[HN Gopher] The worst acquisition in history, again
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The worst acquisition in history, again
Author : JumpCrisscross
Score : 72 points
Date : 2026-03-06 21:07 UTC (1 hours ago)
(HTM) web link (www.profgmedia.com)
(TXT) w3m dump (www.profgmedia.com)
| jmclnx wrote:
| They could be right, but I still have to go with Compaq buying
| Digital. Just about everyone working in IT in my area thought
| that was a crazy move by Compaq.
| mikestew wrote:
| I dunno, look at the numbers in TFA. TFA is a bit lengthy, but
| worth the read. I think Compaq bought Digital in good faith,
| even if it went poorly. Whereas even an idiot like me can look
| at those numbers (in summary, you could buy Disney for the same
| money) and see Ellison buying a new toy for Junior to play
| with, rather than a well-thought business deal.
| alephnerd wrote:
| The Compaq acquisition made sense - it gave an upstart in
| Houston the distribution it needed to expand into enterprise
| and survive in an increasingly commodified PC and Server
| market.
| bdangubic wrote:
| amazing that people still write articles like this and get away
| with it... everyone knows why this purchase was made and this
| mate is discussing things even my 12-year old would not bring up.
| X purchase maybe was understandable discussion but in 2026
| writing article like this is borderline "criminal"
| rgbrgb wrote:
| > everyone knows why this purchase was made
|
| you should say what you're talking about because I for one have
| no idea.
| cyanydeez wrote:
| Its a cynical media control strategy to prevent taxes on the
| rich.
| ViktorRay wrote:
| This doesn't make sense. Surely paying taxes would be
| cheaper than buying Warner Bros?
| cyanydeez wrote:
| 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.
| afavour wrote:
| 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.
| warkdarrior wrote:
| Even if that is indeed the motive, the article is useful in
| showing how from a financial perspective this is bad deal
| for Paramount.
| afavour wrote:
| 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.
| bdangubic wrote:
| didn't think I had to actually explain it :)
| DaveFr wrote:
| 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.
| CodesInChaos wrote:
| If that's the case, shouldn't they have been able to work
| out a much cheaper deal with Netflix where they get CNN and
| Netflix everything else?
| ajb wrote:
| He's probably talking about this:
| https://www.972mag.com/ellisons-paramount-tiktok-israel-
| medi...
| samrus wrote:
| Elaborate please. This is the place for insiders to inform
| others
| bdangubic wrote:
| After this merger, how many MSM outlets (including social
| media too) will not be in control by right wing billionaire
| nutcases? It is like when people for months discussed how
| much value X lost after Musk bought it (it was the greatest
| single investment made by any human ever)
| popalchemist wrote:
| It was an elaborate scam between Trump and his billionaire
| buddy (and contributor) Ellison to make money in various ways
| (both the acquisition as well as driving down shares in
| Netflix so Trump could buy the dip - as was reported earlier
| in the week) as well as to MAGA-ify the entertainment
| industry further.
|
| It's all a grift.
| lotsofpulp wrote:
| Why is Netflix in the "Big Tech" categorization in the "value in
| market cap" graphic?
|
| I do not see how Netflix's primary business is any different than
| the businesses in the "Hollywood" categorization that also pay to
| make media and then sell it.
|
| Apple and Amazon can be in a different category because making
| and selling media is an ancillary part of their business.
| Alphabet does not make or curate any media, it just distributes
| it.
| Forgeties79 wrote:
| My guess is because Netflix gets money from subscriptions,
| which is a very different revenue model from traditional
| Hollywood. But again, completely a guess
| lotsofpulp wrote:
| I am under the impression traditional Hollywood also got much
| of its money from subscriptions, it just happened to pass
| through a middleman known as the cable or satellite TV
| company. Hence the constant threats of not being able to
| watch so and so channel due to contract dispute of "carriage
| fees" or whatever they called the amount per subscriber that
| a cable/satellite TV company paid Warner Bros/Disney/etc.
| samrus wrote:
| Netflix is a streaming platform first and an entertainment
| studio second.
|
| Its like youtube if youtube red didnt fail
| kgwgk wrote:
| Netflix may be a streaming platform but it's streaming mostly
| Netflix's content.
| lotsofpulp wrote:
| The streaming platform and entertainment studio cannot be
| considered 1st and 2nd things in 2026. The streaming platform
| is the delivery mechanism of the product made by the
| entertainment studio, no different than what
| Disney/Comcast/Paramount/WarnerBros Discovery does.
