📺 Hot media goss

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Happy holidays, Nightcap family! A quick programming note: We are off next week, returning January 3rd. We hope you enjoy the break as much as we will. And now, for the final time this year, let's get into it.

By Allison Morrow

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Last updated December 21 at 6:59 PM ET

📺 MEDIA GOSS

AaronP/Bauer-Griffin/GC Images/Getty Images

So the biggest bit of media goss is the potential for a merger between Warner Bros. Discovery and Paramount, two content behemoths that together would form a news and entertainment colossus.

The prospect of such a move is intriguing because of the legacy brands under each of those company's umbrellas. With Warner Bros. Discovery you've got HBO, TBS, the Discovery Channel, CNN (👋) HGTV, the Food Network, and many others. Under Paramount you've got CBS, Comedy Central, MTV, Nickelodeon and BET.

To be clear, neither company is confirming whether a deal is in the works.

What we know is that head of WBD, David Zaslav, had lunch on Tuesday with Paramount Global CEO Bob Bakish, and they broached a potential merger, two people familiar with the matter told CNN.

That spark of news, though, was enough to get the media cognoscenti chattering about the implications.

For consumers, there are some clear upsides, my colleague Elisabeth Buchwald writes.

A combined streaming subscription would mean you could flip from "Succession" to live NFL games to countless movies, all in one place. And it'd likely be more affordable than what you'd currently pay for the two services individually, said Jack Kranefuss, a senior director at Fitch Ratings who specializes in rating US-based media companies.

But there are some serious hurdles, too. Not least: Both companies are saddled with mountains of debt.

WBD has been cutting costs and impressing Wall Street with its ability to unload its debt burden after Warner Media merged with Discovery in 2022. But the company still held a stunning $45 billion in debt at the end of the third quarter, down from $49 billion at the start of 2023.
Paramount has nearly $16 billion in debt, and that's barely budged all year.
For WBD to share some of Paramount's debt burden, both parties would likely look to sell some of their assets and lower their overall expenses.

On top of the debt problem, there would be regulatory hurdles under the Biden administration, which has resisted consolidation.

Investors don't appear enthusiastic about a deal. Since news of the conversation broke Wednesday afternoon, WBD shares have dropped more than 5%. Paramount's stock was mostly flat.

BIG PICTURE

The rush to consolidate across media comes as the once-formidable studios recalibrate their revenue strategies to compete with Netflix in the streaming era, my colleague Oliver Darcy writes.

Traditional TV ratings are in the gutter as more people move to streaming, and no one expects that momentum to reverse. But most companies in the streaming game, apart from Netflix, are burning through cash to load up on content for their platforms.

The chatter about a WBD-Paramount merger "speaks to the panic" in media, analyst Rich Greenfield, co-founder of LightShed Partners, said Wednesday. "The industry is in for a very challenging future. They're going to try to get bigger to compete in streaming."

NUMBER OF THE DAY

$46,729.86

Your True Love's lavish 12-day (bizarrely bird-heavy) parade of gifts was more expensive than ever this year.

The cost all those lords-a-leaping and swans-a-swimming in the "Twelve Days of Christmas" rang in at an all-time high of $46,729.86 this year, according to PNC Financial Services' 2023 Christmas Price Index.

The index is, of course, a lighthearted take on the Bureau of Labor Statistics' Consumer Price Index. The 2023 price tag is up 2.7% from a year ago, representing a far more palatable increase than the eye-popping 10.5% jump between 2021 and 2022.

Driving the increase: So. Many Birds.

The partridge in the pear tree went up 14%, an increase driven entirely by the pear tree (a proxy for housing costs).
The half-dozen geese-a-laying went up 8.3%, the result of higher feed and fuel costs.
That pair of dainty turtle doves saw the biggest jump, at 25%, an increase that reflects their rarity and limited supply.

💸 CRYPTO'S BEST YEAR

Crypto's 14th year in existence was one marred by scandal, bankruptcy, fraud and regulatory squabbling. It still may have been the industry's best year ever.

The cast of Crypto 2023 starred figures that are now practically synonymous with fraud: Sam Bankman-Fried, Changpeng Zhao, Alex Mashinsky, AND Heather "Razzlekhan" Morgan and Ilya Lichtenstein (aka "Bitcoin Bonnie and Clyde").

Despite all the bad press, the young industry notched some notable wins.

