relatively speaking, and we're already net exporters of oil. Why are they going to do that?
I think that you can't even get a guarantee from the government that they'll secure the workforce that would do this. I mean, there has been—there is no day two.
Uh, why are we invading another country, kidnapping their president so we can take their natural resources?
Yeah, it does happen with the shoe on the other foot. I think there might be a little bit of the old 'if Obama did this.' We're sort of way beyond 'if Obama did this' kind of thing. But in related news, speaking of which, um, speaking of minerals and things we want there and strategically indeed important place, Greenland. Um, now from what I understand from this panel I did, we can go to Greenland right now and put as many bases on it as we want. We could put 300 bases. We had 16, 17 bases there. We closed 16 of them. So we have every right to be in Greenland from a 1950s treaty. So we don't even have to—
'50—like we don't have to do anything. We can just open all those things and like squat, I guess squat in Greenland. I think that's the way—I think that's the technical term for it. Um, so what happens—but it has created this NATO crisis, existential crisis, um, especially if he does something with the military rather than just offer to buy it. Uh, thoughts first Audie and then Bill.
Oh no, I want to hear Bill first. I'm kind of curious.
Economically, is it a good deal?
Look, he doesn't care, uh, as he's proven for years, he doesn't care about NATO. So, if he's provoking uh confrontation with NATO and a way to get out of NATO, okay, fine. Or maybe it's bluster. And I mean, do we need to buy Greenland? As you said, we can do already or allowed to do what we want. It's just another example of this crazy, wacky, uh, imperialistic behavior that is so unbecoming and you would think that we would have learned from our past mistakes in this area and it makes people hate us and resent us, which is part of the reason we got a 9/11 situation is that hate and resentment uh around the world and he's fomenting it without any accountability. Uh, and to what end? I mean, again, if there's a treaty that says we can already put bases there and we haven't done it, well, why not just do that? Why are we provoking uh a confrontation with one of—
He wants to be the first US president to expand territory since whoever it was.
Yeah, that is to me the—
So, he wants to do this his version of Louisiana Purchase, does he?
Yes. Yeah. Yeah. He wants his face on Mount Rushmore? He wants his face on the coin.
On a coin. Yeah. He's building his $400 million uh ballroom. I mean, this guy—
Never going to get built. I'm just telling you, never going to get built. That's my feeling. My thoughts is that, you know, I think it's baffling for all of us because he tends to—first of all, his ideas of foreign policy are often frozen in a particular uh vintage, right? It's like he really does just care a lot about tariffs. He thinks that's the way to do it. So tariffs it is, you know, um, resources and transactional—uh, I think Google called it transactional predation of resources. He sees himself as doing like what China is doing or something like that. Now, of course, it's very different. It's very, very different. And it's often, as you mentioned, Bill, um, undermining our allies. And I think that it is very—it's very difficult to watch in real time the post-World War II world order and systems be not just chipped away, but kind of kicked in the knee. And maybe like retirement.
Yeah, you can go. Maybe like retirement—it was always a myth, you know, like maybe it was never going to last more than 50 to 80 years, but we are witnessing the falling apart of something. That doesn't mean that something else can't be rebuilt in its place, but uh for sure I think that it might be baffling to the average person because you're like, why are we suddenly talking about Greenland? And you can say that almost every week. Why are we talking about X? Why are we talking about—
Let me just add in one of the—Greenland certainly is strategic and there are minerals to be—whatever that kind of stuff.
Under a lot of ice. By the way, Greenland isn't green and Iceland isn't ice. Um, I'd like to point that out.
Anytime. Anytime. Um, but to me, the best economic thing to do from a business point of view is to help Ukraine because that is a country—if it was renovated, they have high technical expertise. Uh, we would—speaking of US benefiting economically, that's our best economic bet to get—
That's like the one thing we won't do.
The Russians out and create a very vibrant, technologically forward—we would make a lot of bank there versus a Greenland or a Venezuela or anywhere else. To me, if that's your criteria is what's the best deal, to me Ukraine is the best deal from an—if you're just going to be that venal of—
Can I raise one more thing that's sort of baffling to me. You have a generation of Republicans in MAGA world, whatever, who were against the Forever Wars. You have Navy SEALs in Congress now, lawmakers. They're there because they were against Forever Wars. They were against our actions abroad and interventions, and they hate the neocons, and they're kicking dirt over Dick Cheney's grave. And I don't understand them right now. I don't know if this is going to be like the fiscal hawks who just sort of like squirm away, you know, and don't say anything about what he's doing. But when it comes to foreign policy, the far right that is against interventionism has lost on every single argument. Like whether it's Iran, whether it's whatever, like he doesn't care what they think about that. There are people—Green has been talking about it. Mass—there's—
Well, she resigns, like leaving never gives zero fs anyway. Like Rand Paul—I mean, it's sort of the same handful of people, right?
Lindsey Graham has gotten his wings again, right?
Um, and all those people who allegedly didn't want intervention are oddly silent in these moments.
Uh, Bill, last question here. Um, is there any economic goodness to this of trying to, you know, buy Greenland?
