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All Right, the media MN a trade that just won't go away. Warner Brothers Discovery says an amended takeover offer from Paramounts Guidance is inferior to its deal with Netflix and urges shareholders not to tender their shares. I don't know what's going on here, people, but our next guest does Keith wrong, Anathan. She is the media analyst for Bloomberg Intelligence here. Actually, Keith, I thought we'd have something done by now. I mean, these offers are pretty clear.
The value seemed kind of similar to me.
What do you think's going on here?
Yeah?
So this time what Warner Brothers is saying, in addition to the fact that the offer is actually inadequate, this is what they said the very first time when they rejected this thirty dollars bid from paramount You know, they obviously wanted the personal guarantee from Larry Ellison, which they got. They wanted, you know, paramount to raise its termination fee to five point eight billion to match Netflix that also
they got. But now they're saying that they actually really do need, you know, a sweetened bid, So they cite a number there. They say that if they had to terminate their agreement with Netflix, they will also incur you know, obviously they have to pay the termination fee, plus there's going to be significant financing costs, so all of that comes out about one dollars one dollar and eighty cents, close to one seventy nine or one eighty a share,
So they obviously need to be compensated for that. So basically I think, you know, they do need a sweetened offer. And the big thing that they highlight this time around is the amount of debt, so they actually call this a leveraged buyout, probably the biggest one in the history of M and A, and so say that, you know, it just presents too many risks and too many uncertainties and is definitely inferior to the Netflix offer.
Right, the conclusion that it has drawn and what it's recommending to shareholders remains the same, which is go with Netflix's. The Netflix bid having said that, what does it mean that Warner Brothers Discovery wrote this letter to shareholders? Do we get the sense that shareholders are tendering shares to the paramount?
Not so from what we've heard. You know, when it was last reported Scarlett, about five hundred thousand shares were tendered at that thirty dollars price. Remember we have about two point six billion, so we're really very very long ways off. So you know, I think shareholders definitely expect the price to go up. They do, you know, think
that there is going to be a bidding war. The number out there on the street is that David Zaslav is looking for thirty four dollars, as you know, the final offer which he will sign this his company away to Paramount. I'm not sure whether you know Paramount is actually going to raise their offer, but that that is really the number that he's looking for. And we know him. He's he's really a master craftsman when it comes to
to getting the best deal for his company. So again it's it's a way and watch.
We used to call that the final final offer. This is our final final We're not we're not getting any.
So final that we need to say twice.
Exactly, Githy.
We have not heard really too much from Netflix, have we.
So all on Netflix said today Paul was after you know, Warner Brothers Discovery put out that letter, was you know, they said, yes, we continue to you know, work with Warner Brothers. We filed, we're working with the anti trust authorities, you know, we're working with the regulators, and we hope to get you know, the deal down. So everything kind of proceeding as expected from from the Netflix management team.
You mentioned thirty four dollars a share is what David Zaslov is really eyeing. Is there any reason to think Netflix will raise its offer.
Netflix needs to raise its offer, Scarlett, only if Paramount comes back with a sweetened bid, And we do think that they actually will raise their offer. They really believe even though the you know, the market price reaction obviously has been very negative to this whole Netflix deal, just kind of given that it really kind of complicates a very clean narrative. I think Netflix really believes that they're doing this, you know, in the long in the long
they're playing the long game here. You know, this is a great collection of assets. Again, it's not just the cost of doing the deal. It's the cost of not doing the deal, and they obviously do not want to strengthen their competitors. They believe this is a great collection of assets that gives them, you know, tremendous value over many, many years to come. So I absolutely think they will raise the price, but the first move has to be from Paramount.
GITHA part of the Warner Brothers discovery plan before this offer was it was to spin out their cable networks. And that's exactly what Compcast did several days ago, spinning out its cable networks. The company new companies called Versant Media vs NT. That thing is traded off about twenty just in the last few days. Man, what does that tell you about the cable network business and maybe how it might affect these bids.
Yeah, it's it's really bleak. And so this actually strengthens the case for Paramount. This is exactly what they were saying. They were saying, let's buy this whole thing, because you don't know where this, you know, the global networks business and the TV networks is going to actually trade and here we go. Versun is actually just proving their point.
So does not really bode well for Warner Brothers. But again I think still Warner Brothers will continue to have to have the upper hand because again they can argue that their cable networks, again a slightly different business, much larger in scale compared to the version properties, has an international footprint. But again the writing is on the wall, Paula. As you've said many times, I mean that the TV
network business is bleeding, not a slow death anymore. This is really happening fast and furious.
