Todayβs briefing:
β The world watches Warner Bros
β The French make an admission
β One brave ambassador
Good morning {{first_name | Intriguer}}. True story time, thanks to an anonymous Intriguer: this one takes us to a small and remote capital in a part of the world first βdiscoveredβ by a nepo-baby 16th century explorer.
Not a lot going on there these days, meaning ambassadors have to manufacture random events to generate a headline or two and show HQ just how much impact theyβre having.
So one such ambassador duly commissioned a statue of that nepo-baby explorer, and invited the rest of the tiny diplomatic corps to a dull unveiling ceremony. As you might imagine, most other ambassadors then suddenly had pre-existing plans that day, so sent junior-burger minions to watch the statue get unveiled on their behalf.
And that, dear Intriguer, is how our anonymous friend ended up grinning there in the sun for a photo opp that somehow ended up emblazoned across the next front page, misaligned under an entirely un-related headline declaring, βDrunk sergeant arrestedβ.
Anyway, letβs update you on the geopolitics of this big Netflix/Warner/Paramount fight.
PS - For Intriguers in Sydney, join our happy hour from 5pm this Thursday the 11th in Surry Hills. Register here!
Number of the day
30%
Thatβs copperβs price rise so far this year, ~ double the S&P500βs return. One recent driver has been US stockpiling in anticipation that President Trump could impose copper tariffs next year, triggering a physical shortage elsewhere.
Merger Mondays Wednesdays
Just days after Netflix announced its $83B offer for Hollywoodβs legendary Warner Bros studio, rival Paramount has now entered the fray with its own hostile $108B bid.Β
And we havenβt seen a better love triangle since Edward and Jacob battled it out for Bellaβs heart in the Twilight saga.Β
But the world is now watching the free worldβs most powerful entertainment giants vie for supremacy, and not just because of the billions at stake or the historic egos at play.
So letβs take a quick look at five reasons why this merger is global:
Global screens
Netflix is now available in over 190 countries, which is a fancy way of saying itβs now virtually everywhere except China, Russia, North Korea, and (for now) Syria.
The other players in this deal are smaller, but Warnerβs HBO Max is still in a cool 100 or so countries, while Paramount Plus reaches a respectable ~40.
So while capitals still impose limits (Vietnam bans Full Metal Jacket, for example), thatβs still raw US soft power getting beamed into billions of foreign households every night.
Weβre also talking aboutβ¦
Global wallets
The cap tables of these screen giants mean weβre talking about raw US dollars getting pumped into foreign wallets: the single largest foreign investor in Netflix is Norway, while Paramountβs third-largest investor is a fund run by Italyβs powerful Agnelli family.
And of course, that sweet sweet cash now flows both ways: an estimated two thirds or more of all paying Netflix subscribers are now outside the US.
So when youβre reaching global screens and wallets, youβll draw the attention ofβ¦ Β
Global regulatooooorsΒ
The bigger your footprint, the longer the list of regulators whoβll want a say in any merger, even if itβs between US companies.
Take the EU, which has an unlimited stash of red tape rolls it can dust off if a proposed deal risks eroding competition and screwing Europeβs consumers.
Word is Europe seems unlikely to flat-out veto here, given a) this deal could be more vertical than horizontal, b) the EU picks its US battles carefully, but also c) precedent suggests Europeβs regulators might instead attach conditions to protect (say) local cinemas, streamers, and/or creatives.
Then thereβs theβ¦
Global absences
According to Paramount documents, China-based tech giant Tencent (of WeChat fame) had originally committed $1B towards the takeover bid, alongside pledges from the Saudi, Emirati, and Qatari sovereign wealth funds.Β Β
And just a decade ago that kind of easy cash wouldβve made Hollywood execs quiver with delight between Arnold Palmers up at Yamashiro. But times have changed.
