Wednesday should be fun for those of us who can’t get enough of the Fox–Time Warner story. Both companies will release their Q2 earnings — and then hold their first public conversations with Wall Street analysts since word got out about Fox’s $80B offer for Time Warner, which the owner of Warner Bros, HBO and TBS rejected.
If history serves, then Time Warner CEO Jeff Bewkes will run his company’s call in the morning while Fox COO Chase Carey subs for CEO Rupert Murdoch in the afternoon. The conventional wisdom is that if they say anything about consolidation, they’ll probably limit themselves to comments about broad trends in the marketplace. There’s no reason to discuss deal specifics because, for now at least, there isn’t one on the table. They’ll probably get away with that. Analysts who want to stay ahead of the pack covet the one-on-one or small group meetings with CEOs where they can glean insights from a raised eyebrow or other form of body language.
Still, we can dream. Here are a few questions we wish somebody would ask.
For Time Warner
— Your stock is up 18% since the Fox offer became public, and you say its bid was too low. Why couldn’t you persuade investors earlier that Time Warner is worth as much as it is now?
— Investors value Netflix at about $25B, which seems to be a lot more than they value HBO at Time Warner. (The entire company, including Warner Bros and Turner, trades for about $75.5B.) Why not put a spotlight on HBO by selling a minority stake to the public?
— Are you opposed to selling Time Warner to anyone, or is there a particular reason to oppose Rupert Murdoch and Fox?
— There’s a lot of speculation that Time Warner might buy a company in order to thwart Fox. In retrospect, should you have been more aggressive about building Time Warner when prices were lower?
— Would HBO GO need to have Fox’s movies if you decide to compete head-to-head with Netflix?
— You say that you could save $1B in a merger from costs cuts and synergies. But just about everybody believes real savings could be twice as big. Did you low ball that number because people would be outraged if they knew how much you really intend to make from job reductions and cable channel price increases?
— One of Time Warner’s complaints is that you offered non-voting shares. If you’re so confident that your strategy is best for shareholders, why not offer voting stock — and also eliminate the super-voting shares that enable the Murdoch family to control 40% of the votes?
— You bought several properties including TV Guide, My Space, and Dow Jones at, or close to, the top of the market. With the stocks trading close to an all-time high, what makes you so sure you wouldn’t be buying Time Warner at the top now?
— One of the big attractions for Fox is the TV sports rights Time Warner controls including for the NCAA, MLB, and NBA. Why not just bid higher for those rights next time they come up?
— Hollywood is built on relationships. How can you be so sure that you’ll keep valuable talent as you try to consolidate two of the biggest movie and TV studios and so many networks?