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Nvidia CEO Jensen Wang says the artificial intelligence industry always needs more energy. On the sidelines of the annual Consumer Tech Events, cees Jensen Wang and Siemens CEO roll On Bush spoke exclusively with Bloomberg's Ed Ludlow on their AI partnership.
From Hopper to Blackwell, we increased energy efficiency by tenx. From Blackwell to Reuben, we increased energy efficiency again by tenx. And that translates directly to our customers revenues because in the case of ANAI factory, whatever factory size you have, you're limited by the power.
All Right.
That was Jensen Wang.
He is head of Nvidia and Siemens COO role On Bush, speaking exclusively with Bloomberg's ed La Low of the AI Partnership AD at the Consumer Electronics Show in Las Vegas. Let's get the latest reporting from Vegas. Caroline Hydroids is she's out there. She's the b Tech co anchor for a Bloomberg News. Caroline, it just seems like, you know, you're listening to mister Wog, mister Bush. The need for AI and the spending on AI shows no real signs of slowing yet.
Is that the vibe you're getting out there?
That is very much the vibe we're getting. We heard from Lisa Su yesterday as well, CEO of AMD, saying in the next few years, you're going to have to one hundred x the amount of compute that we currently have. Has stock still falling today, I might add, and so many people may be factoring in this extraordinary scale, which we'd likely to see the compute needs still ramp up. And it's having a marked effect on certain companies stocks like I'm sure you were covering yesterday and into today
sand Disc. It is up one thousand percent from its lows back in April, but it's almost fifty in the first few trading days of the year. This is all about a shortage in memory, memory storage. We are seeing still the fact that we're worrying about energy, as Jentsen says, we're worrying about memory as you're seeing, impacting.
Some Sung stock as well.
We had a Somesung executive on the network yesterday saying, Nook, we're going to have to see a high con prices because supply is just so tight. And yet still people question whether we're in some sort of bubble. But all I'm hearing is the infrastructure just needs to get ever bigger and we kind of need to get on board with that.
Yeah, speaking of memory chip makers, Micron the biggest US memory chip maker, jumping two hundred and forty percent last year and up about ten percent yesterday. So interesting example of that. So Caroline the Consumer Electronics show, Paul and I were reminiscing how once upon a time it met big screen TVs and other gadgets that you know, companies dreamt up but consumers may or may not want to
sign on for. Is that still what's happening at the cees or has it turned into a high level discussion on chips and AI.
I think they're managing to walk both sides. We're still seeing those big unveils and discussions coming from in video CEO from AMDCO, from Quilcom CEO. They're talking about what's inside these electronics or what's inside the compute that is
needed to foster these electronics. But then you have Samsung, which is very much on the AI train with its chips, but also unveiling the latest, greatest Samsung frame or the latest TV that has you can see all around the curvature of it, or the fact that they are still trying to think about how your home is going to be connected, how your television is discussing, discussing with your oven as to whether or not the food is cooked, and you get in between messaging between the two. I
mean there are companies that still continue to unveil. They're also the ludicrous. I mean there's lollipops that play music as you eat them, There's little toys, everything that seems to be about AI and about companionship is something that just seems to involve some sort of cuddly toy that talks to you. But apparently cute is the way in which we're going to go forward. But there are the vacuum cleaners, there's the massoles chairs. It's still very much
has this idea of pushing the innovation forward. And the main thing, guys, I cannot walk without seeing a humanoid robot or some sort. So we're gonna have some big interviews a little bit later. We got Boston Robotics, for example, coming on the show, and that's really Boston Dynamics in fact, which has a huge new unveil of its latest humanoid.
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Well, there have been lots of big games in the lead up to the Super Bowl, and of course there will continue to be as we head in that direction. So let's bring in Brian Eggers. He covers everything for us, from the gaming companies to the lodging companies to the cruise ship companies. See your gaming and lodging analysts here at Bloomberg Intelligence. And Brian, you and your team have done some work and how Draft Kings is positioning itself for the NFL playoffs.
Yeah, so, DraftKings and Fandel, among other things, recently rolled out these prediction market apps which are separate from their sports books.
And this is really to.
Coldpeep our head on against call She and Robinhood and other of these financial firms that offer these event contracts in a number of states.
How big is it?
I'm hearing more and more about this prediction market market. How big is this that?
I mean, this is potentially really large.
