What are the risks and opportunities for NBCUniversal in the Peacock-YouTube Premium bundle launching in 2027? And why we believe the Paramount-WBD deal will likely collapse.
The Peacock Premium-YouTube Premium distribution deal (1:00)
YouTube and NBCU announced this week that the content available via Peacock Premium (with ads) will be made available within YouTube to all YouTube Premium subscribers starting in early 2027. The deal also includes other partnership opportunities, such as ad technology and live event production.
How does the deal work for Peacock and YouTube (7:00)
Although details of the money flow in the distribution deal have not been revealed (and likely never will be), we discuss what the revenue levers are and how they might be employed. The money flow between the companies will likely consist of ad revenue and a portion of shared YouTube Premium subscription revenue.
Paramount Global and WBD agree to delay deal for one year (14:20)
In a dramatic turnaround, Paramount Global agreed to delay its purchase of Warner Bros. Discovery for one year.
The value of the deal (16:30)
WBD’s declining revenue from traditional TV, on which it still relies heavily, and its huge debt load hang heavy over the $110 billion deal.
The deal economics increase costs by millions each day of delay (20:00)
Paramount Global must pay a “ticking fee” and other penalties as the delay unfolds. These will make the deal even more expensive than it is today. As well, the financial situation faced by banks and Middle East countries that are helping to finance the deal is changing.
The Ellisons’ financial situation has deteriorated dramatically (24:30)
Larry Ellison’s net worth has almost halved since the deal was struck, while his liability has, if anything, increased. This begs the question: is the deal really worth it to him?
So, will the deal make it to closure next year? John Newman, Herff Chair of Excellence, University of Memphis School of Law, had this to say:
“If the companies were smart, they would probably just walk away from this deal. But on Paramount’s side, I don’t see a lot of smart, rational behavior. So who knows—Paramount may stick it out until the bitter end.”
