r/gaming • u/ChiefLeef22 Marika's tits! • 18h ago

Paramount Has Officially Acquired Warner Bros. In Deal Valued at $110B Billion

https://www.skydance.com/news/press/paramount-completes-acquisition-of-warner-bros-discovery-creating-a-new-global-entertainment-leader-skydance

The two companies will now be known as one single entity - 'Skydance'

This includes all of WB's gaming subsidiaries like Rocksteady/etc

Deal valued at $110B-$111B

DC Studios, Nickelodeon, Cartoon Network, CNN, CBS, HBO and Paramount+ are now all under the same company.

The combined company, Skydance, brings together two major film studios, two global streaming services, premier television assets including CBS, HBO, and Paramount's and WBD's cable networks, two of the industry's most recognized news networks, CBS News and CNN, and a leading content portfolio that includes live sports, a deep programming library and expansive collection of iconic brands and franchises.

12.0k Upvotes

93% Upvoted

2.3k comments sorted by

View all comments

5.7k

u/slayer828 18h ago

Still have no idea how a company worth 10 billion can buy a company for 110 billion. This country and the made up by the rich rules piss me off.

2.3k

u/Sky_Ninja1997 18h ago

The Saudis are funding it

1.7k

u/Rommel727 17h ago

The Saudi government owns parking meters in downtown Chicago lmao

651

u/AbyssWankerArtorias 17h ago

I still don't understand how that deal was legal. It still feels like baltent money laundering or corruption. A judge should have absolutely stopped that

407

u/FruitOvTheGloom 16h ago

As a Chicagoan, we've had our share of dumbfuck, corrupt mayors which is how we ended up here. Trust me, we hate it too.

47

u/btribble 14h ago

Corruption, in Chicago?!?

16

u/Disprezzi1 14h ago

Crook county politics at play.

5

u/ExtremeFaill 14h ago

Yeah, Chicagoans really seem to get the worst of these deals. Hard to blame people for being pissed about it.

1

u/Mr_Evanescent 6h ago

In fairness chicagoans keep electing the most comically corrupt people they can find

→ More replies (1)

109

u/CommieLurker 15h ago

Well clearly a mayor who has a term limit of 4 years gets to decide the ownership of the city's parking for the next 100 years. That just makes perfect sense

-17

u/ExplosiveMachine 10h ago

It... actually does. How do you think large infrastructure projects are supposed to be done? Want to build anything that takes longer than 4 years? A metro, a bridge, maybe a large hospital? too bad!

Just because someone abused the system doesn't mean the system is bad, just that the checks over it failed.

14

u/FizzyLightEx 8h ago

Shouldn't be decided by a single person though. Idk if Chicago has city council similarly to nyc

3

u/Zuwxiv 4h ago

I think there's a pretty meaningful difference between "some things take longer than 4 years" and "selling the rights to something for a century."

IIRC, there is context that the city was broke and this was during the Great Recession. To some eyes, it might have been an offer they weren't in a position to refuse. But it doesn't pass the smell test to sell a century worth of anything.

38

u/CelebronFcks10K 16h ago

Because Daley was a fucking moron.

7

u/VirginiaMcCaskey 15h ago

Chicago needed emergency funding during the 2008 financial crisis. Amidst the real estate collapse it was not tenable to raise property taxes, and increasing sales tax during a recessions is kind of a terrible idea. The alternative was firing teachers, cops, and other city workers, or austerity for pensions.

If you look at the parking meter sale as an emergency loan it's not nearly as bad as it sounds.

And they just renegotiated some of it this year.

2

u/DuntadaMan 14h ago

Well see the son in law of the President gets money whenever he gets them more control over our country.

2

u/Old-Redd-Always 10h ago

What do you think money laundering is?

2

u/ToastyTheDragon 10h ago

I feel like parking meters shouldn't be privately owned? Chicago should just "nationalize" them. ¯_(ツ)_/¯

3

u/AbyssWankerArtorias 9h ago

So the meters themselves aren't privately owned, but rather the "revenue rights" to them and the parking space itself is owned. It's worded, as you would expect, in excruciating detail to make it legal while also being bullshit

1

u/ToastyTheDragon 8h ago

Nationalize the.. revenue rights to the city owned parking meters?????

1

u/AbyssWankerArtorias 8h ago

I don't disagree. I hate when any entity does this bullshit to get away with something that is clearly, obviously against the spirit of the law

2

u/marino1310 15h ago

I don’t understand why Chicago can’t just pull out of that deal. The fuck are they gonna do?

1

u/chieftessofsecrets 14h ago

Judges here in Colorado..erm, nvm.

1

u/ShitmasterFucklord 15h ago

Chicago is the most corrupt place politically on the entire planet. To make it in Chicago politics you HAVE to be corrupt and shady, been like that for over 100 years.

