2025-09-16 23:30:27
Are people going to buy $800 smart glasses? When you're getting up to high-end smartphone prices, it's going to be a challenge since, of course, you'll still need to carry a smartphone with them. They're going to have to be overall really good but weirdly, ideally just at a few things, not trying to do it all, to sell a viral use case.
The wristband should be enough to get early adopters to try it, but it's probably going to be the AI that really needs to seal the deal with the broader public. And is Meta's AI up to that task?
M.G. Siegler
There's still no firm deal announcement yet, but the details seemingly keep dripping out ever... so... slowly... It really is like a gameshow!
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2025-09-16 17:19:32
Last week, Apple chose a famous Steve Jobs quote to open their iPhone event: "Design is not just what it looks like and feels like. Design is how it works." That's true. But only because the inverse is also true: Design is not just how it works. Design is what it looks like and feels like. And that's what Meta is clearly going to have to focus on at their Meta Connect conference this week.
I say "clearly" because it clearly looks like at least one of their big announcements has leaked ahead of time. As spotted by David Heaney of UploadVR, it appears that Meta's new 'HUD' smart glasses are ready to roll. It's a leak so bad that you almost have to wonder if it was one of those intentional "whoops" quick YouTube upload-then-delist moments to whet the appetite of the unveiling tomorrow. Regardless, the 'Meta Ray-Ban Display' glasses are clearly imminent.
Of course, much about these "Hypernova" glasses, which feature a small display in one lens, has already leaked out via reports over this year. That includes the inclusion of an "sEMG wristband" that pairs with them to help control the screen, as I've written about before. Otherwise, one quasi-surprise here may be the branding:
But what is somewhat of a surprise is that it will be Ray-Ban branded. Last year, The Information reported that the glasses would be released by Meta without EssilorLuxottica, because the Ray-Ban and Oakley owner "balked" at the increased thickness of the glasses arm needed to deliver the display.
One way to get your partner to "un-balk" may be to make a massive investment in their company. Say, $3.5B? And if these are indeed branded as 'Ray-Ban' that will obviously be a huge lift for Meta both because of the previous success with their smart glasses collaboration but also because of the retail footprint EssilorLuxottica brings to the table. While a pair of sunglasses with a camera system may be fairly straightforward, the new screen element is probably something you're going to want to see to believe in – especially if the "glasshole" stigma still lingers in your head from Google's ill-fated early attempt in the space.
The partnership also gives Meta a leg-up in an aspect just as important as the technology here: design. I don't think most people would trust Meta to design something you wear out and about any more than they'd trust Google.1 But they'd certainly trust Ray-Ban – and again, the previous partnership has already proven this to be the case. While Snap may have created the first such wearable that wasn't a complete embarrassment to wear, Meta perfected the form-factor with Ray-Ban – and most importantly, scaled it.
Still, the screen will bring other challenges. Perhaps most notably, battery life. What will that look like? And part of that is clearly related to the above concern EssilorLuxottica had about "chonkiness". From this leak, they don't look too big/bad, but we'll have to see some footage in non-staged lighting. Also, the weight. Word has been 70 grams versus 50 for the "regular" Ray-Ban Meta smart glasses, which seems reasonable. But feel will be important, obviously.
Meanwhile, how they look internally, as in, to a person wearing them, will obviously be critical too. Some mild concerns from a CNBC report last month:
Although Hypernova will feature a display, those visual features are expected to be limited, people familiar with the matter said. They said the color display will offer about a 20 degree field of view — meaning it will appear in a small window in a fixed position — and will be used primarily to relay simple bits of information, such as incoming text messages.
If Meta keeps it simple – really simple – this might be fine. But I'm a bit worried by what we're seeing in the leaked video...
Beyond that, just the elephant in the room.
