Inside Larry & David Ellison’s $200B Media Empire

Let's talk about Larry and David Ellison. They're making massive media moves both in legacy and social media. Let's talk about the legacy stuff first. Paramount Sky Dance merger is basically a month old and already CEO David Ellison, that's Larry Ellison's son, is looking to acquire Warner Brothers Discovery. As you probably know, they're run by David Zazlov. They own CNN, HBO, DC Comics, Discovery, a bunch of other brands. And that would put the Ellison's in charge of not just CBS News, which owns 60 Minutes, they would also own CNN, as everybody knows, Larry Ellison, big

GOP donor in the past. And there also are reports, interestingly, that David Ellison wants to buy the free press from Barrett Weiss for 200 million and put her in charge of CBS in 60 minutes. That would be seismic in the news business. If you put those assets together, 200 million paid subs. HBO Discovery, 120 million paid subs right now. CBS reaches 80 million paid with Paramount Plus and The Free Press is obviously niche and brand new. Uh but they're growing. They got 136,000 paid subscribers and, you know, almost a million followers across their social media. The second piece to this puzzle that's super interesting is social media. Oracle is now the heavy favorite to acquire Tik Tok and uh Trump

said that was going to happen as part of the US and China negotiations that are ongoing for trade. So what are your thoughts here Freedber? You wanted to talk about this is an interesting collection of assets coming under the Ellison umbrella. Is this strategic? Is this vanity? Is it a nepo baby with a huge pay, you know, blank checkbook? What are we seeing here? And what do you think? I mean, what do you do when you're worth a couple hundred billion dollars and you're 81 years old and you're thinking about what legacy you want to leave behind, except to perhaps empower your kid to build the largest, most influential media company in history.

And I think that's the story that's unfolding in front of us. Not to mention, I think that the Tik Tok deal and Ellison's role in Tik Tok is going to be instrumental in realizing potential future distribution. So, if you think about the way media has evolved, it used to be kind of centralized studio-based production models, the old Paramount, the old Warner Brothers, etc. And then there's been a lot of streamers that have come on that started to syndicate that content and contract for production of content like Netflix. And obviously, Paramount Plus and HBO Max have their own streaming services to deliver their own content. But at the end of the day,

there's kind of two big behemoths that each come at it from a different place. One is YouTube and the other one is Netflix. Netflix has historically been in the kind of scripted production or contracted production side and YouTube in the social production side. The alternative to that might be this consolidated merger and Tik Tok and now Larry Ellison's going to have a hand in both. And so there may be and I do think that there's going to be this convergence between this kind of socially generated content platform like a YouTube like a Tik Tok and the high value produced content like the studios like Netflix has been doing. And the

reason is Netflix has had to compress margins on the content creators, and we talked about this at our summit last week, where a lot of the creators now that went to Netflix to get good deals or went to Amazon, they're all finding that the budgets are getting cut and that the only way these folks are going to get paid is like cost of production plus 10%. with cost of production getting squeezed and budgets getting squeezed by Netflix. So, as a creator, you may actually make more money by taking your content to a bigger audience with sponsors or advertisers on YouTube. And so, a lot of big-time creators, by the way, the audience at YouTube is over 10x bigger than it is on Netflix. So,

Netflix is only paying to retain subscribers now. You know, subscriber growth is kind of slowed down a bit. At the end of the day, Netflix is just spending money on content to keep people on the platform. So if you take the incredibly rich content and production capabilities of HBO and all the Warner Brother discovery media properties and production houses underneath this combined company and you combine that with the direct to consumer distribution of Tik Tok, there may in the future be a merger between this media company and Tik Tok or a deep commercial relationship where imagine going on Tik Tok and you can now get premium content for 10 bucks a month or two bucks an

episode and watch all of your HB shows in the Tik Tok app or watch all of the discovery shows or all of the other content that's available. So, I do think that the distribution that has been delivered by this kind of social media model like YouTube and Tik Tok combined with the premium model may end up creating a real category killer that can challenge both YouTube and Netflix. And so, I would kind of look at this story as like a beginning of an unfolding of something that may rewrite the entire media landscape. I mean, when you look back on it, Freeberg Katzenberg ha was maybe ahead of his time with Quibby. He wanted to try to make this bridge between the two the and and he just

might have been too early or just didn't execute. Well, think about the network effects. What made Tik Tok so big and what made YouTube so big is the long tale of user generated content and that's what drove the audience and that's what built the the platform mainstream, right? And Yeah. Well, then you can do the the premium stuff on top of it. Yeah. Yeah, but when you try and create premium content in a small way like Katsenberg tried to do, it's very hard to build the audience to make the economics make sense. And the economics are really challenging already with premium content in the big