Some of the execs were smart enough to realise that this kind of structure (particularly the China angle) would trigger π¨ gaspβ¦ βCFIUS reviewβ.Β
Thatβs the secretive Committee on Foreign Investment in the United States, which has broad powers to block foreign investment on national security grounds. These days, your best CFIUS strategy is to avoid CFIUS altogether, which is why a revised deal then ditched Tencent and muzzled the others (ie, leaving the Saudis et al with no operational say).Β
But maybe even a CFIUS review couldβve been a little more predictable compared toβ¦
Global personalities
Notwithstanding the worldβs vast teams of lawyers, economists, and bureaucrats exploring complex philosophical questions to determine the optimal outcome in each antitrust case, big competition decisions are always inherently political.
Yet the notable thing in this case is how much the decider-in-chief (President Trump) is saying the quiet bit out loud, confirming heβll indeed be personally involved.
So beyond the technical risk this merger could breach the classic 30% US market share threshold, capitals will also be watching for further clues into how Trump wields US power, with early hints Paramount now hopes to pull an Nvidia* (ie, go direct to the president).
Anyway, letβs close where we opened, shall we? If this is all like a Twilight love triangle, then maybe we already know where Donald Trump stands: firmly on Team Edward.
Intrigueβs Take
There was a funny joke about how the obvious solution here is to just let both Netflix and Paramount get one Warner brother each.
Anyway, this merger fascinates us because of the tensions it highlights:
First, thereβs the tension between Trump viewing big decisions through a dealmakerβs lens, versus the risk this then leaves core national interests (whether AI chip controls or long-standing alliances) up for horse-trading.
Second, thereβs the long-running tension between a US antitrust system wanting to manage corporate dominance at home, versus a US foreign policy system mindful of the benefits of bigger firms exerting dominance abroad.
And third, thereβs the tension of a deal that, even if it clears any regulatory hurdles in the US, still has to clear a growing track of hurdles abroad as capitals cringe at some of the cultural sovereignty and digital dependency implications, or simply see it as another way to extract some sweet sweet US concessions.
So while itβs fun to focus on the love triangle between Netflix, Warner, and Paramount, or the Twilight one between Edward, Jacob, and Bella, thereβs really a much bigger triangle playing out here between markets, politics, and raw geopolitical power.
Sound even smarter:
*Paramount boss David Ellison reportedly got his dad Larry (the Oracle billionaire) to call Trump directly in opposition to the rival Netflix bid. The Paramount proposal also lists Trumpβs son-in-law (Kushner) as a key financing partner.
Meanwhile, elsewhereβ¦
πΊπ¦Β UKRAINE β Ready your ballot.
Responding to President Trumpβs suggestion that President Zelensky is clinging to power, the Ukrainian leader has announced heβll hold elections within three months if the US and others guarantee security. (BBC)
Comment: Zelensky still polls slightly ahead of Zaluzhny, the star general / rival he sent away to London as ambassador. But Zelenskyβs aim here seems less about any election, which is constitutionally prohibited during martial law and practically impossible without either a ceasefire (something Putin rejects) or US security guarantees (something Trump rejects). Rather, Zelensky seems to be reminding everyone that the root issue here is not Ukraineβs democracy, but Putinβs invasion.
π¨π³Β CHINA β Not so fast.
Beijing authorities are reportedly now planning to limit Chinaβs access to Nvidiaβs advanced H200 chips, just after President Trumpβs shock decision to allow their export to China. (FT $)
Comment: If true, this could mean at least three things: first, whether the US sells these top chips or not, it suggests China wants to be the master of its own tech destiny; second, that potentially undermines one of DCβs pro-sale arguments about keeping China hooked on US tech to undermine its self-sufficiency push; but third, reports of rampant chip smuggling and other work-arounds suggest Chinaβs end-users still want and need US chips no matter what signals come out of Beijing or DC. Itβs a reminder US chips are still ahead. We just donβt know for how long.
π°πΏΒ KAZAKHSTAN β Mission accomplished.
An American astronaut and two Russian cosmonauts have landed in Kazakhstan after their eight-month mission aboard the International Space Station. (Times of Central Asia)
Comment:Β Space is one of the few areas of US-Russia cooperation thatβs survived Putinβs invasion β thatβs partly out of operational necessity, but also partly a historic, symbolic reminder of our shared humanity, and our ability to step back from the brink.
