Rupert murdoch's his right-hand man and the ceo of time warner, in early june, which led to a formal offer from foss, a letter for the business.
There are a variety of reasons to give more power at the box office and more power was sports , and there are clearly a lot of tv rights block the and that gives them a lot more leverage in the world of cable television right now.
It talked about how, from the get-go, cnn will be paid for each transaction.
There was a lot of talk about what would happen if you were to see somewhere else and here we go.
You see the reaction of shareholders from time warner.
There is a lot of overlap between the shareholder base in time warner and foss.
They're thinking now that this is out there, you can get some of the overlapping shareholders give the same arguments being put forward.
You have been seeking bankers who are on the deal or investors who want to get on it.
People understand rupert murdoch's thinking, it is pretty much, why does this deal not make sense?
Even if you selloff cnn, they would have $7 billion of international cable revenue between them.
Foss and warner bros., you would create the studio.
It would be number one on domestic cable and general entertainment.
There are so many reasons to do the deal that they are hoping with $85,000 on the table, that just would be more welcoming.
John mentioned the offer was initially in june.
Rupert murdoch has not participated in the conversations yet because he was effectively waiting for an invitation for beauty is to comment.
Highly discouraging that murdoch has not seen the point of coming in yet.
Could the justice department be discouraged by this?
they do not believe -- so long as they sell cnn, they do not think there is any regulation wrist whatsoever.
They would not be this aggressive.
They have gone public with an unsolicited offer of $85 in cash and stock and they would not be this aggressive about it.
I think the regulatory cover for this transaction is on the distribution side.
At&t, directv, it will be relatively easy for these media companies to go down to washington and talk to these regulators and say, we, the content side of this mess, need to bulk up here.
You are in paris and it puts you in a great position to answer about the international side of the deal.
There are three led to the stool.
Hbo is hugely important to time warner, and asked that rupert murdoch would love to have.
Foss is pretty good with sports but a distant number two to espn.
They would get time warner's rights to major league a stall.
Also to the ncaa tournament, march madness, we know how important that is.
Thirdly, the opportunity to build an international business, not only would they have combined cable revenue overseas, but with more programming in one roof, they would pack a much bigger punch with satellite distributors.
Does it make sense to you?
They would be one of the world's largest players.
In a lot of countries, they are not that they are it is interesting.
They are rapidly growing.
Combining the two entities would allow them to have more of a combined operation.
Having a larger entity would make them more competitive.
That is in important point.
I do not think there are trust issues with respect to cable properties in international markets.
Was this expected to early the timing is right.
You have the time spent off.
The balance sheets are strong and the companies are hitting the numbers.
Murdoch wants to deal from a position of strength and they are at a position of strength.
Really trimming down, getting rid of cable and time inc.. he has laid out a long-term growth plan which focuses on international growth.
It was a big source of growth for them.
Trimming down the company and making it green, it becomes easier.
John, this is an issue that jeff will have to confront one way or the other.
The stock is trading close to $85. time warner is -- is in play.
If he does not sell to rupert murdoch, who else is in?
What about google?
There has been all that talk in -- of google taking an interest in a media company.
Jeff makes an excellent point.
He just sits there and has to watch this all unfold.
As paul mentioned, when you have been so focused on shareholders and cleaning up the business to make it shareholder friendly, this is all about the stock price.
To answer your question, is anybody's guess at this point.
Foss comes forward to make their push because they think they have a strong case.
In any situation like this, everybody has got to be thinking, maybe this is our shot.
On jeff's side, because he is got to be accountable to shareholders, we could see very interesting the next few days or weeks as a result of how this has all come to light.
You cover google in addition to the media companies.
What do you think?
Do you think the interest in media is genuine?
Is time warner the property they cover the most?
If anything, google has been focusing a lot of capital investments away from the media.
I really think it strikes me as sensible in some ways.
I would not rule it out.
They are sitting on cash.
Google could be viewed as the eric schmidt diversification portfolio in some regards.
Maybe they decide that is a good place for them to spend money.
It does not strike me as thing for them to do first and foremost.
But that is it.
They clearly know they need to buy more premium content and having more user generated content will not do it.
Let's say it is time warner for arguments sake.
In a bageled -- battle between google and foss, is it even a contest?
They still have to be disciplined in the way they evaluate and bid for assets.
Shareholders seem to be able to put up with a lot less discipline from google.
What google would have going forward is the evaluation.
Like brian mentioned, i am not really sure google is willing to lay that bet on the table, but they had to think long and hard about this because the asset from time warner does not come up that often.
If google wants to be a player in content, they have to think about it here.
If you have made it clear, take a hike, rupert murdoch, what are you doing?
Making other calls?
I think he is talking to shareholders first and foremost and making a pitch for his plan.
We think we can create value with our business plan.
Part of his problem though is as john pointed out earlier, shareholders by and large are the same.
The same names come up for both.
On a share count basis, there is a 70% overlap.
Jeff is talking to the same people chase kerry is talking about.
It is a question of a more forceful and persuasive argument.
The big thing you are focusing on is one of the synergies of putting these things together?
That is an issue.
The billion-dollar number thrown out, that is a low number when you take a look at the tremendous number of ss between the two companies.
Is is a story that ain't going away.
There you go.
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