Warner Bros. Discovery Considers Sale, Piques Interest of Paramount Skydance

Warner Bros. Discovery plans to split the company in two, and various companies, including Paramount Skydance, have taken interest in buying one or more of the two future corporations.

In June, Warner Bros. Discovery (WBD) made a huge move by announcing that the company would split, dividing the company's assets into two independent corporations. Currently, Warner Bros. Discovery has hundreds of subsidiaries in the TV and news market, including HBO Max, Discovery+, CNN, Cartoon Network, HGTV, and Food Network.

The plan, outlined in their announcement, will see the company divided into Warner Bros. and Discovery Global. Warner Bros. will encompass all of their live entertainment and cable channels, ranging from sports to news. Meanwhile, Discovery Global will retain their entire production capability and include other streaming services like HBO and HBO Max. This would allow both companies to be more highly valued and increase their individual financial stability and flexibility.

However, that split may not go through, as other corporations have already taken interest in acquiring WBD's assets. Last week, Paramount Skydance handed them a generous offer of $24 a share (around $60 billion in total) for the entire company– around $5-6 more than the company was worth at that time. The WBD board, though, rejected the offer, saying their valuation of the conglomerate was too low.

According to several reports, Comcast and Netflix have also taken interest in the streaming and studios portion of the company, as both corporations would be eager to take control of WBD's popular production lineup. This idea is also in greater alignment with WBD's idea of what will happen with the corporation.

Now, WBD has several options with what to do with the company, but it will take time before they can confirm a final decision. A split is now unlikely due to the incredible interest in WBD's assets, meaning that they are likely to sell at least a portion of the corporation to a buyer. The most likely scenario is that a large streaming service or other media conglomerate purchases Warner Bros., while Discovery Global would be spun off to shareholders. Other possibilities include the sale of the entire company, like the proposal from Paramount Skydance, or individual sales for Warner Bros. and Discovery Global after the split.

Of the potential buyers that have been disclosed, Paramount Skydance is the most likely to acquire the corporation. Netflix is unlikely to make a move for Warner Bros., considering its smaller status as a streaming service. Meanwhile, if Comcast were to buy Warner Bros., it would merge with their NBCUniversal division, creating antitrust issues with the federal government. Paramount Skydance, on the other hand, is a newly merged company with an ambitious CEO, David Ellison. Ellison is also the son of Larry Ellison, founder of cloud infrastructure giant Oracle, giving him the financial capability to raise his offer for WBD if he desires.

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