Did things just get more interesting in the Warner Bros. Discovery succession race… or less interesting?
On Tuesday, WBD announced in a lengthy statement that it was reviewing purchase offers from “multiple parties for both the entire company and Warner Bros.” We knew Warner Bros. was potentially for sale and that Paramount/Skydance was seriously prepping its own offer. There were even rumors that someone like Netflix was interested in making a bid, up until Netflix’s co-CEO recently shot those rumors down.
What WBD’s announcement this morning did was publicly put the “For Sale” sign up, it confirmed that Paramount isn’t the only company dipping their toes in the pool, and it showed that David Zaslav and company are at least open to the idea of selling just part of the company rather than the whole thing. It’s also a good way to goose the stock price by making Wall Street think there’s a lot of buzzards circling.
But not really a whole bunch has changed here because the most realistic buyer — until another seriously emerges — is and remains Paramount.
The reason Paramount is reportedly making an offer to buy all of Warner Bros. Discovery is because it prevents it from getting in a bidding war with other potentially deep-pocketed buyers. While someone like Apple could easily absorb WBD and its tens of billions of dollars in debt, it wouldn’t necessarily want to. The valuable assets for a streamer or a tech company would be the Warner Bros. film studio, HBO, and HBO Max, as well as the IP and library rights to DC and Harry Potter and a whole lot of other stuff. They would be less interested in Discovery and Turner’s cable channels that are for now profitable but are dwindling businesses.
Paramount, on the other hand, could still find a use for traditional cable networks like HGTV, TNT, Food Network, TCM, and more to add to its own portfolio. The same would go for the sports rights WBD controls, and it would give Paramount/Skydance a broadcast network in CBS and a major cable news network in CNN.
Consider if only Paramount was on the block for sale rather than the combination of the film studio and its cable channels. Way more buyers would’ve come calling than just David Ellison. When Fox sold its film studio to Disney, it retained its broadcast channel and cable networks, and it got a hefty price for doing so all the same.
Warner Bros. Discovery is at least continuing its spin into two separate companies (kinda like it was when they were individually Warner Bros. and Discovery), and that at least gives Zaslav and company more options when considering offers.
None of this is to say that Paramount is the preferable option should they be the ones to buy WBD. We still believe it would lead to another legacy studio disappearing, potentially a major streaming service being sunsetted, countless more jobs lost, and not to mention the entire political can of worms it would open.
But if not Paramount, who else?