The Town with Matthew Belloni Paramount Isn’t Giving up Warner Bros. to Netflix Just Yet
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Dec 18, 2025 In this discussion, Gerry Cardinale, founder of RedBird Capital and expert in media buyouts, reveals why Paramount's $30 all-cash bid for Warner Bros. outshines Netflix's offer. He argues that Warner's narrative about the deal is misleading and emphasizes the cash advantage and cleaner regulatory outlook of their proposal. Cardinale also touches on the role of Middle Eastern investors, Larry Ellison's equity backing, and the potential negative impact of Netflix's bid on market competition. His insights provide a fascinating look into the dynamics of Hollywood acquisitions.
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All-Cash Offer Beats Complex Stock Deals
- Gerry Cardinale argues Paramount's $30/share all-cash offer is mathematically superior to Netflix's mixed cash-and-stock proposal.
- He emphasizes that Paramount's bid avoids valuation extrapolation and offers clearer certainty to shareholders.
SpinCo Debt Can Erode Shareholder Cash Value
- Cardinale highlights the uncertain value of the spun-off networks and how leveraged debt shifts harm studio value.
- He shows that moving debt onto SpinCo can reduce cash paid to shareholders and squeeze studio value.
Verify Trust Backstops, Not Just Personal Guarantees
- Cardinale insists an equity backstop trust is standard and provides closing certainty, so clarify commitments directly with counterparties.
- He advises that firms should verify trust-backed commitments rather than demand personal guarantees.