Certainty of cable network spin off is a big plus for Netflix in WBD deal: Lightshed's Greenfield

December 17, 2025 • 5m 0s
Andrew Ross Sorkin (Anchor) 00:00.190
joining us right now is rich greenfield light shed partners you've probably now had some opportunity to go through the document that warner brothers put out you've seen what netflix had to say about it which in your mind is the better deal rich putting aside whether we get to a
Andrew Ross Sorkin (Anchor) 00:16.030
bidding war which i'm sure we will but or we may at least right now
Rich Greenfield (Co-founder) 00:21.590
i mean i don't even think it's close andrew i mean think about the things that you learned in this document i mean just right off the bat there was somebody bidding for discovery global like the cable network piece like so much of this discussion is like oh is it worth a dollar
Rich Greenfield (Co-founder) 00:37.430
is it worth three dollars how will it trade versus versant somebody actually made a bid for the cable network person i don't know who that is like it's not obviously disclosed it's company C in the document but somebody was bidding for the cable network piece to me that changes
Rich Greenfield (Co-founder) 00:53.510
everything like think about how much value this split could unlock i think that was one of the things that really came clear in the document and you heard it earlier in the sam conversation with david is that if you go with the paramount bid you get stuck owning you can't spin
Rich Greenfield (Co-founder) 01:10.070
off the the cable networks the cable network business for both paramount and warner is getting worse and god forbid you don't get approval not only are there costs associated with not splitting at this point but you would get stuck with this asset in twenty twenty seven and who
Rich Greenfield (Co-founder) 01:25.510
knows if you could even spin it off or what that does to you and so i think the certainty of getting the spin done in the in the first half or you know sort of over the summer of twenty twenty six is a very important part of this deal and knowing that there's a bidder that wants
Rich Greenfield (Co-founder) 01:40.470
to buy it means that the value this one dollar versus three maybe it's more than both of those because there's actually a buyer for these assets that no one 's even aware of until they saw this document i think that's a very big deal and then on top of that the fact that on
Rich Greenfield (Co-founder) 01:55.110
december first like that that seminole week when all of this going down the offer that comes in from paramount is this i mean it this pun is intended but it really felt like a house of cards when you looked at like how all of these different you know investors if one pulled out
Rich Greenfield (Co-founder) 02:13.310
the whole deal could fall apart the the the portion that the ellison family was putting in wasn't even clear the ellison 's were putting it in it could be syndicated out to any number of other parties and so it wasn't even clear that there was any money behind all of this in
Rich Greenfield (Co-founder) 02:28.870
terms of like who was actually funding it we've been asking this question now for months is larry ellison writing a seventy five billion dollar check and i think andrew the clear answer is no most of this was being financed through debt levering it to seven times and even worse
Rich Greenfield (Co-founder) 02:46.910
the actual amount of capital that was being put in on the equity side most of it was coming from the middle east because i don't think most investors want to invest in a cable network company levered at seven times
Andrew Ross Sorkin (Anchor) 02:57.750
OK so let me then ask this question do you imagine this turns into a bidding war which means do you think that paramount is going to come back with an upgraded offer and i don't know what an upgraded offer means more money itself maybe they have to given what you're saying about
Andrew Ross Sorkin (Anchor) 03:14.790
this you know the spin and how much value that might have if they come back and say you know what forget about all of these different trusts and other things it's just a a a flat offer here's what it is no strings attached does that do the job
Rich Greenfield (Co-founder) 03:31.150
look if if larry ellison 's willing to sell down his oracle position put it in escrow you know forty plus billion dollars in escrow then i think this might be a different story now look there's still a bunch of like the the operating covenants you know while this transaction is
Rich Greenfield (Co-founder) 03:47.070
occurring they weren't allowed to change salaries of any employees they couldn't make a licensing deal over ten million dollars like there was a lot of very restrictive covenants on this transaction it's actually funny andrew these are things that i think actually were
Rich Greenfield (Co-founder) 04:01.430
problematic when skydance was buying paramount that inhibited paramount from running their business warner brothers basically said no freaking way like there's no way we're going to allow this and the paramount team didn't seem to listen to that those comments from the board
Rich Greenfield (Co-founder) 04:16.670
very different when you read the back and forth between netflix and the board and paramount and the board it seems like night and day and so my point of that that story is i don't think it's simply about going from thirty to thirty two and and having more certainty on the cash
Rich Greenfield (Co-founder) 04:31.520
component i think it's also the entire structure of the deal it was more problematic and so i don't think it's that simple now look paramount comes back with forty dollars a share all cash larry ellison signature he's selling his oracle stock to buy WBD great but the reality is
Rich Greenfield (Co-founder) 04:50.110
the fact that they've had this many opportunities and most of the cash is coming from the middle east and even the ellison piece could be syndicated out to others god knows who