As you may have heard, Meta has been having a hell of a time with their AI work. And that will clearly be a key, um, focal point here. Will some version of Llama be ready to roll to power Meta AI in these glasses? Or will they bite the bullet and partner with someone else – perhaps even someone big? – to ensure a great AI experience (which has long been an issue) while they work to re-build their own internal models? Also, such a device may not only be important for AI output, but input too, as I wrote about in June:
Back to consumers, Meta is clearly happy to keep pulling on the Ray-Ban string to see where it leads. Next up: some (small) display AR to augment the capture (and audio) AR. And clearly Apple has seen enough to think they need to go down this path too. And Google once again! Granted they've been burned enough down this path in the past to want to partner this time, but still, everyone is lining up for another go at making such wearables happen. And that's presumably because it's not just about AR here, but rather AI. And the fact that such glasses are not just interesting as outputs for the technology, but also inputs, with all the sensors able to capture information in the real world to feed back into the models.
Even if these 'Hypernova' glasses don't end up being huge sellers – the sub-$1,000 price point, at a rumored $800, is key, but still expensive unless they're great – this launch and continuing partnership will jack up the pressure on Meta's rivals here. Snap first and foremost, of course. But Google, and Amazon, and Samsung, and yes, Apple as well. Meta runs a risk in being first here – especially because of that aforementioned true first-mover in Google Glass, which poisoned this particular well for a decade. But they've given people confidence with the Ray-Ban Metas and everyone knows that Mark Zuckerberg would love nothing more than to shove this success in the face of Tim Cook.
We'll see!
One more thing: a point in favor of this not being an intentional buzz-building leak might be the fact that Meta also leaked another product: the 'Oakley Meta Sphaera'. These are the new (also rumored) Oakley smart glasses collaboration that puts the camera system in the center. Prada soon?
M.G. Siegler
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1 Yes, Apple may be the only tech company anyone would truly trust here. Then again, they created this. Including the creepy eye screen thing that they really thought would help people wear it around. Yikes. ↩
2025-09-15 21:08:06
As it turns out, people have a lot of strong opinions about materials – especially when it's materials used in iPhone cases. After now over a million views across Xitter, Threads, Bluesky, etc, and hundreds of responses, I think I can safely confirm that people really, really did not like Apple's 'FineWoven' cases. And as bad as they were to start – and they were bad, it's the only Apple product I can recall returning right after I opened – they were actually far worse with age. 'TechWoven' beyond being a silly name, at least look a lot better to start.
We'll see how it ages...
Spyglass Signal is a newsletter sent on weekdays featuring links and commentary from M.G. Siegler on timely topics found around the web.
📲 iPhone Air: Will It Bend? – Greg Joswiak casually tossing the iPhone Air to Lance Ulanoff (who perfectly fails to catch it – a nice showcase that it wasn't a staged bit) and telling him and Mark Spoonauer to try to bend it was fun and gets the headlines. But actually, the entire discussion with Joz and John Ternus – including the second part – is well worth the watch. While Joz is fast with the quips – and he's quite good at them here! – Ternus has a clear, quiet command over the products. Maybe I'm reading too much into it, but it almost felt like this was a touring party for Ternus to take on even more of an outward-facing role... And while Joz has been perhaps a bit of a chaperone in some of these, Ternus had a number of spots across a range of places... Anyway, just a note that he comes across in these as sincere and in command of the product details albeit while not quite as polished and at ease as Joz, but that's to be expected as it comes with experience... (And yes, they answer the "plateau" question.) [MacRumors]
🗣️ OpenAI's $350B Problem – Good overview of the needle OpenAI is trying to thread between their rapid growth and rapid rise in costs. Everyone brings up the examples of companies that were burning massive amounts of money to eventually get to profitability, with many always skeptical that will ever happen – with Amazon being the key example of success always cited. But if Uber – another successful example – was that game plan on steroids, this is that steroidal game plan on... all the steroids in the world. And a lot of it is driven by OpenAI's shift away from Microsoft, and eventually, all cloud/compute partners to try to own the whole stack themselves, so as not to get stuck in the "Snap Trap" (constant margin issues due to third-party cloud costs). If they pull it off, they're worth trillions. If they don't... But first, they have to go public to be able to fully access all the capital (via different instruments) they'll need to try to pull this off, and that's still no slam dunk given the structural issues. And if/when they get public, they're going to need the market to hold up when it comes to buying the AI dream... Quite a few needles to thread here... [Information 🔒]
👹 'Demon Slayer' Slays Box Office – Demons, so hot right now. Following KPop Demon Hunters massive one-weekend-only haul, another animated film, Demon Slayer Infinity Castle, just opened at number one. That itself wouldn't be a huge shock in a relatively slow weekend – except that it earned $70M. I repeat, an anime movie earned $70M at the box office in its opening weekend – in the United States (and Canada). Yes, it is and was huge in Japan, but this feels like some sort of breakthrough moment – its opening day nearly topped the entire weekend estimates. I won't pretend to understand this enough to speak to what it will point to other than you can be sure more animated (KPop wasn't technically anime) movies focused on killing demons are going to be on order at every studio – not just Sony, which has another massive win here (alongside their Crunchyroll streaming service – the movie cost just $20M to make). [THR]
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• Publishers Suing Google Over AI
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• Emmy Winners & Losers
• The Tik Keeps Toking...
