Congratulations(!!???) to Paramount shareholders – you have won the battle for Warner Bros Discovery (WBD). Your board has done it by throwing the kitchen sink at its target – that’s a sink with a super clever three way tap and a massive waste disposal unit.

You have to read the terms they have offered more than once for them to sink in; it includes paying a daily fee if time slips by, a massive compensation fee if the regulators knock it back, AND it pays WBD’s walk away fee to Netflix. I can’t remember when a deal was ever done on the basis of a bid that the offeree so plainly cannot afford. In a proposal full of eye-popping clauses, the one that will go down in history is: ‘an obligation of Larry J. Ellison and an associated trust to contribute additional equity funding to the extent needed to support the solvency certificate required by Paramount’s lending banks’.

How much confidence can that give to the market or the regulators? But then the regulators are in a Trump administration and he never wanted the ‘pinko’ Californians (Netflix) winning and he looks forward to ‘revenge’ of some kind being exacted on WBD’s CNN.

As we’ve discussed here before, WBD’s overriding asset is that it is the last house for sale on the most desirable street. But, unless you are an oligarch with a substance abuse problem, that’s not an excuse for paying literally anything to own it. WBD are now the car owners who sold to someone they know will more than likely crash it, big time. But they have their cash, so well done David Zaslav.

There was one part of the deal that was routine, particularly in the media business: a firm belief (delusion) that knitting two very moderately performing businesses together will somehow not make one massive even more difficult to manage business but, instead, a paradigm of profit and growth. Never happens.

Looking forward, we can only hope that well-managed more dynamic firms (like Netflix, for instance) will be able to pick up and turn around the commercially and culturally important businesses that will, sooner or later, be shed to keep Paramount afloat.

Other posts by :

1. Ukraine wants its own LEO system
2. SpaceX outlines Starlink cellular delivery plan
3. NAB vs CTIA on C-band release
4. Laser terminals to operate at 100x faster
5. Starlink success in Spain, but South Africa proves difficult
6. RocketLab doubts over Mynaric bid
7. IRIS2 free for government usage?
8. Bank: AST SpaceMobile will orbit 356 satellites by 2030
9. SpaceX launches 600th rocket

Categories: Blogs, Business, M&A, Off Message, People