players as you can see with Netflix. They're they're compressing budgets. So I would I would argue that you really need to have them both to make the model work now because the audience is so attuned to user generated content. Here's what our partner Poly Market, shout out to my guy Shane, 84% Larry Ellison or Oracle kind of the same thing here. They put a slash acquire Tik Tok that's up over 20 percentage points in the last couple of days. What do you think all this means? The the divevestature of Tik Tok, Larry Ellison getting it as opposed to Google, Apple, Microsoft. I mean, there was so many people maybe even Elon who might have wanted Tik Tok. What do you think of

this divevestature? And then uh our government gets the golden vote now. I understand that the US government will have a seat on the board of uh Tik Tok. So the Chinese have given it up except for the algorithm. What are your thoughts? Remember it's Tik Tok. It's Tik Tok US. It's only 5% of the over it's only 5% 5 to 8% of the overall Tik Tok business. So Tik Tok US is what's being spun out. Yes. Correct. Chimat what do you what do you think here? I think there's two things that are important. The first is that in the future and this may sound very dystopian but he who controls the algorithm will control what people think. And if you

think about it in that context, you need, as you've said before, a marketplace of very different approaches and algorithms that are essentially fighting for mind share. If you don't have that, you'll have a massive zombie group think culture. So from that perspective, you have to put Tik Tok into the hands of a completely different owner than any of these other social media sites so that they are motivated to compete against each other. That's one. The second thing is there's been a lot that has been said about the Tik Tok algorithm called Monolith and a bunch of it has been already put out openly and Tik Tok was very

transparent and they published a paper. You can find it on archive. You can show the link to it, Nick, maybe in the show notes, but it's an incredible paper that describes a very simplistic approach to essentially moving people into different directions of thought. So if you put all of these ideas together, I think where we are maybe all the way coming back to where we started this discussion about Charlie Kirk, it is increasingly important to make sure that the overwhelming majority of how people get ideas is understood by the rest of the people. Because if you

start to go down these rabbit holes in ways that are algorithmically programmed in models that you don't understand that then push you into extremism, you will end up in a very very very bad place as will society. And then the the outcomes of that are completely avoidable as we're seeing. Yes. So I think that the Tik Tok thing is going to be one of these important moments where we shine a light on the importance of these algorithms. It's poorly understood. It's not well talked about, but I think what the Trump administration doing is important to keep it away from everybody else so that there's more competition.

Yeah, I'm gonna um strongly agree. I think the Trump administration did a great job on this one. Just calling balls and strikes of not making sure meta got it or somebody who has already a lot of algorithmic control over what society seeing. And back to just just on this, you know, the I give a lot of credit to Elon too because his algorithm is open source. We know what's happening there. He just did it two weeks ago. Yeah. If that's open source and Monolith is open source, then I think the next big question we have to ask is what is going on in Reddit? What is going on in meta? How are we how are we guiding and shaping people?

Why does YouTube sometimes for example like our Tulsi Gabbard video is apparently deemed too risque an adult content? Who decided that? How did that happen? An algorithm. Yeah. Not not any human. And you know the thing I think is important to start thinking about here is as an industry we're going to either need to regulate this ourselves or be regulated. I think that there should be regulation and I'm not like super a fan of regulation that algorithms must be disclosed and you must have the option given to you upfront to switch your algorithm. There should be a b ya bring your own algorithm. There should be an algorithm store. And I I talked to Elon

about this publicly on on X many times. If you could say, I want one that just gives me a chronological feed. I want one that is from the highest quality sources. And then you should be required to show what the default algorithm is doing. And if you don't do that, I think you should lose your section 230 because an algorithm is more powerful than an editor at the New York Times or an editor at HBO or Netflix deciding what we see, deciding what goes on the homepage. The algorithm is a black box and who knows who's controlling it. And then what happens in society when young men are pushed towards more and more fringe content, more and more dark

content? Why not just have all this be transparent? Why not let people see? Unfortunately, they don't need to be pushed to fringe content. All they need to do is go to a school where the woke curriculum has been mainstreamed. And bingo. Randy Weingard's foot soldiers are saying that conservatives are fascists. So you're acting like you got to go through some weird rabbit hole to embibe these ideologies when all you have to do is attend a public school and probably a lot of private ones, too. I think Dalton's probably the worst. So again, I you're acting like the radicalization's coming from the fringes. I think what's so concerning about where we are as a

society is that radicalization is coming from our institutions or a lot of these institutions. You're not going to get an argument with me. I think these schools should be teaching, you know, basic skills and they should not be involved in the culture wars in any way. I don't think any parent is sending their kids there. And if you are a parent and you're in California, I I would encourage you to figure out what they're teaching your kids. Uh, and here in the great state of Texas, it's quite totally agree. But hey, can I can I It's quite different here, by the way. And it's quite different here in the

great state of Texas. I can tell you having lived in both places with three kids,