Alison Stewart: This is All Of It. I'm Alison Stewart, live from the WNYC studios in Soho. Thank you for spending part of your day with us. I am grateful that you're here. I'm also really grateful to those of you who have donated blood as part of our partnership with New York Blood Center. It's happening right now downstairs in The Greene Space. I just donated, and I was rewarded with a bag of pretzels. When I left, they said thank you very much and thank you for saving a life, which meant so much for me and my family and for other families out there in our area. The blood drive continues until 2:00 PM. Come on by.

Here's what you can listen to on the show while you're donating blood or eating lunch or doing whatever you're doing. Actor and comedian Leslie Jones will be here in studio to talk about her new comedy special. We will speak with writer Amanda Fortini about her article, Is Gen X Actually the Greatest Generation? Yes, we will take your calls, and we will hear from actors Keanu Reeves and Alex Winter who are currently starring in Broadway's Waiting for Godot. That's the plan. Let's get this hour started with some big media news.

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Alison Stewart: The iconic Warner Bros. Logo with the shield and the big initials WB now stands for "Who's Buying?" On Friday, we learned that Netflix and Warner Bros. had struck a deal for the streaming giant to acquire the stalwart Hollywood media company. Netflix would pay $83 billion to own the movie studio, its streaming service, HBO Max, and all the intellectual properties therein, like Harry Potter and Lord of the Rings. Then some drama, yesterday, Paramount, AKA Paramount Skydance, we'll get to that, mounted a hostile takeover bid, offering a bit more money and throwing Warner's cable channels into the mix, which includes CNN.

Warner Bros. is one of the big five film studios alongside Universal, Disney, Sony, and Paramount. Whoever manages to seal a deal, it will have major consequences for the future of Hollywood. Here to explain how this all got started is Hollywood Reporter's Global Business Editor, Georg Szalai. Hi, Georg.

Georg Szalai: Hello, Alison.

Alison Stewart: Listeners, we want to take your calls as well. If you work in the film industry, how are you thinking about this news? What could it mean for the work that you do? Help us report this story. Our number is 212-433-WNYC, 212-433-9692. You can call in and join us on air, or you can text to us at that number as well. 212-433-WNYC, 212-433-9692. Last Friday, Georg, you published an article with this headline, "It's official, Netflix to acquire Warner Bros. in deal valued at 82.7 billion." What was your original story that you wrote, and then how did it shift yesterday?

Georg Szalai: There have been a lot of moving pieces. It was an earthquake. We knew that Warner Bros. Discovery was in the final stages of assessing a few bids they had received, but we didn't expect things to come to a halt this quickly and Netflix to come out on top. Then quiet for a moment, and everybody's just taking a deep breath in Hollywood, feeling that earthquake and thinking, "What is this going to mean for me and for the rest of the industry?"

Then a lot of activity happened. I think we had 10 follow-up stories in the first two hours, everybody reacting to it. Then Paramount yesterday coming out and saying, "Hey, we have more to offer. Our offer is better. Shareholders go with us rather than with Netflix." It's really turned into a big rumble, not in the Bronx, but in Hollywood, a Game of Thrones, which is ironic because Game of Thrones is one of the big franchises that HBO Max also controls.

Alison Stewart: When was the last time we saw something like this Paramount bid in the media industry, this hostile takeover bid?

Georg Szalai: There were a few bids years ago, before Fox got acquired by Disney, which was the last big unification of two big studio players in Hollywood. There were some friendly bids, some hostile bids. Comcast was angling to get that, some other players were considering it. Usually, what they tried to do in Hollywood, because there's a lot of egos, as you can imagine, in Hollywood, a lot of creatives, but also executives who don't like to look bad. Everybody's trying to do this in a friendly way. The fact that Paramount felt the need to come out and pound the table and pound the chest and go, "Hey, go with us," tells you just how valuable and venerable the Warner Bros. studio is.

Alison Stewart: Yes, let's hit the scene. Warner Bros. is considered to be one of the big five movie studios. It's really an institution in Hollywood. Listeners will also remember the recent Discovery merger, the various names of its new HBO Max, Max, whatever it's called. How did we get here? Why is Warner Bros. up for sale?

