The Warner Bros. bake-off has officially begun.
Paramount, Comcast and Netflix each submitted bids for some or all of Warner Bros. Discovery on Thursday, a source familiar with the matter confirms, officially kickstarting a process that is likely to see the company sold to yet another new buyer, either whole or in part.
Paramount, led by CEO David Ellison, is the only bidder (at the moment at least) that wants to acquire the entire WBD portfolio, which includes the well-regarded film and TV studios HBO and HBO Max, as well as cable channels like TNT, TBS, CNN, HGTV and Food Network.
WBD had been pursuing a split of the company, with studios and streaming to become one company, and the linear networks forming another company.
Comcast, which owns NBCUniversal (and is in the process of spinning out its cable channels into Versant), and Netflix are each interested in the studios and streaming businesses, and if WBD’s board went with them, would either need to spin the linear channels into their own company, or find another buyer for them.
One way or another, a deal for WBD will transform the entertainment industry, all-but-certainly consolidating the film, TV and streaming business at a moment where the industry is already being ravaged by disruption.
One unanswered question is whether Saudi Arabia or any other Middle Eastern fund is providing financing for backstops to any of the bids. Both Paramount and Comcast have been connected to potential Middle East partners as they have pursued the deal. It is also not immediately clear if any other entities submitted bids.
The bids, which were nonbinding, were due at noon Thursday, and the WBD board will now have to decide how to proceed, with future rounds of bidding likely. In the case of the Comcast and Netflix bids, the company will need to figure out how to value the remaining linear business, and the regulatory questions that are likely to arise, with the Trump administration raising the specter of a challenge.