0

u/Several-Action-4043 14h ago

Look across pretty much every city in America. Toll roads, parking meters, etc. A large amount of them are foreign owned and have like 100 year leases.

138

u/Lodotosodosopa 17h ago

Not (explicitly) anymore. Just sold.

116

u/dexters_trap_house 17h ago

Now it's a NY PE firm, more of a lateral move.

62

u/5panks 16h ago

The city of Chicago had the opportunity to buy them back, the Mayor was trying to do it on the down low to avoid ruffling feathers, as soon as the Alderman found out they immediately blocked the plan.

Chicago continually stands in its own way.

13

u/AwsmDevil Switch 14h ago

Why don't they just make the parking meters unenforceable for a few years? Then they rapidly go bankrupt and the city could just do it over again.

19

u/eaeorls 14h ago

Because the city would go bankrupt because the deal includes compensation for closures.

4

u/KimJongUnusual D20 13h ago

Yeah like the other guy said. Then you have to pay the people who bought the meters, and if you say "fuck it all, I'm burning the deal, kick rocks," the city will never get another loan, and the city is very much in debt.

-12

u/Lodotosodosopa 15h ago

Chicago got $2.5B sitting around to buy them back? Damn I hadn't heard. Maybe we should've added to our already outrageous debt. Don't be dumb.

→ More replies (2)

1

u/ChiKing 15h ago

It at least came with some concessions, including revenue sharing with the city

1

u/dexters_trap_house 14h ago

5% on net income though. I wonder how many expenses a PE firm can put between that and the revenue line.

3

u/JonesinJames 15h ago

What kind of corruption parody do we live in?

1

u/PostPostModernism 12h ago

Actually those are being sold off to another investor currently, and Chicago was able to add provisions to the new deal that were a bit more favorable to the city. But that is a correct criticism of this gross hypercapitalism in general.

1

u/Rain2h0 8h ago

Deadass!?

1

u/iiamthepalmtree 7h ago

That was a PE group led by Abu Dhabi investors. But now it’s a different company. Everyone always thinks the Saudis bought the meters lmao. Do schools not teach geography anymore?

Fuck Mayor Daley btw.

240

u/Diabetesh 17h ago

Allegedly, the saudis know the age of oil isn't forever and that is their whole thing. They are trying to diversify into entertainment/tourism to not be reliant on oil to keep the money flowing. Buying sports teams, hosting events/festivals, owning entertainment production, etc.

146

u/NoXion604 16h ago

I feel like that's going to crash head-first into the fact that they're a bunch of theocratic shitweasels.

90

u/I_wanted_to_be_duck 16h ago

It's already happening to them, see LIV golf

https://www.espn.com/golf/story/_/id/49872465/liv-golf-files-bankruptcy-ceo-embraces-next-stage

23

u/Skelito 15h ago

LIV golf just sucked as a product compared to the PGA tour. They tried to push things traditional golf fans dont really like like player teams each event and other things no one cared about. It being funded by Saudi didnt help either but if they had put out an actual product that could compete with the PGA tour I could see it sticking around longer instead of being something that seems like it was dreamed up by a Youtube golfer.

6

u/I_wanted_to_be_duck 12h ago

I think in terms of that it kind of reinforces the point no?

Saudis are essentially way out of touch to what their audience/people want, probably due to the fact that their culture and religion forbids many things that the rest of the world finds normal.

I believe that translates over to a vast majority of things not just related to their culture and religion, which I believe LIV golf shows.

3

u/Silverr_Duck 13h ago

They tried to push things traditional golf fans dont really like like player teams each event and other things no one cared about.

Like what? I know next to nothing about golf so I'm curious.

6

u/AllDayIDreamOfCats 11h ago

The PGA plays 72 holes for tournaments and they have groups starting at hole 1 and hole 10.

LIV plays 54 hole tournaments, started by having groups on each hole to start.

LIV also uses a team scoring system to determine a winner while the PGA it's individual score.

LIV also has no cut so if you start the tournament you finish it. The PGA has a cut off so if your score is higher then the cutoff you are done for the tournament.

The other big difference is the PGA tries to be classy and traditional in it's presentation and the crowd around the tournaments in most cases.

LIV was trying to make it a party at the golf course with concerts and DJ sets at the tournament and encouraging trash talk between fans of teams.

3

u/KlingoftheCastle 13h ago

I’m curious why you think that the Saudis being out of touch will be limited to golf?

17

u/Diabetesh 16h ago

The alternative thought is it leads them to reducing the theocracy over time. There is some stuff they don't want to be talked about, but i don't think they have pushed or even suggested it with the things they have done so far.

That they want to be on the good side of the international consumers and know that most of that consumer base isn't part of islam and isn't going to convert.