Georg Szalai: The interesting thing is, I don't know if you remember, before the current owners, AT&T, the telecom company owned the Warner Bros. studio. The idea at the time was, "Oh, if we combine telecom with content, maybe we can get content out to people in all these new ways." The traditional pay TV, but also in mobile, and who knows what other technologies might be around the corner. Of course, that worked out a little bit like the AOL-Time Warner merger, which people still think is one of the worst mergers in history. Basically, what AT&T had to do is unload it. The acquirer was Discovery, run by David Zaslav, who's the current CEO of Warner Bros. Discovery.

The idea was Discovery owned all this factual content, all these reality shows, and other things. They said, "Oh, maybe we can combine that with the factual and the scripted and imagined stuff to create a new powerhouse." Things haven't quite worked out as well. They took on a lot of debt in that deal. That didn't help. There have been some other changes in user behavior after the pandemic. Netflix has been widening its lead. In the end, a lot of players started thinking, "Oh, we need to catch up with Netflix." That's why Paramount, but also Comcast, started making bids for Warner Bros., only for Netflix then to come in and say, "We already have a lead in this. Why don't we buy this?"

Alison Stewart: Yes. When we talk about Warner Bros. like it's one big entity, what are we talking about exactly? What companies and brands encompasses Warner Bros.?

Georg Szalai: They're one of the big producers of TV and film content. Some of that gets released by Warner Bros. Discovery Networks and streaming services and studios like some of the big ones, Barbie, I think most people have either heard of it or seen that film. The Sopranos, still one of the big HBO Max hit franchises. Even though it's fairly old by now. People still watch this a lot. Big Bang Theory, Wizard of Oz.

The idea was that Netflix could maybe get some of those franchises, add them to their service, say, "Hey, now, you don't only get Stranger Things and Bridgerton and Wednesday, but also all these historic franchises. Maybe we'll create new shows, new films based on those characters, and you'll get more of what you like." Basically, a way for Netflix to say "Stay with us. You don't even need to look elsewhere. There's so many streaming and other services. Just stay with us, watch our stuff until you fall asleep."

Alison Stewart: We've learned that Netflix has struck an $83 billion deal to acquire Warner Bros., as happened last week, to acquire its studios and all its intellectual properties. This week, Paramount complicated that plan. We're talking about the implications and ramifications with Georg Szalai, global business editor at the Hollywood Reporter, and we are taking your calls. If you work in this industry, how are you thinking about this news? What could it mean for you at work? Our number is 212-433-WNYC, 212-433-9692. How did Netflix's bid emerge as the winner last week?

Georg Szalai: That's been widely debated on Wall Street. Yesterday I spent a few hours talking to people about this. Basically, the Warner Bros. Discovery board looked at all the offers, and Netflix is offering to buy everything but the TV networks business of Warner Bros. Discovery. Paramount is offering to buy that as well. Paramount says, "Well, our deal is superior because first of all, we're buying everything and taking things like CNN off your hands," which-

Alison Stewart: We'll talk about in a minute.

Georg Szalai: -is always a big talking point. You even hear the president obviously taking shots at that network sometimes. They said, we're buying everything and we're offering everything in cash. Netflix, on the other hand, wants to leave the networks behind, pay cash and stock. They are saying, "Oh, you have a better outlook if we buy it because we have all this tech infrastructure, there's more upside, and the networks division can be run separately and maybe create value. Shareholders can continue to own a piece of that, and their suggestion is they can do better, and so there's more value in it."

Paramount says, "Well, cable networks are struggling. They used to be the profit engine of Hollywood. They're not anymore in the streaming age. The value there will just keep declining. Why would you not want to get rid of that?" It's a little bit of who do you believe? What narrative do you believe in more? There's a lot of chest-pumping right now and saying, "You should believe us rather than the other guys."

Alison Stewart: Yes. Netflix's CEO said of himself, "I know some of you are surprised that we're making this acquisition, and I certainly understand why. Over the years, we have been known to be builders, not buyers." Why would Netflix want this deal?

Georg Szalai: That is actually also one of the questions that some people on Wall Street and investors have been worried about. You saw the stock of Netflix taking quite a big hit after this deal was announced. Like Ted Sarandos, the co-CEO, said, the biggest deal they ever made was basically worth less than $700 million. They bought the Roald Dahl Estate's rights to the Roald Dahl stories. Buying something this big was never on tap for Netflix.

