Good morning. Andrew here. Hope you enjoyed the long weekend. Today, Lauren Hirsch dives into Warner Bros. Discovery restarting merger talks with Paramount and explains what would make it walk away from a deal with Netflix. We also examine Goldman Sachs’s reported decision to drop a diversity requirement for its board. And we look at more fallout from the Epstein files. (Was this newsletter forwarded to you? Sign up here.)
Paramount notches a winParamount has sought for weeks to force Warner Bros. Discovery back to the M.&A. negotiating table. Today, it has finally received a chance to win the battle over the movie and television studio. Warner Bros. Discovery just said that it would restart merger talks with Paramount, giving its suitor roughly a week to make its case to abandon its deal with Netflix. Warner Bros. Discovery isn’t definitely switching sides. Its deal agreement with Netflix gives it the right to talk with a rival bidder if that is likely to lead to a “reasonably superior offer.” Warner Bros. Discovery doesn’t think that’s the case here — but Netflix has given it until Feb. 23 to talk with Paramount to clarify several questions about that company’s competing offer. For now, Warner Bros. Discovery’s board is still recommending that shareholders vote in favor of the Netflix offer. Netflix added in a separate statement: “This does not change the fact that we have the only signed, board-recommended agreement with W.B.D., and ours is the only certain path to delivering value to W.B.D.’s stockholders.” But Paramount has made headway in casting doubt on that. The rival studio has argued that its bid — a deal for all of Warner Bros. Discovery, instead of the more complicated structure of the Netflix transaction, which involves spinning out the Warner cable networks — offers more certainty for shareholders. It doesn’t hurt that a Paramount representative has said the company would raise its takeover price to $31 a share if the Warner Bros. Discovery board authorized talks, and suggested that the company could pay even more. (Paramount has already tossed in sweeteners such as offering to cover the Netflix deal’s $2.8 billion breakup fee and to pay Warner Bros. Discovery a quarterly “ticking fee” if its deal closes behind schedule.) And several Warner Bros. Discovery shareholders, including the hedge funds Ancora and Pentwater Capital Management, have pushed the studio operator to reopen talks with Paramount. (Warner Bros. Discovery has now set March 20 as the date for an investor vote on the Netflix offer.) Big questions remain:
The Fed weighs moves to bolster bank lending. The central bank is preparing to ease capital requirements for U.S. banks, a vice chair, Michelle Bowman, announced yesterday. Banks have seen their share of mortgage originations in the U.S. fall to 35 percent in 2023 from 60 percent in 2008, Bowman said. Treasury Secretary Scott Bessent has blamed capital regulations for driving lending to nonbank financial services companies. California and Britain strike a clean energy deal. Gov. Gavin Newsom signed an agreement yesterday that calls for the two sides to bolster efforts to collaborate on green tech and invest in clean energy. It comes as the Trump administration has dismantled some legal protections for climate and Biden administration initiatives to advance a low-carbon transition. President Trump called the deal “inappropriate.” The Fed, earnings and inflation data top investors’ agenda this week. Minutes from the central bank’s January meeting are set for release tomorrow, offering clues about policymakers’ thinking on interest rates. Walmart, Wayfair and Klarna report quarterly results on Thursday, providing more insight on the state of the consumer. The Personal Consumption Expenditures report, the Fed’s preferred measure of inflation, is scheduled for publication on Friday. More Epstein files falloutThe Jeffrey Epstein files continue to jolt corporate America, including Hollywood. The heat is also growing in Washington and academia. The latest: Thomas Pritzker, a scion of the Hyatt Hotels empire, stepped down yesterday as executive chairman of the hotels giant, after the files revealed that he was in regular contact with the convicted sex offender in the years after Epstein’s 2008 plea deal on sex crimes charges. Pritzker and Epstein corresponded frequently as they arranged appointments, including visits to Epstein’s Manhattan townhouse. In a 2018 email exchange, Pritzker agreed to help Karyna Shuliak, Epstein’s girlfriend, arrange a trip to Southeast Asia. After Shuliak told Pritzker she was going there “to try to find a new girlfriend for Jeffrey,” Pritzker responded with a smiley-face emoticon and wrote, “May the Force be with you.” Pritzker said in a statement released yesterday that he had “exercised terrible judgment in maintaining contact with” Epstein and Ghislaine Maxwell, Epstein’s longtime companion. “There is no excuse for failing to distance myself sooner,” he added. Pritzker, a cousin of JB Pritzker, a Democrat and the governor of Illinois, also said he would not seek re-election to Hyatt’s board in May. And then there’s Casey Wasserman. The sports and entertainment mogul, whose decades-old flirtatious messages with Maxwell appeared in the files, is facing increased pressure to step down as chairman of LA28, the organizing committee for the Olympics in Los Angeles. Karen Bass, the mayor of Los Angeles, yesterday became the highest-ranking elected official to call on Wasserman to resign from LA28. “I do think that we need to look at the leadership,” she said after criticizing the Olympic organizers’ decision last week to back Wasserman. Wasserman announced on Friday that he had begun the process of selling the Wasserman Group, his powerhouse talent agency that has experienced some high-profile defections since the latest Epstein revelations. “I’m deeply sorry that my past personal mistakes have caused you so much discomfort,” he wrote to employees.