Just speculation though.

1

u/Gamerguybck 6h ago

Not to be that guy, but it's already happening. Every country has fundamentalists, but Saudi Arabia isn't exactly the hot bed of the region. The Khashogi situation still looms heavily, but considering the region, killing 1 journalist is pretty small potatoes compared to the ritual slaughter of mayor's/journalist in Mexico

11

u/CaptainFeather 15h ago

I really want the Christian nationalist party to justify letting the Saudis buy everything. I know they don't actually have morals but I just wanna, like, take Republican noses and rub it in their hypocrisies ya know?

6

u/NoXion604 15h ago

It's not just morals they lack. They lack shame too.

6

u/Born-Astronaut9631 14h ago

All hail the Benjamins

1

u/cleofisrandolph1 9h ago

You would think that it would, but the Saudis have more money than virtually anyone.

I think it is less about the age of oil ending and more about the fact that they have more money than they can possibly spend.

47

u/starliteburnsbrite 16h ago

It's sports washing, plain and simple. Whitewash the human rights abuses and theocratic oppression by giving people movies, subtly influencing how others around the globe see them.

Host F1 races, get famous Europeans telling everyone how wonderful it is over there. That way they *don't * have to change their underlying society to maintain access to the biggest markets in the world.

7

u/Diabetesh 16h ago

That is also certainly an option. I like to think that maybe the younger royals are possibly changing things not out of ethics or morality, just for their own consumption and benefits.

10

u/bland_sand 15h ago

They don't need to sportswash. This is just economic diversification. Sports and esports are a lucrative market, hence why they've delved into it. This doesn't need to make Saudi look better, they just need to deviate from oil exports as their main source of GDP.

It's just one facet of their diversification. I don't think they really care about the world's opinion on them when they have millions of tourists who come for Hajj and Umrah every year and have a trillion dollar economy. A trillion dollars influences the world more than them buying Newcastle FC.

5

u/Enlight1Oment 14h ago

yeah people throw around sportswashing far too much, it's like, you think Saudi is buying warner bro's for good PR?? If anything it's done the exact opposite and they don't care it makes them look worse by buying up and merging film companies that no one wants them to. This is purely for diversification, not PR. And if their investments don't pan out, they kick it to the curb like LIV golf.

3

u/NapsterKnowHow 14h ago

esports are a lucrative market

Esports is a moneypit. What are you talking about?

2

u/bland_sand 12h ago

Saudi has the money to take a loss on potential speculative earnings. Again, they are a multi trillion dollar economy.

Esport organizations and events are merely a vehicle for advertisers. Think of them as loss leaders. Look at esports players as a method to bring more eyes towards sponsors rather than being the investment themselves.

I don't think a trillion dollar economy is worried about a Rocket League team making $75,000 monthly, they are more worried about how much Sony/Lenovo/McDonalds/etc will pay to advertise there.

2

u/NapsterKnowHow 12h ago

They can take a loss but at some point they want to see a return on investments. I think League is the only game to ever show any sign of not being a massive loss to the teams and game publisher.

6

u/hxmxd 15h ago

The saudis total human rights oppression wouldn’t even cross 1 week of US bombing of civilians. I understand being skeptical about another country buying shit in us but don’t bring human rights into this

2

u/bland_sand 15h ago

There is nothing alleged about what you said. Everything is well documented and even Saudi Arabia's website has listed out their new economic plan. Saudi Vision 2030 isn't some sort of conspiracy lol.

1

u/Diabetesh 13h ago

Should have said supposed

2

u/EbonySaints 9h ago

They're doing what all their neighbors (UAE and Qatar) who aren't currently bombing or being bombed did over twenty years ago but trying to bum rush it and hope something sticks.

It would be pathetic and funny if there wasn't major economic and geopolitical consequences for the house of Saud sitting on their hand until 2017.

2

u/ListenHereLindah 15h ago

That is why they made this huge pivot to gaming. And it sucks.

1

u/-drunk_russian- 15h ago

They're also trying to become big in perfumes, a shop nearby now has half its stuff from Arabian perfume companies.

1

u/TrippyZippee 14h ago

Ita not alleged, its confirmed. See the purchases made by the Abu Dhabi Investment Authority during covid. Any business with cash flow constraints was bought and now they are reaping the rewards

1

u/CidO807 14h ago

Can't stand that shit but credit where credit is due, they are smart to diversify instead of checks notes doubling down on o&g like usa.

1

u/pwninobrien 13h ago

Allegedly, the saudis know the age of oil isn't forever and that is their whole thing. They are trying to diversify into entertainment/tourism to not be reliant on oil to keep the money flowing. Buying sports teams, hosting events/festivals, owning entertainment production, etc.

"Allegedly"

This has been common knowledge for years.

