Former NBC Cable President Tom Rogers on Netflix-WBD deal scrutiny, Disney leadership changes
Speakers
Tom Rogers
— Media Mogul
Summary
CNBC's Squawk Box discusses the takeover battle for Warner Bros. Discovery, with Tom Rogers analyzing whether President Trump will intervene and how Netflix and Paramount Skydance are positioned. Rogers also covers regulatory risks, Paramount's financing challenges, and Disney's leadership change and streaming struggles. The segment frames media M&A and streaming as key areas to watch.
- Trump told NBC News he won't intervene in the Netflix/Paramount Skydance contest for Warner Bros. Discovery.
- Tom Rogers expects less political risk for Netflix from Trump or Congress but sees real regulatory risk from state attorneys general and European regulators.
- Rogers says Paramount Skydance needs $10 to $12 billion more to raise its bid and may struggle to find it as Larry Ellison has hit his limit.
- Warner Bros. Discovery's board is concerned about leverage but would take a raised bid seriously, and key institutional shareholders would too.
- Rogers discusses Disney's new CEO as a good fit for the parks business, but says Disney's streaming business remains stuck.
- Disney streaming ad growth is only 4% versus Netflix's 100% growth target, highlighting Netflix's ad momentum.
- The segment also covers congressional hearings as lobbying theater and CNN ownership as a potential future political issue.
Ideas
Netflix WBD bid faces overseas regulatory risk
Tom Rogers sees Netflix's bid for Warner Bros. Discovery as less exposed to Trump administration or congressional politics, and he thinks the consumer-pricing antitrust case is weak because Netflix has pursued a low-priced ad-supported strategy and bundling HBO could actually lower prices. However, Netflix still has real regulatory risk from state attorneys general and European regulators, where it is behind the eight ball, making the deal review an important overhang to monitor.
Paramount struggles to fund higher WBD bid
Tom Rogers believes Paramount Skydance will have difficulty winning Warner Bros. Discovery. To make a bid that would turn Warner's board's head, Paramount needs roughly $10 to $12 billion of additional funds, but Larry Ellison has indicated he is at his limit and will not provide more. Finding a new passive investor is likely unattractive given the leverage, and time is running out, so the higher bid may not materialize.
WBD board would take raised bid seriously
Tom Rogers views Warner Bros. Discovery as a key event-driven situation. The Warner board has legitimate concerns that a Paramount Skydance deal would leave the company highly leveraged at close to nine times, and lenders may hesitate if the cable business keeps declining or the macro environment worsens. Still, the board and key institutional shareholders have signaled they would take a raised bid very seriously, so WBD remains a name to watch as the bidding battle develops.
Disney streaming stuck despite parks CEO choice
Tom Rogers says Disney's new CEO is a sensible choice for the company's biggest business, parks, which is receiving $60 billion of investment and has a limited pool of executive talent. But the streaming side remains stuck: engagement has not moved in two years, linear viewing keeps declining, streaming viewers are not flowing to Disney+, and streaming advertising growth is only 4% versus Netflix's 100% target, so the leadership change does not fix Disney's core streaming problems.
