Buy or Die - The Compound and Friends Recap

Podcast: The Compound and Friends

Published: 2025-12-19

Duration: 58 minutes

Guests: Bill Cohan

Summary

The episode delves into the intense bidding war between Netflix and Paramount for Warner Brothers Discovery, examining the strategic and financial implications. It also covers the robust performance of U.S. banks and the potential candidates for the next Federal Reserve chair.

What Happened

In an episode packed with industry insights, Bill Cohan, a former M&A banker, joins Michael Batnick and Josh Brown to dissect the ongoing battle between Netflix and Paramount for Warner Brothers Discovery (WBD). Netflix, eyeing its largest acquisition ever, has tabled a $90 billion deal, significantly larger than its previous $700 million ceiling. Paramount, not backing down, has offered a higher per-share bid of $30, compared to Netflix's $27.75, adding complexity to the ongoing negotiations.

Cohan highlights the strategic maneuvers both companies are employing, such as Netflix's $5.8 billion breakup fee intended to secure the deal, and Paramount's counter of a $2.8 billion fee, preparing for potential shifts in WBD's recommendations. The outcome of this bidding war could reshape the streaming landscape, with Netflix potentially boosting its subscriber base to 450 million if successful.

The discussion also touches on the financial health of Warner Brothers Discovery, which has significantly reduced its debt from $55 billion to $30 billion, thereby strengthening its market position. The resolution of a regulatory issue in April 2023 has further paved the way for the company to be actively pursued in mergers and acquisitions.

In the broader financial arena, the episode highlights the robust performance of U.S. banks, which have reached record highs due to increased equity capital and reduced leverage, ensuring they remain in a relatively safe zone. Goldman Sachs, for instance, has witnessed a significant increase in stock price, tripling off its low, while Apollo is actively involved in private credit, holding a substantial portion of assets in collaboration with Citigroup.

The episode also speculates on prospective candidates for the next Federal Reserve chair, with Kevin Warsh emerging as a notable contender due to his connections and public persona. This potential shift in leadership could have far-reaching impacts on monetary policy and economic stability.

Cohan reminisces about his time working on the first Viacom Paramount deal at Lazard, providing historical context to the current negotiations. He notes how the dynamics of mergers and acquisitions have evolved, especially within the media industry, where strategic partnerships and content libraries play crucial roles in market dominance.

The conversation wraps up with a reflection on the changing landscape of media consumption, noting that while the total number of movie tickets peaked in 2002, the decline has accelerated, particularly after 2020. This shift underscores the growing importance of streaming platforms in shaping the future of entertainment.

Key Insights