Good morning,

Welcome back to The Backstory, your weekend review of the best new work at Puck.

It was another incredible week. Bill Cohan told Ted Sarandos to walk away from the WBD deal, and then he and Matt Belloni parsed the aftershocks of the Ellisons’ winning offer in surgical detail. Meanwhile, Dylan Byers revealed the Bari Weiss–induced panic inside CNN; Julia Alexander examined a streaming mega-trend; Kim Masters double-checked the president’s UFC crowd math; Eriq Gardner offered a talmudic reading of the antitrust trial of the year; John Ourand presaged a hockey Olympics hangover; Lauren Sherman documented the Gredes’ post-Kardashian ambitions; Rachel Strugatz foreshadowed some Sephora tremors; new guy Malique Morris analyzed Ssense’s resurrection plan; Sarah Shapiro identified a new front in the influencer wars; Ian Krietzberg scrutinized Dario Amodei’s war with the Pentagon; and Marion Maneker ran the numbers on Sotheby’s next major sale, while Dan Duray peeped the Obamas’ art stash.

In Washington, Julia Ioffe reported on Marco Rubio’s new Foggy Bottom loyalty oath; Leigh Ann Caldwell pondered the new Clinton precedent in Congress; Peter Hamby got his hands on some eye-opening Trump polling; and Abby Livingston exposed Fairshake’s cryptobucks strategy.

Check out these stories, and others, via the links below. And stick around for the backstory on how it all came together.

Lauren Sherman explores the Grede industrial complex and digs into the Sánchez-Bezos Met Gala chatter.
and…
Rachel Strugatz lays out Sephora’s TikTok problem.
meanwhile…
Malique Morris assesses Ssense’s second act, while Sarah Shapiro revels in the Instagram influencer circus.

Marion Maneker details the latest sign of a market turnaround.
and….
Dan Duray gets the backstory on the Obamas’ art holdings.

Matt Belloni and Bill Cohan cover every square inch—the leverage, layoffs, CNN impact, theatrical consequences, and more—of the Paramount–WBD deal.
and…
Julia Alexander spies trouble ahead for one of the streaming market’s bright spots.
meanwhile…
Kim Masters pours cold water on Trump’s plans to host 100,000 UFC fans on the White House lawn.

Ian Krietzberg wades into the Anthropic–OpenAI holy war.

Will Hodgkinson revisits Paul McCartney’s post-Beatles era.
and…
Carolina de Armas hits the slopes with a new breed of snow bunny.

Dylan Byers checks in on the psychological meltdown consuming CNN.

John Ourand chronicles the NHL’s post-Milano blues.
and…
Julia Alexander unravels ESPN’s baseball economics.

Bill Cohan unpacks David Ellison’s backbreaking debt load.

Leigh Ann Caldwell explains how the Clintons’ Epstein deposition could boomerang on Trump.
and…
Julia Ioffe uncovers the State Department’s new loyalty oath.
and…
Abby Livingston profiles the Vlasto political war machine.
and and and…
Peter Hamby spotlights some thorny Trump polling.

Reed Duchscher, C.E.O. of Night Media, discusses the post-MrBeast creator economy with Dylan and Julia on The Grill Room.
and…
Ourand gets Marchand back on The Varsity.
and…
Lauren and Bernstein analyst Luca Solca peruse the LVMH earnings on Fashion People.
and…
Al Sharpton joins John Heilemann to honor Jesse Jackson’s legacy on Impolitic.
and…
Sony Film C.E.O. Tom Rothman discusses the industry’s gyrations with Matt on The Town.
and…
Malique sits down with Peter to convey the Ssense drama on The Powers That Be.

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On Thursday evening, I took advantage of the unseasonably warm temperature in Manhattan, which these days means anything above 40 degrees, and headed out for the evening on foot. I was bound for a dinner party thrown by my great pal Tammy Haddad at Zimmi’s on Bedford Street, not far from my old stomping grounds in the Village and the site of Puck’s very first office at 64 Bank Street. Rather than hop on the 1 train from Rector Street, I dodged the slush by marching up Varick and then Seventh Avenue South, grateful to brave the cold after another eremitic week of bomb cyclone nonsense amid this endless winter.

