Things just got more interesting in 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 that Warner Bros. was potentially for sale and that Paramount/Skydance seriously prepared their own offering. There were even rumors that someone like Netflix was interested in making a bid, until Netflix’s co-CEO recently shot down those rumors.
What WBD’s announcement this morning did was publicly post “For Sale,” it confirmed that Paramount isn’t the only company dipping its toes in the pool, and it showed David Zaslav and companies are at least open to the idea of selling just part of the company rather than the whole thing. It’s also a great way to go after the stock price by making Wall Street think there are 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 into a bidding war with other potentially deep buyers. While someone like Apple could easily absorb WBD and its tens of billions of dollars in debt, it wouldn’t necessarily lack to. The valuable assets for a streamer or tech company would be Warner Bros. film studio, HBO and HBO Max, as well as IP and library rights to DC and Harry Potter and a whole lot more. They would be less interested in Discovery and Turner’s cable channels which are currently profitable but are declining business.
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 apply to WBD’s control of the sports rights, 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 selling block rather than the combination of the movie studio and its cable channels. There would have been more buyers than just David Ellison. When Fox sold its movie studio to Disney, it kept its broadcast channel and cable network, and it still got a hefty price tag for doing so.
Warner Bros. Discovery is at least continues its spin into two separate companies (as it was when they were separate Warner Bros. and Discovery), and it at least gives Zaslav and company more options when considering deals.
None of this is to say that Paramount is the best option should they be the ones to buy WBD. We still think it would lead to the demise of another legacy studio, potentially the demise of a major streaming service, countless more job losses, and not to mention the whole political can of worms it would open.
But if not Paramount, who else?
