It is Monday, December 8th. It's a war. As I predicted on this show, David Ellison and his

Paramount studio have gone hostile for Warner Brothers Discovery. This morning, the Ellison sent a letter to

our guy David Zasloff and his board at Warner Discovery, arguing that it's all-cash-thirty-dollar-a-share

offer for the owner of HBO Max and the Warner Brothers Studio is a better deal for the company

and more likely to pass regulatory hurdles. So they're going directly to the shareholders now.

This is days after Warner settled on a deal with Netflix for nearly $28 a share in cash and stock.

$30 is obviously bigger than 28, especially in cash. But remember, Ellison would be buying all of Warner Discovery,

including the low-value cable network CNN, TBS, T&T,

and Netflix has agreed to buy just the studio and streamer.

So the difference in the bids here kind of comes down to how you value those cable networks

that are about to be spun off into a separate company.

Are they worth a dollar a share, like Ellisonison says or three, four, even five dollars a share as Netflix hopes?

The higher the value assigned to them, the more likely Netflix made a comparable bid because it leaves

behind all these valuable assets to prop up the overall value of the company.

The lower the value of those assets,

the more likely the Ellison's bid is bigger with those assets included. Got that? It's a little

confusing. Ellison went on CNBC this morning to plead his case, and Netflix co-CEO Ted Sarandos

happened to be speaking at the UBS conference in New York. So we got a real back and forth in real

time today. We're really here

to finish what we started, Ellison said, and later Sarando's countered by saying the Ellison move was

quote, entirely expected. We have a deal done and we're really happy with the deal for shareholders,

for consumers. It's a great way to create and protect jobs in the entertainment industry.

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