π«π· FRANCE β Yeah, about last weekend.
Perhaps feeling a little jeally at all the attention Nigeria got for helping thwart Beninβs recent coup attempt, Paris has now revealed it also played a role in the former French colony, offering both logistical and intelligence support. (Reuters)
π»π³ VIETNAM β Weβre out.
Japan has cited unfeasibly tight timeframes in its decision to withdraw from plans to build Vietnamβs Ninh Thuan 2 nuclear power plant, complicating Vietnamβs efforts to avoid the energy shortages thatβve hit its standing as a manufacturing alternative to China. (The Star)
Comment: Japanβs βtimeframeβ reasoning, while plausible, likely also obscures the reality of Vietnamβs tricky regulatory environment, Japanβs post-Fukushima rethink, and (relatedly) limited interest from Japanβs risk-averse firms. Of course, that potentially opens doors for others like Russia, already slated to build the other plant (though construction hasnβt started on that one yet either).
π΅πͺ PERU β Tanks a lot.
Seoul has signed a big deal to supply Peru with 54 K2 battle tanks and 141 wheeled armored vehicles, in South Koreaβs largest LatAm defence deal to date. (Chosun)
Comment: Beyond Peruβs desire for military modernisation and a bit of heft amid a rapidly changing world, this also looks like an attempt to diversify its traditional defence partnerships beyond its old Soviet kit and todayβs US-China race.
π§π« BURKINA FASO β He said, he said.
Burkina Faso has released 11 Nigerian military personnel, rejecting their claims of an emergency C-130 landing and instead alleging they unlawfully violated the West African nationβs airspace. (Guardian)
Comment: The sensitivity here is over the fact regional powerbroker Nigeria deployed forces to block last weekβs attempted coup in Benin. And thatβs clearly rattled the regionβs other juntas who all came out against Nigeriaβs emergency landing. So one takeaway is how we might now just be a miscalculation away from outright conflict.
Extra Intrigue
The Intrigue jobs board πΌ
Policy internship @ Australian Mission to the WTO in Geneva
Intel and crisis analyst @ IBM in Bangalore, India
Latin America research analyst @ Bloomberg in Sao Paulo
Advisor, armed forces @ Red Cross in Washington, D.C.
Film of the day
Credits: Austrian Cultural Forum
Washingtonians were in for a treat last night as the Austrian embassy screened a film thatβs been generating a bit of buzz on the festival circuit: The Last Ambassador.
It follows the true story of Manizha Bakhtari, the woman serving as Afghanistanβs ambassador to Vienna when the Taliban retook her homeland and started aggressively stripping back basic rights for women and girls.
Bakhtari herself was at the screening along with the filmβs Austrian director, Natalie Halla, sharing further insights into the ambassadorβs defiance of Taliban calls to resign, plus her quiet Daughters program helping Afghan schoolgirls pursue education.
Ultimately, the ambassador describes her stance like this: βI do not represent a government, but I represent my people.β
Todayβs poll
Who do you think will win this bid to buy Warner Bros?
Yesterdayβs poll: What do you think will happen with Yemen?
π¨π¨π¨β¬οΈβ¬οΈβ¬οΈ π€ A two-state solution (33%)
π©π©π©π©π©π© π« Continued conflict (61%)
β¬οΈβ¬οΈβ¬οΈβ¬οΈβ¬οΈβ¬οΈ π© Direct UAE-Saudi spat (6%)
β¬οΈβ¬οΈβ¬οΈβ¬οΈβ¬οΈβ¬οΈ βοΈ Other (write us!) (0%)
Your two cents:
π« R.C.F: βIt's in the interest of far too many parties, both within Yemen and outside of it, that this conflict is prolonged (and profitable), for it to ever really end. β
π€ Z.W: βUnlike Israelβ¦ in the case of Yemen the two state solution can possibly work.β