I mean, for again, first of all, it's so unattractive the way he's going about it and doing what he's doing. Are there economic benefits? There might be, Kara. How the hell are we going to know? I mean, how do we know right now whether there might be economic benefits? First of all, what I mean is if a client came to you and said, 'I want to buy Greenland.' What would be the thing as an investment banker you would do?
I want to buy Greenland. Are you out of your [__] mind? Oh, okay. That's—
Going to piss off one of our best allies to try to obtain this, you know, block of ice, you know, that may have strategic value. And if it's like strategic defensive value, we are, as you said, we already have the right to put bases up there. Why do we close 16 of the 17? Let's open them again or whatever it is. If it's like controlling the Arctic and having a policy matter and a national defense issue. Yeah. Okay. I get that. I get that. But what you want to mine for minerals under—
A mile of ice. Yeah, that might work. Maybe, you know, with global warming, of course, that's not an issue anymore. We're not warming up anymore apparently. So, it's going to be like many millennia before we get under that to a client like that.
You know, I'm curious. I hope that's the way I was speaking last night. One thing, Bill, I think there's so much foreign policy uh action that I think when you look at say the Abraham Accords for the Trump administration, they feel like if you can get people doing business together, that inherently creates the um environment for peaceful interaction, that the money is what is going to make those things work, not arbitrary red lines in diplomatic conference rooms.
Maybe, but it's just been a graft for the Trump administration and the Trump family. It's all been about graft. It hasn't been about opening up.
Grift, but graph too. All right. When we get—we're going to take a quick break. We come back. Uh, maybe Bill's and my favorite topic, Warner Brothers rebuffs Paramount again. No surprise. I'm back with Audie Cornish and Bill Cohan. Warner Brothers Discovery has rejected Paramount's latest buyout offer, urging its shareholders to stick with Netflix. Warner Brothers said Paramount's bid was not superior to the $72 billion Netflix offer for its studios and streaming businesses. The board also flagged the uncertainty risk around Paramount's offer, saying it would effectively be a leveraged buyout, the largest in history. This comes after Larry Ellison stepped in to personally backstop Paramount's offer with a $40 billion equity guarantee. And just a little while ago, Paramount reaffirmed its $30 a share all-cash offer for Warner Brothers. No more, Bill. Um, you've done a lot of reporting on this and let me just add in how Versant—Versant is what I like to call it, um, like Quasant—uh—
factors in all of this. Comcast completed a spin-off of Versent this week which includes MS Now, CNBC and other networks. Versent shares closed down 13% on their first day and now down 29% for the week. Although that is index funds repurposing themselves according to many investors and I think that's correct. All well, Paramount has been arguing that Warner's cable channels stub are worth around a dollar a share. Um, let's talk a little bit about this. Now, Audi works for CNN, which is
Yeah, that's my disclaimer.
is the parent company. Um, I am a contributor to them, but I will be leaving if if Paramount gets it. So, I don't and I don't give a [ __ ] Um, so I'm going to a lot of you may weigh in as you want. Uh, I am happy.
I am literally here to learn on this front.
Okay. All right. [laughter] Okay. Bill, why don't you walk us through this and what happens next?
Sure. Well, the the key point that what just happened was this idea that the Paramount offer uh at $30 a share is the deemed by the board of WBD not to be quote superior at this time. Okay? Cuz if they did deem it to be superior, uh whatever that means, that's a sort of a vague term which comes a lot of judgment comes into that. uh uh if they did deem it to be superior, they could break their merger agreement with Netflix and turn their attention to the Paramount deal. They would owe Netflix a breakup fee of $2.8 billion and then, you know, we'd have the bidding war would begin again. Uh so they they did what you would expect them to do, which was say, why are we going to you know, we've we've got this merger agreement with Netflix. We're happy with it. We think it's worth more, and uh there's no reason at this moment to to change that recommendation. That doesn't mean that they uh if Paramount uh were to raise its bid as it sort of indicated that it uh might do because it said it wasn't hadn't made its best and final offer but yet it hasn't done anything beyond $30 yet that they wouldn't change that recommendation and
they did note they would listen. One of the board members noted that on CNBC like if they want to lob another number over, we're happy to take
they are in what is called Revlon mode now of selling they have to sell the company to the highest bidder. They are required, you know, by Delaware law essentially to do that. And that's why they're constantly re-evaluating this uh these two bids. And once again, they've I mean, there's no difference between uh uh this, you know, the December 4th bid, final bid that Paramount made of $30 a share hasn't changed in a month. So, if if they want to upset the Apple Card here, they are going to have to raise their bid. Now, they may not want to.
You also had noted these fees of uh that Paramount wants more control over uh certain loans and the the there's a lot of money there. Warner Brothers is concerned about the uh way that Paramount would let them operate their own company between signing and closing. And since it's like an 18-month process generally to get this kind of a deal uh uh regulators approval both in the EU and here to get it closed, they need to know that they can operate their business in the normal course. And uh Paramount put several covenants into their proposed merger agreement that would limit the flexibility that Warner Brothers has during that period. And Warner Brothers believes that that would cost them
