Media giant Warner Bros Discovery might be sold off
What's the story
Warner Bros Discovery, the media conglomerate that owns HBO and CNN, is considering a sale after receiving unsolicited offers from several parties, including Paramount Skydance and Netflix. The company's CEO David Zaslav said the board will explore its options in light of these bids. This comes as part of their effort to find the "best path ... to unlock the full value of our assets."
Market response
Shares surge by around 11%
Following the announcement of a potential sale, Warner Bros Discovery's shares surged by around 11%. The move has sparked speculation of a possible bidding war for the company. Notably, Paramount Skydance, owned by David Ellison (son of Oracle CEO Larry Ellison), is among those interested in acquiring Warner Bros Discovery.
Financial challenges
Media industry consolidation
The media industry has been witnessing rapid consolidation due to the rise of streaming services and a decline in traditional pay-TV audiences and advertising. Warner Bros Discovery, which was formed by a merger three years ago between AT&T's Warner Media and Discovery, has been struggling with debt. Earlier this year, Zaslav hinted at a possible breakup of the business to separate its streaming operations from traditional cable networks.
Strategic review
No timeline set for review
Despite the financial challenges, Warner Bros Discovery's Board Chairman Samuel Dipiazza said they still believe in their plan to split the assets. However, he added that they will now consider other options as well, including selling all or parts of the business. The company has not set a timeline for its review and the unsolicited offers have concerned both the entire company and the Warner Bros part itself.
Market value
Warner Bros Discovery's assets
Warner Bros Discovery, which owns several subsidiaries including CNN, HBO, DC Studios, and the Harry Potter franchise, has a rich library of franchises. This makes it attractive for companies looking to expand their online streaming catalogs. However, the appeal of its cable networks is less obvious. The firm recently rejected a bid from Paramount Skydance, though the specific amount was not confirmed.