I don't have numbers in front of me, But the key thing is that call She and Robin Hood are trying to do this in all fifty states. They're about a dozen states that either hold them cease and desist because they effectively are engaging in illegal sports betting according to the states, or a couple of states have warned DraftKings, fandled don't do the same thing.
If you've got a sports book license.
So what DraftKings and Fandal did is try to go into states with this product where they don't.
Operate sports books.
They can do prediction markets on politics or entertainment events in any state, but the real issue is with respective sports.
That's where they limit themselves.
Let me ask you dumb question, and maybe we don't know the answer to this yet. Who is the target audience for a sports prediction market versus a sports contract and in production market setting versus you know, just a regular parlay or simple bet.
In recourse, the type of person in terms of the
type of area or territory. Think about the fact that you've got mobile sports books in almost thirty states, with thirty some odd states Draftings, Fandel and twenty five of them other states, big states like Texas and California that don't have legal sports books in sports betting, that's a logical market for call She and Robin the do go in there and say you can do these prediction markets and engage in that even though sports betting isn't active and legal in the state.
That's really the big.
So what would Texas and a Florida say about that?
Right?
So, without going through every state.
There about a dozen states that either specifically told call she and poly Market or Robinhood ye see and assist on do this. A few others have issued Wetter's warning Draftings of Fandel do not offer a sports prediction market in a state where you've got a sports bet license. So what Fandom and Draftings did is you know, seventeen states for Draftings five or Fandel. They're offering this product in states where they don't have sports books, and we're sports betting isn't quote legal.
Who regulates the sports markets, So it's confused.
It's very confusing because the sports books are regulated by state gaming regulatory authorities. The prediction markets are regulated by the CFTC, so it's state versus federal. And that's been the argument of Kolchi that you know, we're a financial futures contract, we're not sports betting. We are federally regulated. The states have pushed back and said no, this is a form of effectively on licened sports betting, and ultimately
I think this heads to the Supreme Court. That's certainly in the view of Eliott Stein or litigation analyst.
So what are the casino companies say these days? What do they say, does that impact their sports book and their sports betting?
And on the margin, to the extent that MGM and Caesars have mobile products, it's very possible to look into this type of product as well. Again in those states where sports beinning isn't legal, so.
Everyone's going to be think about it.
And the real other other wrinkle is Texas and California once they realize we may not have sports betting. What we have effectively sports betters. If you believe that's what prediction markets are, we might as well legalize it. And so there's a whole bunch of ramifications to this.
What about Native American tribes in states like California in Connecticut, where do they fit it?
I mean in California, although sports betting isn't legal in California, the tribes have themselves challenged and through legally the Whites of KAlSi and Robin Hood I don't remember which one. So you know to the extent that tribes have opportunities to operate sports books, which effectively Florida has the Seminal Tribe operating operating hard rock betting site even though draftings
and or are not involved. So the tribes very much, will care to the extent that this is effectively a competing product as consumers might perceive it.
So is betting just going crazy the total dollar not.
I see kids, high school kids having conversations in detail showing a level of expertise which really blows me away. Kids high school kids, and I don't know, it just doesn't feel it's surprising.
And it also gets very problematic when you have college kids college games.
Yeh, college players.
So but yeah, there's a big national draw to that draw to this, and I think the real I don't think draftings of fand will get as affected as some might fear in states where they've got a sports book, but in states where they can't operate a sports book. But Kyll she and Robinhood and Polymarket others are offering prediction markets. That's where I think they see risk as well as opportunity.
Brian, what about the sports leagues, the NFL, the NBA, the NHL, the MLB. How do they fit into all this? I mean, are they're going all in with the prediction markets?
Well, I think so.
They're watching obviously with interests. I mean, the major principles in terms of where there's heads are state regulators versus federal regulators. State's issuing in some cases seas and desist orders.
It.
Ultimately, because there's a lot of ongoing court cases, many on appeal, the Supreme Court is the logical destination for the legality of this.
But I mean that's the good reason. Maybe years away, depends on the urgency.
I know Elliott Stein believes that could happen potentially as early as twenty twenty six, that there's a decision, but we don't know. But ultimately, I think this it needs to be qualified and resolved as to who has jurisdiction here.
It is crazy the amount.
I mean just a few years ago, I mean, you wouldn't even have thought this, But now you get sports teams in Vegas.
Yeah, I mean, yeah, so they I think my way to start this is the leading up to the presidential election. There was a lot of activity on one and polymarket about who we win the election, and that kind of kicked off awful water popular interest in this, which means that's when they became involved in sports prediction markets actively a year ago.