Naturally, I checked my phone as I trudged on, keeping tabs on a couple of business items as they moved forward—some legal document review, a couple growth objectives, and the latest details on a fascinating new A.I. study of various company data sets. And then I noticed that my partner Matt Belloni had dropped a stunning note into Slack: Netflix had just walked away from its signed merger agreement with Warner Bros. Discovery following Paramount Skydance’s recent decision to enhance its offer to $31 per share, along with all kinds of deal sweeteners—a ticking fee, an enhanced breakup fee, and an enlarged commitment from Larry Ellison, the prospective combination’s new paterfamilias. On the tenth-ish try, the Ellisons at last appeared to have won their prize.

In many ways, as loyal readers know, this multilayered and seemingly endless telenovela has been Puck catnip for months. In fact, our fascination was initially piqued eons ago when Matt Belloni broke the news that the Ellisons were planning a run at Paramount. In the intervening months, the Ellisons outlasted its peers through a WBD journey that nearly single-handedly took the company’s stock from $7 per share to $31—an economic feat that will make C.E.O. David Zaslav more than half a billion bucks. Along the way, we also completed a deal that put both Zaz and RedBird on our own cap table.

As I turned the corner of Bedford and Commerce, a block where I used to play stoop ball as a kid, I quickly put together a conference call with Matt, Puck editorial director Matt Lynch, and our partner Bill Cohan, who has defined the coverage of this extraordinary leveraged buyout sweepstakes. During an exhilarating conversation, Matt and Bill worked through a plan for collaboration—speaking in the shorthand of loyal partners who knew each other’s bodies of work by heart. (In fact, Matt began the conversation by congratulating Bill on his excellent and prescient piece, published the prior day, entitled Ted, Don’t Do This...) They ticked through the most relevant and pressing details, from the $60 billion in debt that will sit on the newco’s balance sheet to the forthcoming layoff bloodbath amid a long and complex integration.

Hours later, Matt and Bill completed The Ellisons Catch the Warners Falling Knife, a brilliant and timely assessment of the numerous second-order impacts of the deal. The piece is filled with singular insights and bon mots that advance the scholarship on the deal, particularly on the financing side. “This is going to be one leveraged puppy,” Bill noted. “According to the just-released Paramount Skydance 10-K, the company has a little more than $10 billion of net debt already, and had around $3 billion of adjusted EBITDA in 2025 (a measure of profits), so leverage of around 3.3x. Not terrible. Not great. Now, with this $111 billion acquisition of all of WBD, Paramount will be adding something like another nearly $60 billion of debt to the equation, from three big Wall Street firms: Bank of America, Citigroup, and Apollo. So, let’s call it $70 billion of net debt, maybe more maybe less, on something like $12-or-so billion of adjusted EBITDA from the combined company.”

He continued, noting the challenges on the other side of the ledger: “Paramount is projecting $3.8 billion of adjusted EBITDA for 2026, and let’s say WBD will achieve the balance, earning around $8.7 billion of adjusted EBITDA this year. (Both are just estimates, of course). That’s nearly 6x leverage, and we’re talking about a huge amount of debt. In 2025, WBD hit that $8.7 billion in adjusted EBITDA exactly, a 3 percent decrease from the previous year, which doesn’t exactly sound like a growth business. The tougher news was that the just-completed fourth quarter was more of a struggle, with an adjusted EBITDA of $2.2 billion, a 20 percent year-over-year decline, with most of that decline coming from linear TV channels. That, of course, will be going into Paramount’s column when the deal closes.” In other words, this drama is hardly in its final act, ensuring that it will remain one of the great stories of our time far into the foreseeable future. And you can be sure you’ll read much more about it in Puck.

Have a great weekend,
Jon

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