The idea is that this is a political deal, not a business deal - by buying WBD, the Ellisons add CNN to a portfolio that already includes CBS and TikTok, and shaping coverage matters more to them than the stock price.
I think this was actually on the table and rejected. Which is why the "control the narrative" argument is fishy, or at least missing something. And now having just defended Oracle I have to go take a shower.
I assume OP is talking about an ideological motive to take over the media industry and pivot it in a rightward direction. That’s certainly what happened with CBS News, I think it’s fair to speculate about CNN too.
No idea why OP alluded to it rather than just said it though.
Absolutely. But it’s still relevant because depending on your goal (and your resources) a bad deal that burns cash might still be a positive outcome.
Not dissimilar from Musk buying Twitter, objectively he overpaid by a ton for a business that wasn’t thriving. But I think time has shown that his purchase has paid political and ideological dividends. Which might be worth the money to him.
That's what a poor person would say. Fox news managed to get Donald Trump elected, whose net worth has gone up by billions.
Also, it's not real money, it's debt equity. Equity transfers are just rich people toys. They move the actual cost into the entity they purchase, and if it fails, whatever, it didn't cost them anything.
I don’t know what that means. You wrote something about debt equity not costing shareholders anything, but it’s trivial to see that all else being equal, a business with more debt will have a smaller market capitalization than a business with less debt.
The debt from the Time Warner and other purchases dragged ATT down from the top spot to 3rd, and boosted Tmobile to the top. The shareholders of ATT lost and the shareholders of Tmobile gained.