The management says, "Oh, this is just a once-in-a-lifetime opportunity." If you can buy all these crown jewels of Hollywood history and offer them to consumers rather than having to license them, maybe, or never being able to show them. They say it's a once-in-a-lifetime opportunity. Some critics are saying. "Is this maybe a sign that Netflix worries about all the rising competition from TikTok, from Instagram, X, all the short-form video?"

A lot of young-- I'm in my early 50s now. I don't even know that-- I use those platforms, but I know younger people who use them first thing in the morning, last thing at night, and did TikTok through the day and through the night. Maybe this is a sign that Netflix worries, "We need to get bigger with all the premium content. We have to compete with those people."

Alison Stewart: Let's take a couple of calls. Sam is calling in from Brooklyn. Hey, Sam, thanks for calling All Of It.

Sam: Thank you. My question is, I believe the Trump administration has the final approval of whatever sale happens. How is it complicated that Jared Kushner's hedge fund is part of the hostile bid?

Georg Szalai: Yes, Allison, do you want to take this?

Alison Stewart: No, I'll let you take that.

Georg Szalai: Yes, Sam, that's the million-dollar question right now. Donald Trump has said, I will obviously have a say in this. The FCC antitrust regulators will look at these deals. Netflix is widely considered to have the rougher ride to the regulatory review process. Management has even said, we think this might take up to 18 months because there's the concern that they not only combine two big streaming services, but also the production and creation of network shows of films. There's vertical and horizontal concerns.

It probably will come down to who can make the better argument what to compare the market power the new company will have to. Netflix has been early on saying, we compete with all these people and all these companies out there that are emerging as power players like YouTube, TikTok, those are all getting all this engagement. Engagement is a big new buzzword in Hollywood that everybody's looking at how much time of the day do you spend with something?

They are arguing, people spend more time with YouTube, TikTok, and those guys than with most of the other platforms. We need to own more. Critics of Netflix will say, "Oh, let's just compare it to the traditional movie theater and TV content business." I think it will depend on who can make the better arguments, that will decide who will win out.

Alison Stewart: Let's talk to Beth, who's calling in from Brooklyn. Hey, Beth, thanks for calling All Of It.

Beth: Oh, hi. How are you?

Alison Stewart: Doing okay. You're on the air.

Beth: Yes, I work in the-- I'm good. Although I work in the television industry as a producer. I've done it for about 25 years. You're asking for input from people who work in the industry and how these mergers have affected us. I don't think it's any secret, but it's been pretty disastrous, like, catastrophic for people who work in the industry. There's just so much less work.

I've been pretty fortunate, but I know people who've had to decimate their savings, move in with their families. People haven't worked in a year. I mean, along with general downturn, the mergers have cut in half or even by 75% the amount of shows they're commissioning. People who've made a living in this industry for a long time really aren't able to anymore. Been pretty brutal.

Alison Stewart: Thank you so much for calling in, Beth. What about people who work in the industry?

Georg Szalai: Yes, that, Alison, I think I've been getting a lot of questions in the last couple of days from people I have not heard from in maybe six months or a year, for exactly that reason. Everybody, after they announce a merger, always says, "Oh, you know what? We're going to try and keep things as they are as much as possible." Then you do know that part of the benefit of any merger is the cost reduction.

Yes, in general, the expectation is that a Paramount deal would probably mean more layoffs because Paramount has more of the overlapping infrastructure of TV networks and film studio than Netflix, and Netflix will probably retain some more, but you would expect there to be quite a lot of jobs being cut either way. That's one of the things that they always mention as one of the benefits, so to speak, of a merger. Reduce the cost and then create new opportunities for creating new shows and new films.

Alison Stewart: We're going to talk more about Netflix's big deal. It struck $83 billion to acquire Warner Bros., but Paramount has entered the building. We'll talk about it after the break.

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Alison Stewart: You're listening to All Of It on WNYC. I'm Alison Stewart. My guest is Georg Szalai, global business editor at The Hollywood Reporter. We're talking about Netflix's deal to acquire Warner Bros. until yesterday, when Paramount announced a hostile takeover. This is a really general question. What makes the takeover a hostile takeover?

