You could make a case that no streaming service company has been speculated about and analyzed more over the last several years than Warner Bros Discovery. The company has famously gone through mergers, name changes and an endless stream of rumors about its own future, and yet, the long-term picture still isn’t clear. Lately, it’s seemed like CEO David Zaslav was going to sell the company to the recently merged Paramount Skydance, but it turns out that’s not the only option on the table.
Let’s back up real quick. Paramount Skydance and its owners The Ellison Family have been flirting with buying Warner Bros Discovery for awhile now. They recently offered $20 a share to buy the business, but according to Bloomberg, Zaslav and company officially decided to pass over the weekend. The initial speculation on Wall Street was that Paramount would come back with a higher offer and/ or put their petition directly to the shareholders, but The Hollywood Reporter is claiming there is another option very much in play.
There’s reportedly some momentum within Warner Bros Discovery to split the company in two. HBO and the Warner Bros studio itself would reportedly stay with Zaslav, and a second company that features all the cable channels would reportedly be created and run separately. This would allow each of the two new businesses to focus on more organized and direct goals, and it would also allow potential buyers for either business to focus more specifically on the part they want.
That’s right. In theory, even if the company splits, there’s a chance Paramount could still buy the HBO and Warner Bros Studio part of it, but the hope is they would have more competition if they tried to do so. There’s apparently a viewpoint within Warner Bros Discovery that if it was just those two parts, a lot more streaming services and tech companies would come into play as potential bidders like Netflix and Apple. They haven’t said that publicly, of course, but it’s reasonable to think they might at least want a bit more information. If one of them got interested, that could create a bidding war with Paramount.
HBO and the Warner Bros Studio collectively boast some of the most valuable IP assets in all of Hollywood within their portfolios. Together, they own the media rights to properties like Harry Potter, DC Superheroes and Game Of Thrones, among thousands of others. Every major player in Hollywood would no doubt love to acquire them, but as with everything else in business, it ultimately comes down to price and whether there’s the potential for a return on the investment.
The uncertainty comes at a time when consumers are growing frustrated with their entertainment options. The major streaming services have steadily raised prices over the past few years, and subscriptions to just the major ones can now collectively cost more than cable. Throw in frustration over a perceived lack of quality for many direct to streaming movies, and there’s a growing sense that consumers want change. Whether or not that would be improved through increased consolidation between the major studios is unclear.
Expect to hear a lot more about the future of Warner Bros Discovery in the coming weeks and months, whether the long-rumored merger with Paramount Skydance happens or not.