|
| Youtube Red just got rebranded as Youtube Premium, and does
| not seem comparable because Youtube does not curate, it just
| sells advertising spots, and subscriptions to be able to skip
| ad breaks. You can watch any random person's content on
| Youtube or Youtube Premium, but you cannot on
| Netflix/Disney/etc.
| arthurjj wrote:
| Netflix pays like a Big Tech company, is valued like a Big Tech
| company and was part of FAANG. 10 years ago the streaming tech
| they had was fairly high tech, even if it's now pretty
| standard. So they're considered Big Tech for historical reason
| raw_anon_1111 wrote:
| There was no world that Netflix should have been part of FANG
| (notice the missing A as original conceived by Cramer). At
| the time it was coined, Apple was already the most valuable
| company. But was left out as was Microsoft
| travisjungroth wrote:
| It was the companies that were performing well in the stock
| market. Microsoft and Apple are much older and didn't have
| the growth those did.
| est31 wrote:
| They also have their own global CDN, while Disney/HBO et al
| use various third party CDNs.
| alephnerd wrote:
| > I do not see how Netflix's primary business is any different
| than the businesses in the "Hollywood" categorization that also
| pay to make media and then sell it
|
| Netflix owns distribution and owns+sells VFX and animation
| services via Eyeline. Most "Netflix orignals" aren't actually
| produced by Netflix - Netflix just takes a capital stake in a
| production that was already in the works by an existing
| production company.
|
| This made Netflix closer to Valve, and allows their IR team to
| make a valid case that they should be compared against (and
| thus deserve a valuation) comparable to other tech companies.
| alephnerd wrote:
| Something I've mulled about this acquisition is that it appears
| to be a form of succession planning by Larry Ellison for his kids
| David (Skydance) and Megan (Annapurna).
|
| Oracle was always an Ellison driven enterprise, but neither David
| nor Megan had much aptitude or interest in enterprise SaaS, and a
| newer generation of operators took the reigns at Oracle in the
| 2010s like Catz, Hurd, Scilia, Magouyrk, and even Kurian before
| he left for GCP.
|
| Given the ferocity with which this acquisition was fought (much
| more ferocious that similarly political fraught M&As like
| Sinclair) and the relatively weak fundamentals, there clearly is
| an emotional and family succession planning aspect to it.
|
| Ellison has taken similar decisions with an emotional lens
| previously, such as his support for Steve Jobs retaking control
| of Apple.
| cyanydeez wrote:
| Seems more cynical far right media control. You can call that
| succession planning i suppose.
| alephnerd wrote:
| There are easier and less fraught methods to build a
| politically controlled media empire, such as Sinclar's
| methodological and quiet approach, or quietly creating a
| family office that purchases commanding voting stakes in
| media enterprises like Laurene Powell Jobs' Emerson
| Collective.
|
| The Skydance-WBD acquisition was extremely messy because
| emotion was clearly involved.
| gamblor956 wrote:
| David is fairly good at Hollywood production. He's got a
| surprising number of blockbusters under his belt.
|
| It remains to be seen whether his rightward turn is just
| pandering to Trump to get stuff done or if he's gone of the
| rails. If its the latter, the Paramount acquisition will likely
| be regarded as one of the biggest failures of all time.
| pinkmuffinere wrote:
| > With his new toy having a leverage ratio north of 6x, David
| Ellison has promised $6 billion in "synergies" within three
| years. (Netflix Co-CEO Ted Sarandos put the figure closer to $16
| billion, after examining WBD's books.
|
| What is it that these CEOs think they are seeing, that everyone
| else is missing? I can believe they have inflated egos, but
| they're not totally crazy, right? My impression is that Netflix
| is fairly sober and results oriented, so I'm confused by the
| whole thing.
| toomuchtodo wrote:
| Layoffs as you consolidate operations between enterprises. See
| Capital One laying off thousands at Discover Financial after
| their acquisition.
|
| _Capital One to lay off more than 1,100 in latest cuts at
| Discover Financial HQ_ -
| https://news.ycombinator.com/item?id=47270442 - March 2026
| readthenotes1 wrote:
| There is a large history of companies with too much money (or
| access to borrowing) using it to buy up shiny objects. Whether
| it is CEO pride, greed, anger, or envy, it does not seem to
| matter.