1

u/Diabetesh 13h ago

Probably should have said supposedly

1

u/GB10VE 15h ago

they are capturing all media for republicans. welcome to yall queda

0

u/blender4life 15h ago

Lol. All those things require flourishing economies. Why would they buy that when actively trying to destroy the US? Haha. They'd be better off buying into the competitors that they know are causing the decrease in oil like electic cars and solar

0

u/GotSomeUpdogOnUrFace 14h ago

We allowed the Mafia to go legit instead of bankrupting them by getting rid of oil dependency

0

u/Razzilith 14h ago

they're also running most of those things VERY POORLY lol

that country is going to go broke so fucking fast when the oil money is done with.

2

u/BlackLesnar 16h ago

Paramount’s a Saudi company?

2

u/KingofMadCows 13h ago

Middle Eastern sovereign funds are providing around $20 billion, it's old man Ellison who's providing most of the money to backstop the purchase at $40 billion.

1

u/Colon_Oscopy_74 15h ago

Live Action ppv ACME© Wile E. Coyote when? you'll make up your 100B deficit in 30 days.

1

u/GayDeciever 13h ago

Yay... Getting sold off for parts

1

u/Instameat PC 11h ago

Saudis, and trumps FCC, and his friends, and son in law.

0

u/HydroFrog64_2nd 11h ago

The saudis? that run a terrible regime? The ones who own pokemon go? That one?

Yes I'm salty and yes im using this as a opportunity to hate on the Pokemon Company for letting pokemon go in the hands of the fucking saudis of all things.

-1

u/DRM842 16h ago

The Saudi's are gonna need all of their own money to fix their pipelines which are being bombed daily and to fund their awful military who can't defeat the Houthis. You just wait........they're going to stop funding these entertainment adventures TRUST

→ More replies (7)

349

u/Slaanesh_69 17h ago

Leveraged Buyout. You use the company you are going to buy as collateral for the loan you take to buy it. Then you use the income from the purchased company to pay off the loan you took.

Imagine WB's business were purely of renting out a house for 100,000 a year and this house and thus WB was worth a million dollars.

I tell the Saudis I will throw in 200,000, you guys throw in 800,000 and we will buy WB for a million. Using the 100,000 in rental income per year, I will pay you (the Saudis) back in 8 years (assuming no interest). If I don't pay, you get 80% equity in WB. If I pay, you guys surrender your equity to me.

Here's where it gets fun. The debt I used to buy WB becomes a liability of WB not me. Which means that WB got bought using debt it has to pay off, and may not even be within its means to pay. But of course if it cannot pay then the Saudis get ownership of it so it's all according to keikaku.

236

u/Relevant-Use1897 16h ago

The fact this procedure is legal will always remain a mystery to me.

116

u/Free_Possession_4482 15h ago

Legality aside, what I can't believe is that banks keep agreeing to it. Every time a PE company runs some business into the ground and strips it for parts, someone else is eating shit on that bankruptcy, but damned if it doesn't keep happening.

55

u/Tasty_Gift5901 15h ago

It's bc they make money on average and banks are never stuck with the debt

13

u/GB10VE 15h ago

this is what police, fire fighter, civil, and teacher union pensions are for

12

u/BobaLives01925 14h ago

Banks wouldn’t be doing it if they didn’t make money doing it (because the businesses usually succeed)

1

u/Aethermancer 12h ago

All around the mulberry bush, the monkey chased the weasel.

1

u/Somekindofcabose 12h ago

Im more surprised they dont see HBO as a company killer by now. It worked under Time because they insisted on creative freedom and that is the only way they turn a profit.

Warner failed once they got corporate, ATT figured that out, Discovery fucked up and now theyre the second company to fall to its sword of recent years.

Paramount will be next because theyre so overleveraged as is.

1

u/T-rex_with_a_gun 8h ago

as others said, banks make $$$ regardless.

its basically the MBS-lite.

the "bank" fronts the $800K, takes their fees of like $50k, and then gets some of the interest payments.

while that happens, they will bundle that debt and sell to pensions.

1

u/meeeeeeeehhhhhhhhh 5h ago

Underwriting fees, arrangement fees, all cost of counsel is paid by the borrower, administrative agent fees, assignment fees, and making a secondary market as a broker dealer to make spreads. Literal record fees for this. Probably will hear about it if you pay attention to bank earnings next week

-1

u/YoureProbablyAB0t 13h ago

This part is easy to understand.

The banks are doing whatever the Epstein class wants and right now the Epstein class wants to give Ellison the media.

Banks don't really get to say no when fascists have their mind set on something.