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2025-09-12 23:07:30
While Microsoft and OpenAI will only give you 49 words to update their (beyond complicated) situation, I give you nearly 3,000 in an attempt to translate why they're even bothering to publish those 49 words in a joint statement on both corporate blogs, no less. Again, it's complicated. But the high-level may be decidedly straightforward: the race is officially on to convert OpenAI into a PBC.
M.G. Siegler
Spyglass Signal is a newsletter sent on weekdays featuring links and commentary from M.G. Siegler on timely topics found around the web.
I was right in what I wrote about Paramount's strategy – I just didn't think it would take over a year to close the deal and start executing upon it...
M.G. Siegler
Fred Vogelstein looks back at the news aggregator of choice for so many of us, for so long. He also talks to Gabe Rivera about the state of the business and why the site looks almost exactly as it did in 2005. Gabe is a good friend of mine but wasn't in the site's early days when I would pester him over email about why my obviously excellent blog posts weren't on Techmeme. He nicely responded to those emails, though not in the nicest way, essentially noting that my posts added nothing to the topic. Which I didn't appreciate at the time, but now I do. Mediagazer, a sister site, launched later, remains great on days like this too. Happy 20th Techmeme, next year, drinks on me. 🍻🎂 [Crazy Stupid Tech]
"An iPhone for the Ozempic era."
– Sam Schube, describing the iPhone Air, in his piece for The Wall Street Journal.
His sit down with several Apple executives including Tim Cook, is unsurprisingly fluffy. But it's also another data point that I brought up in my own piece on the unveiling: that Apple is explicitly trying to lean back into the design narrative that has long differentiated them. This is mainly about the fashion aspect of the device (and the new crossbody straps) but also the internal debate people might be having for the first time in a while when it comes to picking an iPhone model: Air or Pro?
Cook, of course, says he won't choose and will use both. 🙄
Below, members of The Inner Ring will find thoughts on:
• Larry Ellison Riding the AI Wave
• A Protocol for AI Data Licensing
• No AirPods Translation in the EU
• MountDance WarBroDisco
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2025-09-12 17:47:05
It seems like OpenAI has solved their Microsoft problem. Well, maybe. Tentatively, at least. Pending some pesky details. Details they'd rather not talk about right now, while still letting us all know they're on the same page via a 49-word statement published to both of their corporate blogs at the same time. The statement is so short that the images in each overshadows the text.1 The joint statement, in full:
OpenAI and Microsoft have signed a non-binding memorandum of understanding (MOU) for the next phase of our partnership. We are actively working to finalize contractual terms in a definitive agreement. Together, we remain focused on delivering the best AI tools for everyone, grounded in our shared commitment to safety.
It's settled then. Of course, it's not actually or it would be finalized. But there's clearly some reason they'd like us to know they're working on it!