Bitcoin, the crypto's bellwether asset, is up 160% for the year.
Two high-profile court cases came down in the industry's favor.
And a long-awaited approval for a mainstream investment product is expected in January, potentially flooding the scene with new investors.
Like the rest of the financial world, digital assets got a boost from an improving macroeconomic picture in cooling inflation, a growing economy, and a long-awaited end in sight for the Fed's interest rate hikes.

"It was the year of crypto's resiliency," Kyla Curley, a crypto expert and partner at global advisory StoneTurn, told me.

One big component of that resiliency is how US authorities, particularly the Department of Justice, flexed their enforcement muscles on crypto, even in the absence of clear regulations.

"Fraud is fraud," Curley says, "Regardless of the technology or the industry … you cannot stop human nature. When it comes down to it, people will find a way to exploit the rules."

Onward and upward?

No figure loomed quite as large over crypto in 2023 than Bankman-Fried, the entrepreneur once hailed as a visionary who was found guilty in November of orchestrating a yearslong, multibillion-dollar fraud through his FTX trading platform.

The trial of SBF, as he's widely known, was the spectacle of the year for crypto's biggest critics and its most strident fans.

For those inclined to cast crypto as an elaborate scam, the trial pulled back the curtain on the fly-by-night fraud underpinning FTX, which attracted millions of mainstream investors with its pitch as a beginner-friendly way to get into the emerging digital asset space. The rapid rise and fall of SBF is now Exhibit A for crypto detractors.

On the flip side, the crypto faithful who made SBF a into a billionaire pseudo-savior also cheered his conviction, casting the verdict as a an overdue purge of a bad apple.

A couple of weeks after the verdict, US authorities notched another enforcement slam dunk. Changpeng Zhao, aka CZ, the founder of the most popular crypto trading platform, Binance, pleaded guilty to money-laundering charges as part of a $4 billion settlement.

"2023 was a bad year for grifters and a good year for builders," says Faryar Shirzad, the chief policy officer for Coinbase. "We're going into 2024 with many of the worst of the grifters out of the market, and that's a good thing."

In the two weeks following CZ's guilty plea, bitcoin surged 23% to reach $44,000 — its highest level in 18 months, as investors looked ahead to more positive news on the horizon.

Bitcoin bulls dig in

The main event for crypto in 2024 could come as soon next month, when US regulators are expected to greenlight applications for the very first spot bitcoin ETF, or exchange traded fund, in the American market.

Put simply, a spot bitcoin ETF allows investors to track the price of bitcoin without actually owning the digital currency.

The upshot: There could be a lot of new money flowing into bitcoin very soon.

Adding to that bullish sentiment: the bitcoin halving, or, more menacingly, "the halvening."

While it's often a buy-the-hype-sell-the-news kind of event, the halving does tend to push bitcoin higher. Essentially, bitcoin is a finite asset, and every four years the algorithm reduces the number of new tokens that can enter circulation by half (hence the name).

"The 'halving' is the ultimate geek event for Bitcoiners in 2024," Antoni Trenchev, co-founder of crypto lender Nexo, said in a statement. "So if history repeats itself … we may not see the peak in Bitcoin until sometime in 2025, with 2024 acting as an entrée to the main event."

Trenchev said the "twin-turbo boost" of the spot ETF approval and the halving, expected in the spring, should propel bitcoin to $100,000 — a 45% jump over its all-time high of 69,000, reached in November 2021.

"The road to $100,000 will be lined with unexpected potholes and double-digit declines as Bitcoin," said Trenchev. "To borrow a phrase from one its biggest detractors Warren Buffett, 'transfers money from the impatient to the patient.'"

For an even more bullish prediction, look to Anthony Scaramucci, the founder of SkyBridge Capital and a longtime bitcoin evangelist.

"Bitcoin ends the year at $140,000," he told the digital news outlet Semafor.

WHAT ELSE IS GOING ON?

🔁 Hyperloop One, the company that promised to zip passengers and freight between at airplane-like speeds, is shutting down, according to people familiar with the situation. (Bloomberg)

💸 Rudy Giuliani filed for bankruptcy in federal court in New York just days after a jury ordered him to pay nearly $150 million to two former Georgia election workers for defamation. (CNN)

🛋 Wayfair's CEO is catching plenty of blowback over his less-than-sensitive end-of-year message that employees should work more hours and not "shy away" from "blending your work with your life." (CNN)

📈 The US economy expanded at an annualized rate of 4.9% from July through September — still the strongest rate in nearly two years, but slightly lower than the earlier official estimate of 5.2%. (CNN)

🏡 US mortgage rates continued to fall this week, with the average 30-year fixed rate hitting 6.67% — its lowest level since June. (CNN)