Rich Greenfield

Netflix dropped out of the bidding for Paramount despite having the capacity to close the deal if they wanted to. This demonstrates extreme capital discipline. Netflix realized the price (moving from ~$30 to ~$31.50+) and the leverage complexity were too high. They are comfortable continuing to build their business organically without overpaying for legacy assets. Bullish signal on management's discipline and confidence in their standalone organic growth strategy. Slowing organic growth could eventually force M&A at higher prices later.

Comcast's spin-off of NBCUniversal will unlock significant value because the media assets, particularly the theme park business, have been trading at an unjustified 4-5x EBITDA multiple within the conglomerate. The standalone entity will re-rate higher, and the separation also gives Comcast more optionality for future deals, including a potential Charter merger.

Skydance is acquiring Paramount, and the board has accepted the deal. Rich estimates the final value will be ~$31.50 per share by the time it closes in Q1 2027 due to ticking fees. The deal provides certainty and a path to deleveraging. Under Skydance, Paramount can shift from a constrained, debt-heavy entity into "investment mode" (e.g., UFC, South Park), which was previously impossible. The acquisition unlocks the ability to invest in growth assets by fixing the balance sheet. Regulatory delays (e.g., California AG) could extend the closing timeline beyond expectations.

Rich states that CEO David Zaslav's decision to split the company (separating assets/strategies) was an "incredible decision." This strategic move (and involvement in the M&A process) helped catalyze a competitive bidding environment, validating the underlying value of media assets. It suggests management is taking the right steps to unlock shareholder value in a difficult sector. Management is making correct strategic moves to highlight asset value. Execution risk on the split and continued decline in linear TV revenues.

Rich notes that in previous mergers (like WBD), "synergies never really materialized because the core business, the linear TV business, eroded faster." The structural decline of cable/linear TV is outpacing cost-cutting measures. Any company heavily reliant on linear cash flows to service debt faces a losing battle against time and churn. Avoid or Short legacy media assets that cannot deleverage or pivot to streaming fast enough. Successful bundling or stabilization of linear churn could squeeze shorts.