Experience and common sense suggests that they're trying to get ahead of something. And, in fact, there are a lot of tangential stories floating around out there that could explain the announcement. The biggest one is probably the two key states involved in the matter of OpenAI shifting to a Public Benefit Corporation (PBC), Delaware (where OpenAI is incorporated) and California (where OpenAI resides), are clearly not happy about the recent news around the company being tied to recent tragedies, as ChatGPT, at best, didn't help vulnerable users who seemed to be in bad mental states of mind before taking their own lives and in one case, the lives of others. This narrative has been simmering for some time and now it's boiling over, with the state AGs specifically suggesting the move away from non-profit status may not be the right decision.
This is a big enough problem that there are now whispers of the company debating shifting their domicile elsewhere (which OpenAI has denied). And mixed with their main benefactor Microsoft also apparently blocking the transition – not to mention their original backer and co-founder, Elon Musk, trying to constantly throw wrenches into the process and you have... well, a shitshow.
Alleviating the Microsoft portion of this situation is an important step, but not the only one here. But it should help the company continue to make the case for the PBC transition, which they had hoped would happen this year, but reportedly was pushed into next year because of the impasse with Microsoft. Again, that impasse is now being cleared – well, they're working on it. To me, that suggests OpenAI is very much trying to make this happen this year still.
And yes, contractually they're incentivized to do this because as has been widely reported, OpenAI's new big benefactor, SoftBank, had the right not to fund the remainder of their portion of the $40B fundraise if the company didn't transition by the end of the year. Now there's almost no way SoftBank was going to back out of that agreement regardless – I mean, they're buying up secondary shares right now at $500B, which is significantly higher than the shares they're buying in the primary transaction. They'd be crazy not to take the automatic markup of their money which they can still invest at $300B!
But we're too in the weeds now. The key is that solving this Microsoft situation was perhaps the main element in trying to get a transition done any time soon. And even without the SoftBank deal pressure, the pressure from those states is now far more acute. One imagines that OpenAI wants to get this done quickly before they're sucked into endless political hearings about AI's role in the mental health crisis – which is clearly about to happen.
If that's true, one has to wonder what OpenAI conceded to Microsoft here to get them on board, fast. Again, they're not saying because they're still negotiating, but clearly a big part of it is "The Clause". That is, the stipulation in the original contract that Microsoft would lose access to OpenAI's technology if the company achieved AGI. It's decidedly more complicated than that, including in the who gets to decide what constitutes "AGI" (namely OpenAI's board, which is now a totally different board, composed of people will completely different backgrounds, than the one that was supposed to be determining it), and if Microsoft retained access to "older" AI technology, but the high-level was clearly a problem for Microsoft.
And it keeps coming up because Sam Altman on down has kept hinting that the company may be close to achieving "AGI". It was clearly pissing off Satya Nadella, who made that more or less known, and so talk suddenly shifted to "superintelligence", which is totally different, you see.
At the same time, a lesser known part of "The Clause" apparently also blocked Microsoft itself from going after AGI. This undoubtedly didn't matter to the company at the time of the agreement, but since then – well, things have changed. Including "the blip" – the brief moment in time when Altman was ousted from OpenAI, only to be quickly reinstated with the help of Nadella – which torpedoed the trust between the two sides and led to Microsoft inventing the "hackquisition" process (born out of the way they almost hired all of OpenAI during said blip) to take on Inflection AI talent and bring DeepMind co-founder Mustafa Suleyman on board to lead new AI efforts internal to Microsoft.
Over the past many months, all we've heard is how there was nothing to see to all of this. But of course there was. Including the notion that Microsoft was building their own smaller models because they were deferring to OpenAI for the "frontier" models. Yes, they were doing that because they couldn't build models going after AGI, per "The Clause". But some news this week may be hinting of a big change there – here's Tom Warren reporting for The Verge:
Microsoft AI launched its first in-house models last month, adding to the already complicated relationship with its OpenAI partner. Now, Microsoft AI chief Mustafa Suleyman says the company is making “significant investments” in the compute capacity required to Microsoft’s own future frontier models.
“We should have the capacity to build world class frontier models in house of all sizes, but we should be very pragmatic and use other models where we need to,” said Suleyman during Microsoft’s employee-only town hall on Thursday. “We’re also going to be making significant investments in our own cluster, so today MAI-1-preview was only trained on 15,000 H100s, a tiny cluster in the grand scheme of things.”
