Warner Bros. Discovery finds itself at the center of the latest upheaval in media mergers and acquisitions, with employees preparing for the possibility of a new corporate authority taking charge soon.
The prime contender for acquisition is David Ellison, the son of one of the wealthiest individuals globally and a notable figure in Hollywood’s ambitions for expansion. Having recently overseen the merger of Skydance with Paramount, Ellison is now keenly pursuing a larger venture involving Warner Bros. Discovery.
Recently, WBD CEO David Zaslav and the board officially announced their evaluation of potential acquisition offers from “multiple parties.” While the company did not explicitly name Paramount or other interested entities, Ellison has been actively courting WBD and Zaslav with increasingly attractive proposals, partially financed by his father, Larry Ellison (with a net worth exceeding $330 billion).
According to a reliable source, Ellison submitted three letters to the WBD board, presenting bids of $19, $22, and $23.50 per share, with the latest offer made on October 13. This final proposal would value WBD at over $58 billion, while the company currently has nearly $36 billion in net debt. As of October 23, Warner Bros. Discovery shares were priced at $21.25, reflecting a 69% increase since the revelation of Ellison’s interest last month.
In a bid to appeal to Zaslav, Ellison even offered him a chance to become co-CEO and co-chairman of a merged entity of Paramount and WBD in his latest correspondence. However, all offers have been turned down by WBD’s board, with company representatives opting not to provide further comments.
Clearly, the Ellisons, along with their investors, have a limit; they are not prepared to pursue Warner Bros. Discovery at any cost. Their latest $23.50 per share bid is not intended to be the final word. With WBD’s board initiating an M&A evaluation and opening its financial records, the Paramount team may return with a revised or increased bid. However, it is understood that Ellison feels he currently holds a strategic advantage among potential buyers and might not raise his offer significantly.
Zaslav is naturally inclined to leverage competing offers to maximize WBD’s sale price, whether as a whole or in parts. “It’s no surprise that the significant value of our portfolio is receiving increased recognition from others in the market,” he noted in a company statement on Tuesday.
Tech giants like Netflix, Amazon, and Apple are reportedly in the running as potential buyers, although likely only for WBD’s studio and streaming segments. This aligns with Warner Bros. Discovery’s existing strategy to separate into two entities by mid-2026: Warner Bros. which will include HBO Max and the studios, and Discovery Global, which will primarily consist of the television networks. Yet, one high-ranking industry executive informs Variety that for these tech-focused companies, WBD in its entirety — including television networks — “is simply not integral” to their growth strategies.
Netflix co-CEO Ted Sarandos told investors during the Q3 earnings call that the company has “no interest in owning legacy media networks,” dampening prospects for a comprehensive deal for WBD. Sarandos, while stating that Netflix could be “selective” in its M&A pursuits, emphasized, “There’s nothing we must acquire to achieve our business objectives.”
In its announcement, WBD indicated it would consider selling the separated Warner Bros. part to an external buyer, while also considering a potential spinoff of Discovery Global to shareholders. Furthermore, speculation surrounding Sony targeting WBD has surfaced, yet sources inform Variety that there is no genuine interest from the company.
Comcast is showing interest in Warner Bros., but the company is also divesting most of its cable television assets to a spin-off entity called Versant, which could complicate any acquisition discussions regarding WBD. Analysts suggest that the previous negative sentiments from Trump towards CEO Brian Roberts position the Ellisons — who have friendly relations with the former president — at an advantage in getting a deal approved. Trump, displeased with MSNBC’s portrayal of him, once referred to Roberts as the “chairman of ‘Concast’” and labeled him as a “lowlife.”
“Given the previous commentary against Comcast from both the White House and the FCC over the past year, a successful Comcast takeover of nearly anything now seems highly improbable,” stated Craig Moffett, a principal analyst at MoffettNathanson, in an October 21 memo to clients.
What drives Ellison’s desire to unite Paramount and Warner Bros. Discovery? Identifying the same trends impacting the media industry for years, Scott Purdy, media strategy leader at KPMG U.S., observes a decline within linear television entities, noting, “In times of industry contraction, consolidation is common.” He adds that acquirers are often motivated to secure valuable entertainment franchises and intellectual property to prevent them from falling into competitors’ hands.
A merger between Paramount and WBD would likely result in significant layoffs, facilitating the consolidation of various corporate functions across divisions, studios, television, and streaming sectors. Meanwhile, Ellison and his team are anticipated to initiate extensive layoffs at Paramount Skydance next week, potentially impacting approximately 2,000 jobs in the United States, in addition to cuts globally.
Ellison, during remarks at Bloomberg’s Screentime conference in Los Angeles earlier this month, did not confirm any bids for WBD from Paramount Skydance, but he emphasized the necessity for Paramount to expand its content production capabilities to thrive in a streaming-driven landscape. He referenced Zaslav’s prior statements on the industry needing further consolidation.
“I believe there are numerous [M&A] opportunities that might be actionable in the near term,” Ellison expressed. “More content is indeed needed to boost engagement levels.”
With Warner Bros. Discovery now embarking on an official M&A assessment, the pivotal question is whether Ellison will enhance his bid and whether the WBD board believes that is the optimal course of action moving forward.
