Cory johnson is still with us in the studio.
Jon erlichman also joined.
Did we hear anything that gives us any indication about how he is feeling, and how they are feeling about m&a? he talked a lot about their business, but this is a story that will not be settled for a very long time, because this is jeff bewkes's bet on the long-term business and squeezing more value out of them.
He vaguely talked about m&a opportunities, but he is using this more than opportunities to say, we like the prospects of hbo as a global business, and the cable networks, and the turner operation as a global business.
We don't have to be bigger.
We are a leader in a bunch of categories, in movies like warner bros.. and this is my case to you, the analyst and the investors, that of a loan is a better proposition than us as part of fox.
But obviously, we talk about the stock selloff that has happened since fox pulled the plug on its pursuit.
How do you see this?
Is it not in play in the near future?
Yes, inasmuch as it is not still in play from fox.
If we can believe murdoch at his word that he is not interested in the property at all, which i find hard to believe.
I don't think any other players who would want to acquire the company are available to do so.
Rupert murdoch was bidding against himself.
It's not a position you want to be in, but backing away from this bid for my he puts himself in a better position where it is not first offer or higher.
Should jeff bewkes have engaged a little bit more with rupert murdoch?
Look, he has clearly been a position to get the benefit of the doubt from shareholders, because as we have been highlighting, he took a strategy to get out of businesses that he did not believe he should be in.
That resulted in some pretty good performance for time warner stock.
But it also left him in some ways exposed to a company like fox, to sort of say, where is the game plan from here?
No doubt there will be pressure on a company like this.
A lot of these media companies do you like there is a way to squeeze some juice from some of the new ways of consuming content.
He is a veteran, and he talked a lot about the delay structured with amazon earlier this year, which brings older hbo shows, shows at least three years old, to amazon prime service.
Amazon is hungry for content.
Hbo is happy to sell them content if it doesn't bother the pay-tv operators.
And that resulted in something like 56% growth on the content revenue side for hbo year-over-year.
If he can strike more deals like that, there is potentially the ability to unlock some quick value.
But as i set the offset, i think this is a longer-term story that the shareholders will have to believe in from jeff bewkes.
But i want to bring in the managing -- i want to bring in the banking managing director . he did not talk about m&a. what do you make of time warner's future and whether he made the right call?
I think he made the right call, given the big come a absolutely.
The initial offer was $85 a share.
They did not make a second offer.
Every analyst on the entire street would argue, you know, if you look at the break up values of time warner, they certainly supported values higher of -- higher than 89 -- $85. and the reality is, generating 15% annual growth in earnings if you hold multiple, time warner stock would have been there not long from now.
At the end of the day, everyone is saying, is this some sort of ploy by rupert, is he going to come back echo at the end of the day, i think this is circular logic.
-- is he going to come back?
At the end of the day, i think it is circular logic.
The price was going to be high enough such that fox would have to issue more stock.
That pounded fox stock.
And as a result, fox was less prepared to pay the higher number.
At the end of the day, the circular logic did not work.
And if somehow he could convince everybody that at a higher price it makes industrial sense, maybe fox stock would not get hit as hard.
I don't think this is a negotiating ploy.
It just didn't work as structured.
Strategically, though, i look at this from what rupert malik -- rupert murdoch was thinking about the way his business works.
He liked the way this worked strategically.
I cannot see him completely walking away from that.
You know, welcome to the new rupert murdoch.
I think this was a clear industrial logic.
The industrial logic was a scale, and the volume of this year content used and controlled globally had to do with the way it was distributed.
This is not about comcast or dealing with directv.
This is like dealing with apple, or netflix internationally, or amazon, or whoever the next distributor is.
There was an industrial logic, but the new rupert says, hey, i am more aligned with my public shareholders and i do exercise a discipline in pricing.
If he can get the deal done at an attractive level where he is aligned with shareholders, i think he would do it in a heartbeat.
There is an industrial logic.
But it is not like it is and all costs proposition.
But what happens to time warner now?
It is not in play -- what happens to time warner now?
It is not in play right now.
Does it remain an independent company?
I look at it this way.
Part of time warner's rationale -- and we have talked about it before, i think.
There is really only one bidder.
Rupert doesn't want to be in a position where it bidding against himself, but that is about as good as it gets.
Imagine if there was a full bidding process.
What time warner might ultimately want to do if they can revisit this topic in 12 to 24 months when comcast isn't busy, when at&t isn't busy, when verizon isn't busy, when the ambitions of other new media companies broaden maybe more into entertainment, that would be a great time to auction the company.
But right now is not a good time to auction the company.
In the near term, the company has some pretty decent visibility in the trajectory of
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