? (Anchor) 00:00.150
oracle 's co-founder larry ellison is going to personally now guarantee more than forty billion dollars for his son 's company in its effort to buy warner brothers discovery for where things could go from here in the saga want to bring in david joyce he's seaport research
? (Anchor) 00:12.910
partners senior media equity analyst this news broke on our air yesterday we talked to jerry cardinal about it all david when you start to think through what happens next we did hear the warner brothers discoveries board is going to take a look at this new amended offer is this
? (Anchor) 00:30.950
a game changer
David Joyce (Senior Media Equity Analyst) 00:33.100
i think it's still another step forward not the game changer yet but it addressed most of the board 's concerns i i think the the the the single biggest piece that still needs to move around and get pinned down is the value of the discovery global equity piece that would be on
David Joyce (Senior Media Equity Analyst) 00:49.800
the netflix side of the deal there could be some tax implications with that there's also the moving pieces on the net so it really i think we need to get the new offer the new financial offer from from paramount skydance in order to to to really move the sword but really the
David Joyce (Senior Media Equity Analyst) 01:12.990
board needs to address what came in yesterday but i don't think yesterday is is going to get paramount sky audience over the goal line so
? (Anchor) 01:21.510
you look at warner brothers right now we're twenty eight seventy six in terms of your mouth given the arbitrageurs that are playing this what what does that imply the ultimate takeout prices
David Joyce (Senior Media Equity Analyst) 01:33.860
so this at this level it's already a dollar more than the netflix deal for just for the warner brothers studio and streamers we think that the global network should be worth in the three and a half to four and a half range so that means that paramount we think would need to come
David Joyce (Senior Media Equity Analyst) 01:52.380
in at you know thirty two at least to to make this more of a equitable offer i think the the movie
? (Anchor) 02:00.980
god bless you david for thinking god bless you thinking that linear TV has a future as we all are here on linear TV right now my question to you is you know we talked to jerry cardinal yesterday from paramount he said he thinks the stub which is what you're talking about is
? (Anchor) 02:15.990
worth a buck a share he said how how could it be worth you know six to a six times multiple to get into that you know three or four dollars arranged given the amount of debt that it has on it and by the way if you're right i i hope you have an even higher valuation of versant
David Joyce (Senior Media Equity Analyst) 02:32.830
well i don't have a six times multiple on on discovery i have the four the four to four and a half times multiple the question is the amount of debt that's on there and the amount of debt that gets paid down in between now and the close with the cash flows from the linear
David Joyce (Senior Media Equity Analyst) 02:48.150
streaming model and and that's and and there's also the the factor of how much ebitda is applied to the discovery side when when the netflix deal was announced and that there was ebitda applied to the warner brothers studio and streamers side than we expected so so we apply the
David Joyce (Senior Media Equity Analyst) 03:09.590
the difference over to the network side so i think that how they allocate you know the the the finance the the accounting the SG and a expenses is also a factor here so there there's there's a number of moving pieces in that variable that would that i think could get you to you
David Joyce (Senior Media Equity Analyst) 03:26.750
know the three to four range on discovery global so that that's that's where there's still some area of negotiation take place