Interesting. He continues:
Suleyman hinted that Microsoft has ambitions to train models that are comparable to Meta, Google, and xAI’s efforts on clusters that are “six to ten times larger in size” than what Microsoft used for its MAI-1-preview. “Much more to do, but it’s good to take the first steps,” said Suleyman.
Microsoft CEO Satya Nadella said at the same town hall that he’s “looking forward to us building model capability, so that we can build model-forward products.” Nadella also made it clear that Microsoft will “definitely support multiple models” in its products, and highlighted GitHub Copilot as “the best example” of that strategy.
Yeah, so this news is trickling out of Microsoft's internal meetings. Meanwhile, so is the news that Microsoft may start using Anthropic's models to power Copilot, as Aaron Holmes also scooped this week for The Information. I mean, what?! Microsoft has done a few moves to hedge their bets – including, of course the aforementioned Inflection deal – but this is OpenAI's main competitor replacing them in Microsoft's core AI product. Uhh...
So yeah, what's going on here? Well, in the reporting around the 49-word joint statement, we have this tidbit from Karen Weise and Cade Metz for The New York Times:
As part of their new deal, Microsoft and OpenAI have renegotiated the financial terms of a commercial agreement they signed in 2019. The deal includes how the two companies share technology and how they share revenue from those technologies.
The original agreement also included a clause that rescinded Microsoft’s access to OpenAI’s most powerful technology when the OpenAI board formally decided that the technology had achieved “artificial general intelligence,” or A.G.I., shorthand for a machine that matches the power of the human brain.
This clause remains part of the new agreement but has been modified, according to a person familiar with the agreement who spoke on condition of anonymity because they were not authorized to discuss it.
"The Clause" "remains" but, it's modified. And my guess would be that it's modified such that Microsoft is also now free to pursue AGI and/or superintelligence, and anything else they wish to call it. I'm also guessing they'll also retain some form of access to OpenAI's technologies beyond 2030 – the other aspect of the contract Microsoft had reportedly wanted to change. Again, Microsoft seemingly holds the cards here with the sign-off sword in hand and with all the other issues swirling around OpenAI...
At the same time, another big hold up in any agreement between OpenAI and Microsoft was said to be the future equity stake in the event of a conversion. Because of the non-profit status, Microsoft, alongside all other investors just technically hold rights to future profits at the moment. Those will convert to actual equity with the PBC switch, but it wasn't tenable for Microsoft to hold the same 49% they hold in those profit rights (and it's actually more than that as it starts higher, closer to 75% to start up until a certain amount).
And Microsoft probably doesn't even want such a stake, optically. Regulators might note that say, 49% is a mere percent or two below majority control. The second biggest company in the world suddenly controlling the largest AI company? Yeah, not the best optics there.
My guess has long been that they would net out around a 33% stake in OpenAI. And subsequent reporting seemingly backed this up. There's no word on that stake here yet, but tangential to that, there is word on the stake the non-profit would hold going forward. In fact, it comes in the form of another post on the corporate blog. This one, by Chairman of the Board Bret Taylor, is a whole 324 words. The key words:
As previously announced and as outlined in our non-binding MOU with Microsoft, the OpenAI nonprofit’s ongoing control would now be paired with an equity stake in the PBC. Today, we are sharing that this new equity stake would exceed $100 billion—making it one of the most well-resourced philanthropic organizations in the world. This recapitalization would also enable us to raise the capital required to accomplish our mission—and ensure that as OpenAI’s PBC grows, so will the nonprofit’s resources, allowing us to bring it to historic levels of community impact.
