The Battle for Warner Bros. Goes to the Second Round
It’s time for round 2 of
the battle for ownership of Warner Bros Discovery, as it will remain for a few
months yet. WBD has asked its potential bidders for a second (sweetened) round
of offers this week. Our expert entertainment lawyer
from Blake & Wang P.A., Brandon Blake, sums up the status of the
deal-making so far.
Non-Binding Bids, But
Little Revealed
Let’s recap what we know
to date. The first round of non-binding bids ended in the last weeks of
November. Paramount-Skydance, as it now is, wants the whole company. Netflix
and Comcast, to no one’s real surprise, are looking for their sweetest assets:
the historic film and TV studios, and their flagship, well-regarded streaming
platform, HBO Max. Discovery would, presumably, still have to be spun off, as
Warner Bros. initially planned.
While we would be facing
likely a year of regulatory scrutiny around the deal, WBD itself has indicated
it expects any sales process to be concluded before the end of the year. The
first-round bidders have now (after a sharp non-disclosure agreement) been
examining Warner Bros. books.
Entering the Second
Round
After some serious
pressure from Paramount, which is clearly keen on taking ownership, Warner Bros
put aside its planned internal split to open the bidding process. Oddly,
Comcast itself is in the middle of spinning off its NBCUniversal cable networks
into Versant, although they do have past bids for Fox and even Disney under
their belt. Netflix, however, was a surprise, given that they have preferred to
grow organically and on their own to date.
WBD hasn’t entirely
decided on a deal, however, and is keeping the option to split if they can’t
find the right sale. However, it’s looking increasingly like a sale, either
full or partial, is on the cards for them.
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