| raw_anon_1111 wrote:
| See sports teams.
| alephnerd wrote:
| Succession planning.
|
| This appears to be Larry Ellison trying to manage succession
| for his kids. We'll probably see a second major acquisition
| like this for Megan (who tends to be more progressive leaning).
|
| Larry would not be able to do something similar at Oracle today
| (definitely in the 2000s though), as by the 2010s operational
| control at Oracle increasingly shifted to operators like Catz,
| Hurd, and Kurian. It also would have led to bad blood _a la_
| the Murdochs.
|
| One heir cultivating the right wing (David) and the other heir
| cultivating the progressive wing (Megan) buys a level of
| political impunity for the next generation that is hard to come
| by.
| bluegatty wrote:
| They're buying control of narrative on issues they care about;
| the history of media is mostly that. Newspapers were kind of
| invented for that reason. Our ideas of ethics in journalism are
| fairly modern.
| coliveira wrote:
| Rich people don't buy media companies because this is the best
| business in the world. Quite the opposite, most media companies
| are mediocre or lose money. They do this because of the
| political clout they get with the control of these media
| properties.
| monkeydreams wrote:
| On top of this Ellison is likely to have to sell off the dried
| husk of Cerner in order to fuel his circular AI transactions with
| NVidia.
| james2doyle wrote:
| This article sure uses a lot of em dashes. I see 9 in the article
| body.
| MengerSponge wrote:
| This is the same as acquiring the Washington Post or Twitter,
| right? It's more about media control than any classic business
| case.
|
| Once you start meddling with the money machine it's not just Net
| Profit = Revenue - All Expenses (COGS + Operating Expenses +
| Interest + Taxes)
| jmyeet wrote:
| Control of the media has become more important than the direct
| financial results of that acquisition. We are at a precarious
| point in history and it's becoming increasingly necessary to
| manufacture consent to maintain the American imperial project.
|
| Don't think of this in terms on a financial return on investment.
| A half dozen people control almost all American media because the
| fear is that without the manufactured consent, the entire system
| is going to collapse. Historically, that's tended to result in
| heads on spikes or being hunt from the city walls.
|
| Perhaps it's nihilistic of me but I thought that after the 2024
| election, we're now beyond the point where any of this is going
| to get better through electoral politics. Any democracy now is
| performative. Both sides are bought and paid for. There is no
| significant, organized resistance to any of this. Material
| conditions will continue to get worse.
|
| Think about it: it doesn't matter if you, as Larry Ellison or
| Jeff Bezos or Elon Musk, have $200 billion or $300 billion or
| $400 billion. Like that has no impact on your life. There is
| nothing you can possibly buy that requires more wealth. The goal
| now is to preserve the system at any cost.
| helaoban wrote:
| >Another culture clash, this time between Discovery's unscripted
| empire and Warner's premium sensibilities, a wannabe mogul
| overpaying so he could cosplay as Robert Evans (ask Claude), and
| a 5x debt-to-EBITDA ratio. The good news? The sequel had a short
| runtime. CEO David Zaslav slashed costs, engineered a good bank /
| bad bank structure to spin WBD's declining linear assets, and
| ultimately orchestrated a bidding war that restored shareholder
| value. As an operator, Zaz is Ed Wood (see: the worst branding
| decision in history, deprecating HBO), but as an investment
| banker, he's Steven Spielberg.
|
| WTF is this slop? I've never seen a an article so riddled with
| analogies and pop culture references that actively degrade the
| ability to understand whatever argument might be lurking behind
| the obscurantism.
|
| What body of work has Scott Galloway produced that should cause
| me or any other reader to suffer this kind of self-indulgence
| normally found in a 8th grade creative writing class, in the
| hopes of learning something meaningful about these topics?
|
| Gurus are going to guru I guess.
| HDThoreaun wrote:
| I also find Scott to be an unsufferable writer. It all feels so
| forced
| ggm wrote:
| Netflix use BSD heavily. Oracle is Solaris. It was just BSD vs
| SysV all over again.
| coliveira wrote:
| There is a kind of business people who do most of their money
| engineering failed business takeovers and mergers. A good example
| is John C. Malone. This guys is always involved in some takeover
| or merger of companies, most of the time leading to no gain for
| investors, but he himself became billionaire with this strategy.
| Media companies are some of the best ways to engineer these
| business "opportunities".
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