Georg Szalai: No, it's a great question. Basically, how bidding works in businesses that a company says, "We're up for sale. Send us your offers." Then the board of a company reviews those offers and says, "Hey, we think this is the best offer. We're going to recommend this to shareholders." This is what Warner Bros. Discovery did with the Netflix bid. Then Paramount came out and said, "Well, hang on a second. We think our offer is actually superior to that of Netflix, and here's why." They went hostile, meaning they're talking directly to shareholders, Warner Bros. Discovery, and saying, "Sell us your shares. Here's what we're offering. We think our deal is better."

The argument is mostly, there's more cash immediately. The review process would probably be faster. Just go with us. I expect shareholders to sit back and wait because there's always the hope that there's a big war of words. There's hope that maybe one of the two companies will have to come out and sweeten the bid. Paramount might come back in a few weeks, maybe in the new year, and say, "You know what? Actually, we're going to offer you even more because we really want you to go with us."

Alison Stewart: They might come back with a different offer.

Georg Szalai: Yes, that would be called a sweetened offer. A sweetened bid. If not enough shareholders are convinced by the current offer, they might be like, "You know what? We throw in a little bit more."

Alison Stewart: What about the Paramount bid? What do you think of it? Is it competitive? Is it a strong bid?

Georg Szalai: Interestingly enough, people on Wall Street can't even seem to agree. I've had a couple of people say we think the Netflix one is superior. The other people have said Paramount is superior. It depends a little bit on the financial side. It depends a little bit on whether you include potential timing delays of a merger close and whether you include other risk factors. Overall, they all seem to think that financially, it's more or less comparative. Then it's just down to what do you believe creates more value in the end? It's kind of a flip a coin case right now.

Alison Stewart: Let's talk to Eliza from Brooklyn, or Elisa, are you there?

Eliza: Yes, I am. Can you hear me okay?

Alison Stewart: I hear you great.

Eliza: Hi. Thank you so much for having me. I'm a second-generation IATSE Local 52 union worker here in New York City. The industry over the last few years has shown between contract issues, and that's for like any of the union chapters across the nation with strikes. We've even seen deaths that it seems that the entire industry is going off the rails with no conductor at the controls.

Unfortunately, the people that will be hurt the most by all of these changes are the below-the-line workers, like my family, my husband, my father, my brother, his family, all of our friends. These individuals work 14, 15 hours a day in winter in dangerous locations sometimes. We're just nickel and dime from things ranging from how many meal penalties they'll avoid, how they'll manage our insurance and pensions. Unfortunately, it also gets dropped as far as safety goes on set. These huge mergers don't really tend to offer us any more artistic expression, any better benefits, quality of life, or good content for people that's going to be watching it.

It's really only to line the producers of these other rich billionaire people, and they're able to use all of banked footage that they now even have and plug it in so that they can reuse the same skyline shot but use it for any Marvel universe they want without needing to hire any actual stagehands or camera operators.

Alison Stewart: Yes. Thank you so much for calling in. I mean, when you think about it, Netflix is a streaming giant. Paramount is one of the five big studios in Hollywood. When you think about a merger with Warner Bros., how would it reshape the way pictures are being made?

Georg Szalai: One of the things that Paramount did in its hostile bid was appeal to people in Hollywood directly, including to maybe people working below the line, saying, "Hey, we want to put out more films on a combined basis. Netflix will probably keep things the way they are, maybe not even bring as many films into movie theaters." There is some concern there that Paramount has been trying to-- Its argument was basically, "We're better for Hollywood and people working in Hollywood."

I think the big concern is, in general, like our caller said, that the people who often get forgotten-- everybody always remembers Brad Pitt as the star of the film. Then people forget that there were woodworkers behind the scenes creating the wonderful scenery and stages, and all the sound people and other technicians you need. I think those people will have the biggest worries because players getting bigger always means that their leverage declines even further.

Alison Stewart: Yes, I think it was Darren Aronofsky who said there are fewer people to bid to.

Georg Szalai: Yes. Even Darren Aronofsky is somebody who's a well-established, well-known creator. You would think, "Oh, a guy like that probably doesn't need to worry about this." Even he worries that if he has few people to talk to, he might not get his next movie idea made.