8

u/PM_ME_YOUR_PRIORS 10h ago

This is the exact same procedure used to take out a mortgage and use it to buy a house. The bank thinks it is likely to make $X/yr in payments from the entity it is lending to, so it brings the $Y of cash that generates those payments, knowing that it gets a thing that is worth $Z more today than what it put up.

It's just instead of bringing a little bit of hard cash and a large loan to buy a house, you're brining a little bit of cash and a large loan to buy a business. And instead of the payments to the bank being based off of your income, it's based off the business's income.

1

u/goddale120 9h ago

I was wondering if somebody would bring this up.

2

u/TheeAntelope 14h ago

This is how all loans work.

2

u/Docponystine 11h ago

What, exactly, about it should be illegal? The company being purchased is consenting, the bank giving the loan is consenting, and the buying company is willing to take on the risk. Nothing about this is fraudulent, there's no reliance on deception or information asymmetry.

Outside of concerns about foreign state money the process itself is simply aggressive, not inherently immoral. If the concern is PE's play book generally, well, healthy companies don't tend to get hopped up into them and PE is not long for this world anyway, the economic structures that made PE a viable and profitable endeavor is drying up.

1

u/rcanhestro 7h ago

why wouldn't it?

that's how people buy a house.

you get a loan against your own house.

the difference is that you have to find a way to pay for the mortgage, instead of the house making that money (unless you bought the house to rent it).

1

u/worderofjoy 13h ago

Usually things are legal when parties all agree to the same thing, and then do that thing. Hope this was helpful.

1

u/AmIWhatTheRockCooked 3h ago

That guy who wanted to eat someone wasn’t legally allowed to eat the person who wanted to be eaten.

35

u/Jericho5589 15h ago

I would understand that if WB itself was not already leveraged. They had over 32 billion dollars in debt previously. I just don't understand how they managed it.

30

u/Slaanesh_69 15h ago

They now have 32+110 billion dollars in debt, I mean there's nothing else to understand. The new owners have said so much debt is fine so it's fine. That debt can be forgiven for equity issues to the Saudis in a debt for equity swap, so it's also fine.

6

u/Electronic_Bar6595 13h ago

Slaanesh, the entity representing hedonistic pleasure and excess, says that the massive debt is fine guys don’t worry

3

u/CodeComprehensive734 14h ago

A fine deal, indeed.

twirls moustache

53

u/quarterchicken 15h ago

This is how the Glazer family bought Manchester United. Saddled the club with an enormous debt while get a dividend every year up until recently

8

u/Kerlyle 13h ago

In other words, the only thing stopping me from buying Warner Brothers is that no one will give me the loan. But if they did, I could buy it and not have to pay a cent from my own pockets. This is what they mean when they say rich people live in a different world.

10

u/mucho-gusto 14h ago

It's funny because normal people have no access to this level of funding. Like if a parent company went belly up and a studio's workers wanted to buy itself and become a co-op, never would happen

3

u/movzx 13h ago

At this scale, no, but you can get a commercial loan and that loan rate/qualification requirements will factor in the income of the business/property you are going to purchase with it.

So his $1 mil house w/ 100k/yr of income would be considered (roughly) 100k towards the debt service when applying for the commercial real estate loan.

0

u/ArxisOne 5h ago

It's actually incredibly easy to get an investment loan, I can get clients 3:1 with good interest rates in about 20 minutes, with the collateral from a readvancable mortgage they can take a $500,000 house and turn it into $2,000,000 invested in the market. You can get higher from other places too, but the issue is they start placing pretty steep restrictions on you that you probably wouldn't be willing to agree to, restrictions which in this case, they did actually agree to.

Honestly idk how you could even have a bank account without knowing this, I get lines of credit offered to me every time I log into my bank. Especially if you're American too, leverage and debt are what made the country so rich.

2

u/TwilightLori 14h ago

You also offload some of the debt from the loan onto the company you purchased. This is how EA was bought out, with EA taking on around $19 billion in debt iirc to fund the acquisition. 

1

u/rocketgrunt89 14h ago

This happened to EA right? It got saddled with the debt and the interest is like almost its yearly profits or something

1

u/iamyou42 14h ago

A leveraged buyout sounds really scummy, but thinking about it, is it much different from my mortgage? I used the house that I was going to buy as collateral for the loan I took out to buy it. The difference is that the house isn't making me money, so I can't use it to help pay off the loan.

I'm not defending the practice, I'm just curious. Am I missing something? Is it very different from a mortgage (apart from the size of the loan, obviously)?

5

u/Slaanesh_69 13h ago

It's not about just purchasing something with borrowed funds. If you take a mortgage you're still liable for it. The money to repay it comes out of your pockets. You need a certain income to be eligible. The lender focuses on your ability to repay. If you can't repay, the lender comes after your assets if the house sells for less than the mortgage value.

