The Warner Bros Discovery logo is displayed at the Cannes Lions International Festival of Creativity in 2022. The company announced plans in June to split its Warner Bros and Discovery Global units.Eric Gaillard/Reuters
Warner Bros Discovery WBD-Q is considering an outright sale following interest from several potential buyers, the company said Tuesday, in what would be the latest shakeup across legacy media.
Shares of the company rose 10.5 per cent in morning trading.
Netflix NFLX-Q and Comcast CMCSA-Q are among the potential bidders, CNBC reported Tuesday, citing sources, following earlier reports that Paramount Skydance PSKY-Q CEO David Ellison was also in talks to acquire the combined company.
Warner Bros Discovery – home to CNN, HBO Max and the Harry Potter franchise – announced plans in June to split its Warner Bros and Discovery Global units by next year to separate its growing streaming business from its slower-growing legacy cable network unit.
A sale or a split would be one of the most consequential reshaping moments in the media industry, potentially prompting other legacy media houses to revisit their own structures. Streaming has fundamentally reshaped the media industry, leaving traditional broadcasters with mounting debt, higher content budgets and fragmented viewership.
“This latest development potentially opens up further discussions with interested parties. For Hollywood and other traditional media giants, all roads lead to consolidation,” PP Foresight analyst Paolo Pescatore said. The company already rejected an initial bid from Paramount, Bloomberg News reported earlier this month, because the offer of around US$20 per share was too low.
Reuters could not immediately verify the CNBC report.
The company is also considering an alternative separation structure that would enable a merger of Warner Bros and a spinoff of Discovery Global.
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Skydance’s advances soon after snapping up Paramount speak to the Ellison family’s voracious appetite to dominate the global media landscape amid a favourable regulatory regime in the United States.
Analysts believe David Ellison’s deep pockets – backed by his father, Oracle co-founder and the world’s second-richest person Larry Ellison – give him the firepower to take the risk.
The elder Ellison’s close ties with U.S. President Donald Trump may also smooth regulatory hurdles and avoid the scrutiny that would usually come with such a merger, analysts say.
The decline of legacy media, driven by linear TV cord-cutting, as well as the shift of audiences and advertisers to streaming platforms, has forced traditional media companies to rethink their business structures.