Overview of Better Off Fed
This episode of Puck’s The Powers That Be (presented under the supplied title “Better Off Fed”) features host Peter Hamby speaking with Bill Cohan about two main stories: Jerome Powell’s likely final days as Fed chairman and the ongoing takeover drama over Warner Bros. Discovery (WBD) — primarily the competing bids from Netflix and Paramount/Skydance (backed by the Ellison family). The conversation covers Fed independence, likely Fed chair contenders, and the key financial and strategic sticking points in the WBD sale.
Key topics covered
- Jerome Powell’s final press conference as Fed chair (Jan 30): his emphasis on central bank independence and reluctance to comment on the president.
- Donald Trump’s dissatisfaction with Powell and desire for lower rates; the limits of presidential influence over the Fed.
- Potential Fed chair candidates reportedly in consideration: Kevin Warsh, Christopher Waller, Rick Rieder, and Kevin Hassett — and how independence vs. political loyalty figures into the choice.
- The Warner Bros. Discovery takeover fight: Netflix’s signed agreement for WBD’s streaming & studios vs. Paramount/Skydance’s hostile all-cash $30-per-share bid for the entire company (including the linear TV/global networks “stub”).
- The valuation dispute over WBD’s global networks/cable stub (sports rights, CNN, international channels) and how that determines which bid is better for shareholders.
- Market signals and prediction markets (Kalshi) indicating current odds favor Netflix.
Main takeaways
- Powell: his clear public plea was for the Fed to remain independent — “I just hope they remain independent.” Powell, originally a Trump appointee, was reappointed by Biden and has earned credibility on both markets and critics.
- Presidential limits: Even if Trump appoints a loyalist, the Fed’s structure (multiple board members, institutional norms, market expectations) and the time remaining in his term make wholesale politicization difficult. Market and institutional pressure favor an independent Fed.
- Candidates caveat: It remains possible a nominee starts out politically aligned and then asserts independence once in office — but this is uncertain and rare.
- WBD sale is binary and timing-sensitive: Netflix currently appears favored because of its signed deal and conversion to an all-cash bid for the streaming/studios unit; Paramount’s all-in $30 offer hasn’t been increased since Dec. 4 and has gotten limited shareholder tender interest so far.
- The crux for WBD shareholders: determine the fair market value of the separated global networks (the “stub”). If the stub’s market value exceeds Paramount’s implied premium (~$2.25 per share), Netflix’s break-up deal could be superior for shareholders; if not, Paramount’s all-cash takeover may win.
- Financing and regulatory risk: Paramount’s bid is highly leveraged and could face bank financing or regulatory obstacles; Netflix has a stronger balance sheet and might face regulatory scrutiny (especially abroad), which Paramount hopes could block or delay Netflix.
Notable quotes / lines
- Jerome Powell (as repeated in the episode): “I just hope they remain independent.”
- Bill Cohan on Trump and the Fed: “The Fed must be independent... the Donald can, you know, blither and blather all he wants. But I don't think he's going to get the Fed in his pocket.”
- On WBD auction dynamics: “It’s completely binary at this point. It’s all in the power of Larry Ellison to help his son if he wants to, or if he doesn't want to, he won't.”
People & entities to watch (mentioned)
- Jerome Powell — outgoing Fed chair (emphasized independence).
- Possible Fed nominees discussed: Kevin Warsh, Christopher Waller, Rick Rieder, Kevin Hassett.
- Donald Trump — his preference for lower rates and picks who will do his bidding; limited leverage expected.
- Scott Bessent — referenced in the conversation as involved in Trump’s search process (note: reporting around personnel roles can change; verify with current news sources).
- Warner Bros. Discovery (WBD) — target company.
- Netflix — bidder with a signed merger agreement for streaming & studios.
- Paramount / Skydance (Ellison family) — hostile all-cash bidder for the full company.
- Ted Sarandos (Netflix) — noted as operationally involved in integration plans.
- Market indicator: Kalshi (prediction market) showing majority odds for Netflix.
Practical implications & what to monitor next
- Fed appointment: track Trump’s official nomination and early statements by the nominee to gauge likely independence; monitor Senate confirmation dynamics and how markets react to rate policy signaling.
- Fed policy and markets: if a Trump pick signals politicized rate decisions, markets may push back quickly. Powell’s remaining Fed board term (two years) and other governors will limit abrupt changes.
- WBD takeover: watch for (a) any new Paramount bid increase (a meaningful raise could flip shareholder sentiment), (b) shareholder tender percentages approaching the 50% threshold, (c) changes to financing commitments for Paramount, and (d) regulatory reviews in the U.S. and EU.
- Stub valuation: when and how the global networks spin or valuation is estimated — market trading once spun (anticipated in Q3 per the discussion) will clarify who made the better call.
- Prediction markets and proxy statements: they can move quickly; a sudden “pick six” bid from Paramount would change current Netflix-favored odds.
Short verdict (from the episode’s perspective)
- On the Fed: Bill Cohan is skeptical that Trump can fully capture the Fed, and stresses the institutional inertia and market forces that preserve Fed independence — though political risk remains.
- On WBD: Netflix looks favored as of Jan 30 due to its signed deal and Paramount’s lack of follow-up price increases; the dispute hinges on the value of the linear/global networks stub and whether Paramount will decisively raise its offer or regulators intervene.
If you want to follow these stories, prioritize real-time news on the presidential Fed nomination, official filings/proxies from Warner Bros. Discovery, any updated bids from Paramount, and regulatory comments from antitrust bodies in the U.S. and EU.