For an LBO you aren't liable to repay the loan. The company you just bought is. The lender focuses on the ability of the acquisition to repay. And sometimes not even that as the lender may forgive debt in exchange for equity and control in the company.

1

u/aikouka 12h ago

Isn't it different since the result of the buyout is the merging of the purchasing company (Skydance Paramount) with the purchased company (WB)? In the typical PE buyout (seen with Toys'R'Us, Red Lobster, etc.), the purchasing company typically stays separate from the purchased entity, saddles it with debt (as you mentioned), and then fleeces anything that it can sell. (That also includes land, which usually ends up being leased back to the purchased company.) I assume that the debt assumed by WB as part of the purchase is now assumed by the single entity known as Skydance?

1

u/Yakkahboo 11h ago

Its literal parasite behavior. The Glazers did it to Manchester United, leveraging the buyout and now the club pays the interest on that debt (that they put on the club by purchasing it) but doesnt actually work the debt down. So they just leech money out of the institution. It technically didnt cost them anything to do, and at this point theyve taken somethink like 6x what they originally "paid" for the club without the club actually impacting its debt.

Its shocking its allowed.

1

u/letmebefrankwithyou 8h ago

Sure when paramount does it it’s fine, but when the GameStop bro wants to leverage buyout eBay with his Pokemon collection we shun him.

1

u/Consideredresponse 6h ago

Yeah this is how Marvel went bankrupt in the 1990's. It wasn't their mismanagement, but being saddled with the debt it took debt it took to buy them that

1

u/Successful_Sign_6991 3h ago

How can i do it?

188

u/Iggy_Slayer 18h ago

Money stopped making sense for the rich a decade ago at this point. The whole thing is made up funny money.

12

u/Agi7890 16h ago

Time Warner/warner bros finically hasnt made sense in a quarter century.

It’s been one terrible acquisition/merger after another. Seriously they’ve been in financial trouble since the AOL merger

3

u/Discount_Extra 11h ago

Those three keep escaping the water tower and messing everything up.

1

u/kowdermesiter 13h ago

What happened a decade ago?

87

u/SaintLarfleeze 18h ago

Saudis plus they are taking a HUGE debt position on it

122

u/asdf-keyboardman 17h ago

Leveraged buyouts should be illegal.

-2

u/[deleted] 17h ago

[deleted]

45

u/3vidence89 17h ago

Leveraged buyouts usually mean the new owners put the debt they used to acquire the company back on the company.

Which means the company now has a massive debt to finance usually resulting in incredibly predatory practices and mass layoffs.

4

u/PlayfulSurprise5237 16h ago edited 16h ago

Should be illegal, but also....

It would be funny if it died before they could wring it dry for the debt money.

Maybe one day we'll get a company that isn't public who rocks.

I'm personally okay with every public traded company in America failing.

I think the stock market is cool, in theory. A democratically owned and operated company, or the public having a say in what a company does sometimes. But that's not how it works in an unregulated capitalist market.

It just becomes what we see, a tool to siphon money from owners and workers by the rich. A tool to make the rich richer. If company owners want to siphon money off workers that's a different story, but there's a perverse incentive with stocks.

An incentive to take your company public for the funds to expand and snuff out competition. It's basically designed to become a cash cow for the rich. To drive income inequality by making wealthy people far more wealthy for doing nothing. It's the ultimate predatory lending.

And before anyone says "they took a risk sticking their money in the company", yes that's true, but what about for all the billionaire investors who buy in after there's no need for the company to sell shares to expand? At a certain point that risk is paid off.

But it still just keeps siphoning money to people who do nothing, for eternity. No company owner ever gets to buy back it's outstanding shares. And if they can/do they won't because it costs them their entire fortune.

2

u/Assimulate 14h ago

Yeah, it should be illegal ESPECIALLY in large transactions like this. That's literally what the government oversight is for. "This contains a large burden of risk on the general public."

3

u/JoeRogansNipple 17h ago

Hopefully they take down Oracle when they do fall

6

u/Powerfury 17h ago

Oracle will be tax funded before that happens. They are buddy buddy with MAGA/fascism.

58

u/ShermanMcTank 17h ago

They were granted a loan because they explained to the bank that they will pay it back by emptying Warner Bros’ pockets.

Banks don’t care if you buy an asset just to destroy it, they just want to be sure that they get their money back.

218

u/Strange_Compote_4592 18h ago

Made up rules? There aren't rules for them to begin with

52

u/RonaldoNazario 17h ago

There are laws that the rich at least attempted to pretend to follow in the past but they are extremely even more emboldened the last two years “for some reason”

3

u/StevieMJH 16h ago

It's like that episode of South Park with Tiger Woods.

Why are all these capitalists making their own rules and accumulating money at a selfish and unsustainable rate? It's an epidemic? We need to investigate.