Yes, he puts an actual value – well, a rough value – on the stake. Why? Because it sounds good, of course. Holy shit, $100B? For a non-profit? This has been OpenAI's comms approach to the conversion since they had to move away from a full-on for-profit shift to the PBC move a few months back (amidst a lot of pressure making it clear that wouldn't happen without meaningful protection of the remaining non-profit). Not only will the non-profit remain, and remain in control, it will be the best capitalized non-profit ever, the story goes. And it's probably not wrong! But it's also clearly PR meant to sway those states holding the keys to the conversion kingdom:
This structure reaffirms that our core mission remains ensuring AGI benefits all of humanity. Our PBC charter and governance will establish that safety decisions must always be guided by this mission. We continue to work with the California and Delaware Attorneys General as an important part of strengthening our approach, and we remain committed to learning and acting with urgency to ensure our tools are helpful and safe for everyone, while advancing safety as an industry-wide priority.
And look, a $50M cherry on top too!
As part of this next phase, the OpenAI nonprofit has launched a call for applications for the first wave of a $50 million grant initiative to support nonprofit and community organizations in three areas: AI literacy and public understanding, community innovation, and economic opportunity. This is just the beginning. Our recapitalization would unlock the ability to do much more.
This blog post is also interesting because it reinforces my thought that OpenAI is going to try to execute this transition fast. Like imminently, perhaps. Which again, is why you give the non-statement statement on the Microsoft situation.
Back to the equity piece. Weise and Metz were also able to glean a bit more here:
The nonprofit that now manages OpenAI would become “one of the most well-resourced philanthropic organizations in the world,” Bret Taylor, OpenAI’s board chair, said in a blog post. The nonprofit’s stake will exceed 20 percent of the reorganized company, according to the person familiar with the deal.
A stake that would "exceed 20 percent" is also in line with my guesstimate a year ago that the non-profit would get 25% of the equity. So far, so good. One element that wasn't yet a part of OpenAI's cap table equation back then was SoftBank. And given that they've now shot past the $13B or so that Microsoft has put into OpenAI over the years, clearly their stake is going to be sizable as well upon conversion. One recent report pegs the target at 12%.
So Microsoft at 33%, the non-profit at 25%, and SoftBank at 12% nicely adds up to 70%. But there are many other stakeholders around the table to convert here, most notably Khosla Ventures and the other original investors alongside Microsoft. And then Thrive Capital, who has led a few of the later rounds. And many, many others. And none of that includes equity for Altman, who famously holds none at the moment. That has always been presumed to change with a conversion, but it can't be a massive percentage as we're running out of room, fast.
Oh yes, and what about that co-founder who put up the money to start the whole thing? He remains another big wrinkle here because he's undoubtedly going to argue that his grants to a non-profit should be considered investments for equity if OpenAI is allowed to convert (which he'd still prefer not happen as it makes life easier for his new AI startup competing with OpenAI, xAI). That is a total wildcard here. Imagine if a judge says OpenAI has to give Musk an equity slug...
Regardless, he's seemingly about to get very vocal as OpenAI is clearly accelerating towards the PBC conversion...
Point is, there's a lot going on at the moment and a lot more likely to go on from here. Things which a 49-word statement can't convey. But I can – in 2,500 words.
One more thing: Perhaps a bit less pressing given their current $40B fundraise, but at some point soon-ish, OpenAI does likely need to go public. Because the amount of money they're now projecting to burn is so astronomical, the only way to access it may be through the public markets and tangential instruments (especially given the equity dilution situation mentioned above). And the only path to go public is to move on from their non-profit status...
Update: Sri Muppidi, Aaron Holmes, and Stephanie Palazzolo have a few more details about the potential new agreemenent for The Information, notably that OpenAI may be able to cut the percentage of revenue going to Microsoft in 2030 to perhaps around 8%, down from 20% in the current contract. This is important as it will allow OpenAI to keep a lot more of the revenue it generates, of course.
They also note that" "OpenAI’s nonprofit and Microsoft will each get around one-third of the new company"...
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2025-09-12 04:38:49
In July of 2024, just after Skydance's bid to acquire Paramount was finally made official, I laid out some plans for what the newly merged company should do once the deal closes to best compete. And then the deal took over a year to actually close. Still, the ideas were pretty good, apparently. Because one of them is now on the verge of happening.
And it's a big one.