Anthropic’s latest fight with WashingtonAnthropic’s stated focus on safety has set it apart in the artificial intelligence race — and drawn the ire of some White House officials. A new report suggests that the Trump administration is weighing a move that could deal the A.I. start-up a big blow, underscoring a major disagreement between the two sides on how to deploy the technology. The Pentagon is threatening to cut ties with Anthropic, and more, Axios reports. More specifically, the Defense Department is considering designating Anthropic a “supply chain risk,” meaning that other military contractors would have to stop working with the company, too. It’s a designation typically reserved for overseas adversaries, Axios adds. The threat arises from a dispute over how the U.S. military can use Anthropic’s Claude software, the only A.I. model currently allowed in the Pentagon’s classified systems, according to Axios:
Forcing other companies to stop using Anthropic would be complicated, given how deeply embedded Claude is among corporate users. The Trump administration has complained about Anthropic’s approach before. David Sacks, the White House’s A.I. czar, has said that Anthropic was promoting a “state regulatory frenzy that is damaging the startup ecosystem.” Anthropic recently doubled down on that pro-regulation approach by donating to a new super PAC that opposes a more libertarian approach to A.I. regulation. But Dario Amodei, the start-up’s co-founder and C.E.O., recently told the podcaster Dwarkesh Patel that the company faced “incredible” pressure to “survive economically while also keeping our values.”
Goldman’s latest retreat on diversityGoldman Sachs is reportedly continuing to scale back its diversity policies. The latest potential move: dropping factors including race, gender identity and sexual orientation from criteria it looks at in choosing potential board members, according to The Wall Street Journal. It’s a reflection of Corporate America backing away from diversity, equity and inclusion initiatives — better known as D.E.I. — amid greater pushback during the second Trump administration. The news: Goldman currently uses four factors to find director candidates, including one broadly aimed at diversity that encompasses military service, political views and “other demographics” like race or gender identity. The Journal reports “other demographics” will be erased from that list. The move followed a shareholder initiative to remove the criteria submitted by the National Legal and Policy Center, a conservative nonprofit that has challenged several boards on their D.E.I. policies, for inclusion on this year’s proxy ballot. Goldman’s board said it would remove the “other demographics language”; the N.L.P.C. agreed to drop its request. Goldman has already backed off other diversity-minded policies. Last year, it dropped one that stated it would take companies public only if they had two diverse board members. A spokesman said at the time that the move was because of “legal developments related to board diversity requirements.” Later in 2025, the bank dropped some references to “Black” on the website for its “One Million Black Women” program, with an executive telling The Journal that the initiative — despite the name — wasn’t just for Black women. It’s a more hostile environment for D.E.I. policies now. The Trump administration has issued executive orders threatening private sector companies and other institutions with civil investigations over their diversity initiatives, which have long drawn the ire of conservatives. Since then, a number of companies, including Meta and other big banks, have retreated from such policies. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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