Bidding for Warner Bros. Discovery commenced around noon on Thursday. Participants in the negotiations, as reported by On the Money, seem to expect that offers will be significantly below the $30 per share target set by CEO David Zaslav.
The contest for WBD, which includes major assets in the news and entertainment sectors, seems to be heating up between Paramount Skydance—led by independent film producer David Ellison, whose father is billionaire Larry Ellison—and two heavyweights: Comcast under Brian Roberts and Netflix with executives Ted Sarandos, Greg Peters, and founder Reed Hastings.
Other companies, notably Amazon, have shown interest as well. But sources indicate that their enthusiasm might not match that of the front-runners, with the bidding process likely extending into the end of the year.
Since the WarnerMedia-Discovery merger in 2022, WBD has been under Zaslav’s leadership. The firm holds significant studios and ranks as the third-largest streaming service, alongside CNN and HBO. Zaslav reportedly intends to make two or maybe three bids to boost the price beyond the $23.50 that Paramount Skydance has already offered.
Sources suggest that Paramount Skydance might increase its bid to around $25 per share. Nonetheless, company representatives appear to have been advised against engaging in an excessive bidding war, particularly if the final price could exceed $27 per share.
Comcast and Netflix face complex regulatory challenges from the Trump administration and possible scrutiny from the Justice Department’s antitrust division. Additionally, Comcast has financial constraints to consider, which could complicate its capacity to meet Zaslav’s expectations.
Interestingly, both Comcast and Netflix have considered partial purchases of WBD, primarily the studio and streaming arms. This type of move could lead to tax complications for WBD if successful.
Determining a competitive bid relative to Paramount’s is tricky, given its influence over WBD’s pricing.
While Roberts from Comcast seeks a partner to bolster his bid due to high debt levels, Netflix is exploring potential equity arrangements for WBD’s streaming and studio sectors.
A representative involved in the bidding process mentioned that Paramount Skydance is proposing a cash-heavy bid, around 80 percent, offering regulatory assurance. This could be enticing for the WBD board as they consider the options presented.
WBD representatives have declined to comment, as have those connected to Comcast, Netflix, and Paramount Skydance.
Another layer to this situation is the political environment. Netflix and Comcast are viewed as part of the Silicon Valley elite, which presents challenges, particularly since Comcast owns the MSNBC network, unfavorable to Trump. In contrast, the Ellisons have aimed for a more balanced news representation at CBS.
A source close to the situation expressed doubt that Trump would support a deal that strengthens Roberts and Hastings.
Zaslav is aiming for a valuation of WBD that translates to at least $30 per share, potentially amounting to around $70 billion. The Trump administration seems to favor Paramount Skydance for the acquisition, partly because of connections to the Ellisons.
Antitrust reviews would likely be expedited for the Ellisons compared to Comcast, which could face a protracted two-year process should it confront regulatory objections.
Netflix may also encounter similar levels of scrutiny as it potentially merges with WBD.
The WBD board will have to consider the lengthy court battles tied to Comcast and Netflix against the faster approval timeline of Paramount Skydance’s offer. It’s possible that, in the end, Zaslav and his team could opt to withdraw from all bids and stick with initial plans to dismantle WBD in the coming spring.
Before the bidding started in September, Zaslav had contemplated splitting WBD into distinct segments: a studio, a streaming entity, and a group managing cable assets. There may still be opportunities to offload parts of WBD gradually next year.