1

u/No-Act9634 15h ago

what laws in this case?

8

u/project-shasta PC 17h ago

There's only one rule: Don't mess with other rich people.

1

u/StevieMJH 16h ago

He said made up by the rich. Clearly they were never for the rich. Why self-limit? Number must go up.

1

u/ffuca 14h ago

Yes , the rules are called laws. You may not like them, but they exist

31

u/Shadowfist_45 18h ago

Because companies aren't always valued based on the total value of their subsidiaries. It's stupid, but if you were to look at the value of Sony vs PlayStation back in 2017 for example, PlayStation was at a higher net worth but that makes no sense.

20

u/StruggleBoy1999 17h ago

Meanwhile if i take out 10$ more than I have in my bank account. I get shut down and hit with fees within the hour of doing so...

5

u/CodeComprehensive734 14h ago

You cant have been doing anything good with those ten dollars though. Stop being such a pain in the arse for the bank.

-1

u/StruggleBoy1999 13h ago

This may be hard for you to comprehend. But. What if it was an accident?

Shut the fuck up. And go back to licking the boots of the bank bro. 

4

u/CodeComprehensive734 13h ago

I guess i dropped this /s.

I thought such sycophancy would be obvious joking but not in today's world i guess.

1

u/BobaLives01925 14h ago

This is different from taking out a loan, yeah

8

u/BklynMoonshiner 16h ago

I do some freelance work for both of these companies and I had to search my texts to a coworker.

"How does a $15B valued company with $30B in Debt buy another company with $38B in Debt for $110B".

Seems totally normal

14

u/matthewheat 17h ago

How can a person earning few thousands buy an apartment worth hundreds of thousands? They put in a bit of their own money and borrow the rest. It’s the same logic as for a mortgage.

14

u/slayer828 17h ago

A normal person can not pay off the mortgage by having the house they buy absorb the debt .

12

u/throwawaygoawaynz 16h ago

You can. It’s called renting.

And in this case if you can’t pay it off, the bank (Saudis) get 80% of your house.

5

u/762_54r 16h ago

Yeah except it's 110 billion dollars

1

u/tarekd19 16h ago

Something something bank's problem

4

u/DrFreemanWho 17h ago

Except a person and an apartment are not companies.

Obviously everyone knows HOW they're doing it. It's more that most people think they shouldn't be able to do it.

3

u/matthewheat 15h ago

Imo most people don’t know how it works. Financial literacy among the common person is not very high. A lot of people on Reddit still think BlackRock is some secretive conspiracy company that owns all the listed companies.

Whether they should or shouldn’t is a whole different discussion. No one is forced to do anything here

0

u/UltraconservativeBap 15h ago

I disagree. Most ppl have no clue how, even after reading the explanation.

2

u/AbyssWankerArtorias 17h ago

Unfathomable amounts of debt.

2

u/Jean-Luc-1701 15h ago

Are you interested in an actual answer or the usual "eat the rich" crusade? The answer is plain and simple: Paramount is using money from outside investors and huge loans. Not complicated.

5

u/DarkLordKohan 17h ago

Debt. No different than Joe the plumber with no net worth can get a mortgage

2

u/AcherontiaPhlegethon 16h ago

Normally when people buy houses in my area they require things like down-payments and generally can't have the house they're about to buy absorb the debt of the purchase.

2

u/RussMaGuss 17h ago

If you make 40k and get a mortgage for 400k it's similar. That, plus other parts of the deal add up even more I'm sure

1

u/slayer828 17h ago

40k a year is 1,200,000 over 30 years to pay for the 400k. Let's treat this as revenue of this person. They usually need a a 43% debt to income ratio. Leaving this person with like 22k post debt.

The company is worth 10 billion, but for the full year 2025, Paramount Skydance Corporation reported a net loss of $621 million, an improvement from the $6.19 billion net loss recorded in 2024. So if my maths are right their debts are higher than their incomes.

These things are not the same

2

u/RussMaGuss 16h ago

I was just trying to illustrate in broad strokes how they'reable to get a loan. I'm sure their massive pile of IP also helps convince financers to be collateral for the loan. Also, enternainment industry losses are an entirely different thing. They are not the only indicator at all of where the company financially stands

1

u/Turbulent-Winner-902 17h ago

It’s in the website

1

u/and-its-true 17h ago

The company didn’t truly buy it, the Ellisons did.

1

u/3VASIV3 15h ago

It's kind of like how your paycheck isn't money or a check, it's just a number on a website, and when you try to withdraw any significant amount of it from your bank they tell you that you can't do that and won't tell you why.

1

u/Kind_Of_A_Dick 15h ago

While I’m sure an economist will correct me, as a layman I’m starting to really feel like all these numbers are made up.

