Warner Bros Mulls Sale; Netflix, Comcast Among Contenders In Talks To Buy
Netflix Inc and Comcast Corp. are among the companies interested in Warner Bros.’ movie and TV studios, according to people familiar with their thinking who asked not to be identified.
Warner Bros. Discovery Inc. said it has begun to consider various deal scenarios in light of “unsolicited interest” the media and entertainment conglomerate has received from “multiple parties” for all or part of the company.
The board will evaluate “a broad range of strategic options,” including continuing with a planned split up of the company by mid-2026, a transaction for the entire company or separate deals for its Warner Bros. and Discovery Global units, Warner Bros. said in a statement Tuesday.
Netflix Inc and Comcast Corp., are among the companies interested in Warner Bros.’ movie and TV studios, according to people familiar with their thinking who asked not to be identified discussing private information. Paramount Skydance Corp. has already made at least one offer for the whole company and was rejected.
“After receiving interest from multiple parties, we have initiated a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets,” Chief Executive Officer David Zaslav said in the statement.
Warner Bros. shares jumped 9% in New York on Tuesday morning.
Earlier this year, Warner Bros. announced plans to split into two businesses, one focused on cable TV and the other on streaming and studios. The move is an attempt to separate its faster-growing streaming division, which includes HBO Max, from the declining cable networks that house TNT and CNN.
Warner Bros. and HBO have already been sold twice in the last decade as legacy media companies have struggled to contend with the rise of online competition. Zaslav merged Discovery and Warner Bros. to try and create a more robust competitor to Netflix, but the strategy hasn’t worked. A sale of all or part of the company would drastically reshape Hollywood and the media industry, potentially reducing the number of major studios and consolidating streaming services.
Paramount, the film and TV company led by David Ellison, is interested in Warner Bros., Bloomberg has reported, but its initial takeover approach was rebuffed for being too low. CNBC reported that Paramount had made multiple bids below $30 a share, all of which were rejected. Paramount has also discussed acquiring Warner Bros. with Apollo Global Management Inc., according to people familiar with the matter. The private equity company controls Legendary Entertainment, which owns a piece of several Warner Bros. franchises.
A spokesperson for Paramount declined to comment on any bids.
Ellison is seeking to swoop in before a potential split of Warner Bros., while Zaslav has made it clear he believes he can get a hefty premium for his streaming and studios businesses once they’re separated from the cable channels, Bloomberg News previously reported. Paramount is fresh off a deal of its own after combining with Skydance Media in August. The merger is already having an effect on the newly combined company as Paramount plans to eliminate thousands of jobs in an effort to cut $2 billion in costs.
Big tech companies such as Netflix and Apple Inc. have often been mentioned by analysts as potentially interested buyers. Netflix co-CEO Ted Sarandos has expressed interest in Warner Bros.’ studio, its large content library and its film production lot, according to a person familiar with the discussions. Netflix isn’t interested in owning TV networks, however.
Comcast the parent of NBCUniversal, is also taking a look but hasn’t made a formal offer, according to people familiar with the matter, who asked not to be named discussing private talks. One of the largest cable-TV and broadband providers, Comcast has also been restructuring its film and TV businesses and has previously announced plans to divest networks including MSNBC, USA and CNBC. A spokesperson for Comcast declined to comment on a bid for Warner Bros.
Warner Bros. still believes that the planned separation of its cable networks from its studios “will create compelling value,” Samuel Di Piazza, chairman of the board, said in the statement. “That said, we determined taking these actions to broaden our scope is in the best interest of shareholders.”
Warner Bros. said there is no deadline or definitive timetable set for completion of the strategic review process.
Warner Bros. “was created through M&A and hopes to exit via M&A,” Ross Benes, an analyst at Emarketer, said in a note. “The last few mergers associated with Warner have eroded shareholder value and resulted in layoffs. But the company’s TV networks, studio, and streaming service would still hold value to the right buyer.”
Allen & Co, JPMorgan Chase & Co. and Evercore are serving as financial advisers to Warner Bros.
