- This post originally appeared in the Insider Today newsletter.
Hello! You can rest easy knowing Costco's beloved $1.50 hot dog combo is "safe," according to its new CFO.
In Friday's newsletter, I asked whether your opinion of former President Donald Trump had changed in light of his recent felony conviction. More than 78% said it hadn't.
In today's big story, we're examining Skydance's acquisition of Paramount and what it means for the streaming race.
What's on deck:
- Markets: Tech's run as the stock market's golden child could be coming to an end.
- Tech: Layoffs hit Microsoft's cloud business.
- Business: Inside a tight-knit circle of judges and attorneys that fueled a spectacular rise, and fall, of a Texas bankruptcy court.
But first, cut to black.
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The big story
Paramount's happy ending
In a town known for storylines, Paramount's sale didn't disappoint.
The media giant, which owns Paramount Pictures and CBS, has been in the news as an acquisition target since late last year. And just like its movies and television shows, Paramount's sale included twists, turns, and a slew of characters.
In the end, media company Skydance, with help from RedBird Capital Partners and KKR, secured the goods. The deal is expected to be announced in the coming days and values Paramount at $8 billion.
Paramount had no shortage of high-profile suitors. Warner Bros. Discovery chief David Zaslav, media entrepreneur Byron Allen, and private-equity giant Apollo, in collaboration with Sony, were among those who considered buying the company.
Skydance might not be as recognizable a name, but the company's owner and CEO David Ellison is. As the son of billionaire Oracle founder Larry Ellison, he's basically tech royalty.
But all the interest in Paramount this year didn't equate to smooth sailing. The day after broadcasting the Super Bowl it announced companywide layoffs. A few months later its CEO was shown the door. At least one high-profile investor headed for the exits as well.
All the while, Paramount's stock suffered. Even with a nice bump from reports of the deal, shares in Paramount are still down more than 11% on the year.
To make sense of the deal, I turned to one of Business Insider's media experts: Peter Kafka.
Talks of Paramount's sale have been brewing for a while. What are your initial thoughts on Skydance being the one to seal the deal?
Well, it's not sealed yet. This thing may still get derailed by a lawsuit from cranky investors. But if it does go through: It's the least-bad version for Hollywood, since owner-to-be David Ellison wants to keep Paramount making movies and TV shows, and that isn't a foregone conclusion with any other buyer.
Paramount has fallen pretty far behind its peers in streaming. What is its biggest pain point that Skydance will look to address?
Paramount loses money on streaming, like many of its peers. That's fixable. It has a subscale audience, and I don't know how a new owner fixes that.
The deal means one of the richest people in the world is tangentially connected to Paramount. How could that play a factor?
As I've written, the most important thing about David Ellison being Larry Ellison's son is that his dad is helping to finance the deal (what a dad!). But suggestions that Larry Ellison's tech background will help his son run a Hollywood studio make no sense.
As for other streamers, are any happy, or upset, by the outcome of this deal?
The most important question for Paramount isn't "who owns Paramount?" It's "is Paramount big enough to survive on its own?" And that question remains unanswered and unchanged by this deal.
3 things in markets
- The tech industry's crown as the stock-market king could be slipping. Tech stocks have had an incredible run in the market over the past decade. But Bank of America equity strategist Savita Subramanian sees a shift by year-end that favors other sectors due to several factors, including higher-for-longer interest rates.
- How to hedge your portfolio against market volatility. Wall Street legend Gary Shilling offered investment rules to follow to avoid getting blindsided by the markets' sudden movements. That includes pivoting out of China and into India and betting on the US dollar.
- Roaring Kitty is at risk. Trader Keith Gill, known as Roaring Kitty on social media, could get barred from E*Trade, sources told The Wall Street Journal. It comes after he posted a screenshot that appeared to show he had a $116 million stake in GameStop, causing the stock to surge.
3 things in tech
- The future of AI is in the hands of three tech giants. About 65% of global data centers' capacity is owned by three companies: Amazon, Google, and Microsoft. The rush to corner the market on data centers is a move by Big Tech to secure the keys to the coming AI kingdom.
- Layoffs are hitting Microsoft. The company is cutting hundreds of jobs in its Azure cloud business, sources say. In a leaked memo viewed by BI, Microsoft exec Jason Zander blamed layoffs on the 'AI wave' and said they'll be doubling down on quantum computing.
- Apple's big event is almost here. Apple's highly anticipated Worldwide Developers Conference kicks off next week, and it's gearing up to deliver some big announcements. Here's what we're expecting, from more on its AI strategy to iOS 18 and Siri updates.
3 things in business
- In a Texas bankruptcy court, conflicts of interest ran deep. New details have emerged about the tight-knit circle of attorneys and judges that fueled the rise — and spectacular fall — of one of the most influential bankruptcy courts.
- Are we seeing a BuzzFeed-ification of the Washington Post? The struggling newsroom is launching a new news site focused on social media, for a broad audience. Creating another newsroom, while still operating the original one, is going to be hard to pull off.
- 'Promised land' jobs are falling apart. Big Tech, finance, and consulting jobs are becoming harder to come by, upending the job search for young people. One survey found 21% of companies at large expect to decrease hiring this academic year, up from 6% in 2023 — and that's just the tip of the iceberg.
In other news
- India's election is turning out far closer than expected, with Modi unlikely to win by a landslide.
- With AI writing so much code, should you still study computer science? This new data point provides an answer.
- Washington and Utah are the states with the best economies in 2024, while many in the South are struggling.
- Spotify CEO does damage control after his 'reductive' comments about creators spark backlash.
What's happening today
- Today's earnings: Hewlett Packard Enterprise and other companies are reporting.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. George Glover, reporter, in London. Annie Smith, associate producer, in London.