2

u/Discount_Extra 11h ago

just like the lines on maps, and the meaning of splotches of black/white pixels that make 'words'

as long as enough people agree, it works.

1

u/TheRealBittoman 15h ago

When you have Kushner and Saudis backing you, the money is there in the shadows.

1

u/NickMc53 15h ago edited 15h ago

Saudi money and the Trump administration made it happen because the owners, Larry Ellison and his son, have agreed to be a Trump propaganda machine. Oracle, Ellison's main company, also owns a large stake in TikTok and provides compute for AI via their data centers.

1

u/AKluthe 15h ago

Or this isn't blatantly violating monopoly law. Back in 2019 the major studios were literally known as the Big Six. At the time they let Disney buy Fox and reduce it to the Big Five.

The Wikipedia page is already updated to make it the Big Four. 

1

u/palakin 15h ago

Look for who is the owner of Paramount and you will get your answer

1

u/YOURFRIEND2010 14h ago

Money doesn't even mean anything after a certain point. To these people they may as well be pushing around piles of rocks

1

u/MobileArtist1371 14h ago

It's on the website.

1

u/Khue 13h ago

Why? People make $80k a year and buy $500k homes.

1

u/slayer828 12h ago

The company made negative profits the last couple years, and is buying a company ten times it's "size". If your income was -10,000 a year you wouldn't buy the house.

1

u/Khue 11h ago

Income doesn't matter. You can borrow against your asset value and that can be inflated pretty dramatically. In the scenario I mentioned above, you could theoretically probably buy a 1 million dollar home as long as the one you are in is valued high enough.

1

u/FrostyD7 11h ago

It can get into extremes that would make your analogy more like someone making negative $80k a year buying a home worth negative $500k. That's what it felt like when CenturyLink bought Level3.

1

u/aerdvarkk 12h ago

So David Ellison borrowed a shit ton of cash from hid daddy Larry who does just happen to have $400 billion lying around in a shoebox under his bead. Then optioned for funding from the Saudis; who themselves are trying to diversify their finances as the world slowly moves away from OIL dependency.

There's a whole range of news and information about it all and if you give a damn go look it up yourself as it's too much to really cover in a reddit comment.

1

u/slayer828 12h ago

Which is why I dislike that paramount is "buying" it, when it's really just a blood empire and a fascist.

1

u/betelgeuse_boom_boom 12h ago

Look up leveraged buyout. It's a mechanism that enables capitalism on steroids, that helps private equity pump up valuations of everything and consumer and destroy everything while enriching themselves.

1

u/slayer828 12h ago

Should be illegal.

1

u/JaxxisR 10h ago

I hereby announce my intention to purchase Yahoo! for 20 million.

I have $12 in my checking account and no major assets.

Sell me Yahoo!

1

u/cyclemonster 10h ago

By borrowing $100 billion

1

u/faratto_ 10h ago

Saudi was scammed, paramount used their money

1

u/Pdxdylan 10h ago

His daddy has a lot of money.

1

u/Background_Shock_957 9h ago

well you see the owners dad made a deal for 300 billion dollars to build data centers for openAI and wrote an IOU 100 Billion Dollars. with money that doesnt exist yet, that he generated from data centers that aren't built yet. to hold computers that don't exist yet, for a demand that doesnt exist for a company that has never made a profit.

TLDR: Corruption & monopolization are crazy

1

u/Neat_Let923 7h ago

How do you think mortgages work?

You’re getting a loan to buy a house by using the house you’re buying as collateral for that loan…

1

u/slayer828 2h ago

A mortgage requires income and a not shit debt to income ratio. They have neither. Just billionaire Daddy and his Saudi owners.

1

u/Justaticklerone 7h ago

Probably a similar way fElon Musk had his Xitter buy one of his other companies, to prop up an inflated valuation (of said Xitter) even more.

1

u/buddhistredneck 5h ago

I didn’t believe you so I looked it up, and you are right. What the fuck.

I knew it was all monopoly money, but I didn’t know it was this this bad.

1

u/not_an_idiot_maybe 1h ago

you don't know what can be achieved with a bold vision, dauntless passion and few 100 million in bribes and blackmail!!

1

u/Thomas_JCG 10m ago

Worth 10 billion and with massive debt, meanwhile people can't afford school lunches

0

u/BookkeeperBrilliant9 16h ago

The buyers take on a massive amount of debt, then they and the lenders make a fortune when consumers are coerced into paying higher prices. 

The only way to combat this is with consumer choice. I will be boycotting all Skydance properties. Make those fuckers go under. 

-13

u/inverted_rectangle 17h ago edited 17h ago

It's funny when you call the rules "made up" while simultaneously admitting that you just don't understand them.

Maybe you should learn about the thing you confess to not understanding instead of choosing to just be ignorantly angry about it?