As I wrote incidentally exactly 14 months ago:
There's been a lot of talk amidst the Paramount dealings that WBD might be a good home/partner. What if, once the Skydance/Paramount deal is closed, *they actually buy WBD*? Yes, there are debt issues, but a year from now, hopefully WBD head David Zaslav will have a better answer and path there. Ellison has spoken a few times about Paramount+ in particular. Most assume they'll either spin it off or merge it with another player, like WBD's Max or Comcast's Peacock. And perhaps they will. But again, I'm not sure they shouldn't just buy all of WBD to bulk up into one of the major players themselves.
Well, here's Jessica Toonkel reporting for The Wall Street Journal today:
Paramount Skydance is preparing a majority cash bid for Warner Bros. Discovery that is backed by the Ellison family, according to people familiar with the situation.
The bid will be for the entire company, including its cable networks and movie studio, the people said. Warner said late last year it planned to restructure into two operating divisions, one focused on the legacy cable-television business and the other on streaming and studios.
Ooooh, that's a bingo. In fact, it's such a bingo that it may sound obvious now. But back then, it was anything but obvious – not only because Skydance was having a hell of a time getting to a deal with Paramount, but as alluded to up above, there was a lot of talk that WBD might be the more obvious buyer of Paramount because they were the much larger entity. And, in fact, they remain the much larger entity, which remains a main complication of such a deal, as Toonkel notes:
Such a deal would be a big swing. Warner Bros.’s nearly $33 billion market capitalization is more than double that of Paramount Skydance. A bid hasn’t yet been submitted and the plans could still fall apart.
And it's not just the fact that WBD is double the size of Paramount Skydance, it's also the mountain of debt WBD is carrying, as I noted back then. And yes, WBD chief David Zaslav has been able to clean it up a bit, but the main purge was set to occur when the company split in two next year – which wouldn't happen under this new offer.
In backing up the reporting, Brooks Barnes, Lauren Hirsch, and Benjamin Mullin note for The New York Times:
Mr. Ellison is interested in acquiring the entire company, in line with his strategy of doubling down on both streaming and traditional TV, according to the people with knowledge of the plans. The bid would be made mostly in cash.
A deal to acquire Warner Bros. Discovery would be costly. The company is worth $41 billion and has $35 billion in debt, remnants of the merger that brought it to life. But the Ellison family has the means: Larry Ellison, David Ellison’s father, is the co-founder of Oracle and one of the richest men in the world, with an estimated net worth of $383 billion, according to Bloomberg.
Just yesterday, the elder Ellison actually became the richest man in the world thanks to a surge in Oracle shares after their earnings report. So yeah, they have the cash to do this. But it's still going to be insanely expensive. And undoubtedly time-consuming, given the slog the first deal went through. But it also makes some sense from a pure bulking-up into a major player, perspective. Which is exactly why I suggested they might do it.
As for why now, back to Toonkel:
By preparing a play for the company before Warner’s planned split, Paramount Skydance is attempting to pre-empt a potential bidding war for the studio and streaming unit that could include deep-pocketed technology companies such as Amazon and Apple.
A week after I wrote about Paramount Skydance buying WBD, I was off to spend someone else's money – an old favorite, Tim Cook's. While my title made the case that Apple should by HBO, the post made the case for Apple beating Skydance Paramount to the punch and buying all of WBD. While it would obviously be a headache for Apple – and Apple obviously doesn't like headaches, in particular around M&A – there's also a number of reasons why such a deal could make sense, starting at the highest level that Apple wants content and WBD has content. Some of the best content. Yes, Apple could use it to boost Apple TV+, but such IP could work in all sorts of ways for Apple. All in the name of boosting the all-important Services business.
Anyway, for now, it looks like the Skydance Paramount + WBD dance begins. But no one should hold their breath too tightly because we've seen this movie before. It ultimately ended well, but it was a horror story for a while there.
One more thing: I still like the more recent idea I had to spend Skydance Paramount's money, even with this deal: buying IMAX.
Fine, two more things: the branding possibilities are endless here. Paramount Skydance Warner Bros Discovery? PSWBD? ParSkyWarBroDis? MountDance WarBroDisco? Winner.
M.G. Siegler
M.G. Siegler
M.G. Siegler