Alison Stewart: Let's talk to Edith, calling in from Manhattan. Hi, Edith, thanks for calling All Of It.

Edith: Thanks. Great show. I love it. I have to say that I'm one of the last few remaining dinosaurs that has not cut the cord. In fact, I mostly watch it. It seems to me that-- You had mentioned this before, but that Netflix and Paramount/Skydance have different ideas in terms of what they're going to do with the cable channels, where Netflix is saying for now that they're going to keep most of them, they're going to take a few of them.

Paramount is saying they're going to take the whole shebang. Does that mean that-- that means cable's already struggling, will that be the death of cable? Also, every show is going to be sent to streaming now, which they've already started doing, but I won't be able to see the things I like on cable all in one place, which, from one to the other, without having to pay for every single streaming service. Yes, it's already happened to some extent. They used to have Only Murders in the Building, and then they switched that to streaming. I'm just wondering, do we have any idea? I know we're mostly focusing on the movies and stuff, but I happen to really watch cable TV.

Alison Stewart: Do we have any idea about cable TV where this fits into the merger, Georg?

Georg Szalai: Yes. I think if Netflix walks away with this, they will leave the networks to be run separately by basically part of the management team of Warner Bros. Discovery right now. They would probably look for their own way of cutting costs, maybe merging their networks with other network groups, and then maybe reducing the number of networks and figuring out how to maybe use the same content across multiple networks, because we don't want to spend too much on all these different brands.

I think there will be a further reduction in the number of networks and shows over time. One of the things that we've seen has been quite successful in different parts of the world, including in the US is when you show AMC Networks, for example, has done this quite a bit where they show a show on the cable network, also on the streaming service, and then they maybe license it to another TV network holder and they get it later.

You can maybe watch some Walking Dead spin-off on AMC, the cable network, and then you can watch it on the AMC+ streaming service. Then maybe somewhere down the line, you can watch it on another network to basically turn on more people to that and reach more people and say, "Hey, look at this." Usually, that's done to get you to sign up to the existing streaming services or the original cable home. I think our caller would hope more that she would get more just because she likes to watch things, and she enjoys sampling stuff.

Alison Stewart: I have two more questions for you. The first is about CNN. If CNN becomes a part of this merger, who runs it?

Georg Szalai: If Paramount wins out in this bidding, it's going to be interesting because David Ellison, the CEO, and his father, Larry Ellison, you know him from Oracle, probably. They're understood to have a good relationship with the White House, with Donald Trump. In the industry, a lot of people are saying, "Oh, if they bought it, they would probably look to completely change the management structure, make it different so that it doesn't constantly play the role of a punching bag in politics." That would be the one way you see change. If Netflix wins out, it just stays on its own, and we'll have to see what happens to it.

Alison Stewart: Ever since I've been in the news forever and a day, there was always rumors that CBS and CNN would combine, and that could happen under that.

Georg Szalai: If Paramount gets it, Paramount already owns CBS.

Alison Stewart: Exactly.

Georg Szalai: That would happen. Then the question is, do you-- Some people have long said they should merge or at least they would at least cooperate very closely on the news side. That is a whole new Pandora's box that people are wondering about.

Alison Stewart: If this big five studio can be taken over by a streaming giant, by one or more direct competitors, could there be another one? Should we expect Universal Pictures or Disney, or Sony to be cannibalizing each other? Is that possible in the future?

Georg Szalai: I totally expect if whoever wins this asset in Warner Bros. Discovery, it will set off all sorts of talks, especially if Netflix wins it, because then people in Hollywood will be a big Game of Thrones, like, who's going to be lining up behind Netflix because right now, you have Netflix as widely considered a big leader in entertainment. You have Disney, which is considered big and stable. Then, below that, everybody else has been seen as moving parts, moving pieces that could be part of various deals.

Somebody said to me last night, "Georg, we might have not thought this a few years ago, but there might only end up being two or three huge entertainment conglomerates at the end of the day."

Alison Stewart: Don't say that.

Georg Szalai: We have to see if regulators would allow that. That would obviously be something that would cause all sorts of further headaches for people in the industry and fans of entertainment.

Alison Stewart: Georg Szalai is the global business editor at The Hollywood Reporter. Thanks for sharing your reporting with us.

Georg Szalai: Thank you for the time.