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We'll get a story here today.
Alaska Airline ordering Boeing Company aircraft including one hundred and five narrow body seven thirty seven Max ten models and five Trip seven eighty seven wide body aircraft. So good day for Boeing. This stocks up about eight tens to one percent. Stocks up about thirty four percent over the trailing twelve months. George Ferguson joins us here senior Aerospace, defense and airlines analyts for Bloomberg Intelligence. George A, is this this seems like a nice day, a good order for Boeing.
How are they doing out in the marketplace?
Yeah, I think it's a It was a nice kickoff to the year. As far as orders look through, we've tracked them through November of last year. We get to see December order and deliveries from Boeing or Airbus. But through November of last year, Boeing was beating Airbus in the order game for the year, and so you know, we had sort of expected this or there were some
core customers. I think that we're probably sitting on the sideline watching the sea if Boeing was going to get its troubles behind it before it placed orders, and so we saw a bit of a bounce back last year in twenty twenty five. Is Boeing sort of pulled in
a bunch of those orders. I think if you're an airline, you know, and you're sort of fleet planning, when you have backlogs that are ten years large for the for the most important airplanes, for the narrow bodies, you kind of got to be sort of in the order mode, you know, every year or so many years, sort of tapping up orders to make sure that you have airplane is coming regularly as either you're expanding or things leaving your fleet. So good to see Alaska do it again.
We think Boeing a lot of Boeing customers caught up last year. This year probably a decent order year as well as that catchup continues for Boeing. And this was a core customer for Boeing. Alaska has been a core Boeing flyer. They recently bought Hawaiian that added a bunch of Airbus aircraft to its fleet, not a lot, but a bunch of them, a handful of them, actually more
than a handful of twenties or thirties. And I think another indicator that they've kept this Alaska have kept the Alaska Airlines as a core customer, and I would see them kind of going to a more pure Boeing fleet in the future as they ease out some of those Airbus aircraft.
It seems like a big order for Alaska. Is this signal any change in strategy or what's going on there?
Well, I think it's pretty interesting, right Alaska they're seven eighty seven dash. They think DASH tens altering when they buy them. With the biggest seven eighty seven, they've got an order for fi of them. Alaska traditionally had been just a narrow body kind of US but really West Coast focused airline. Since they bought Hawaiian, they've added international routes. Clearly they added Hawaii Hawaii Hawaiian had routes into Asia
where there's a fair amount of demand for Hawaii. Alaska looks to be trying to grow into a global airline. They've got European service now too, So this is I think a continuation of that push by Alaska to be what it wants to be when it grows up. I guess which is going to be maybe another one of the big, big US full service carricers.
Is there room, George, do you think for another US full service carrier?
I think if you do it well, there probably is, right. I think, look, got you got Southwest coming as well. Southwest is adding premium seating. They're already pretty.
Large in the US.
They don't have much international, but Southwest is definitely a force to be reckoned with. But they're leaving the old world where they were very much a pure fleet and they could control costs well, going again into the you know, sort of premium and making their operations more complex. Alaska kind of come in the other way. They already have
premium now trying to go global. I mean, I think going back to Alaska, they've got to figure out what they want to be when they grow up, because I don't think they can survive just as a largely West coast airline. I think Hawaiian was the beginning of that expansion strategy, which included long all this, uh, these following orders I think reinforced to me that's the direction they're going. They're going for a global airline.
You know it's going to.
Take a while to get there, but that's what they're going for.
Would regulators ever allow, you know, the combination of all Alaskan Southwest for example.
You know, that's to me, I think anytime you get some of the big carriers involved in buying somebody, I think it gets difficult.
I think it's gonna I think it would be hard. I think it would be hard.
I think Alaska I had to look at something maybe smaller or you know, Southwest. I think would be difficult to do an acquisition, maybe a very small acquisition. But if Alaska's getting together with somebody, I think it's kind of jet blue and down.
What do you think here of just in twenty twenty six air traffic?
Air travel? How do you think that's going to shape up this year?
Yeah, So we see a lot of additions to premium to premium carriers, and we see carriers adding premium seats that weren't traditionally premium carriers. So to us, it feels like premium could be under a bit of pressure as we get into the into the new year or twenty twenty six here because it looks like a lot of people go in that direction. That's where that's where the earnings have been driven lately. Loyalty programs super important. Basic economy.
World looks like it's starting to right size. Things could get better, but it will take a little time.
I think.
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