Netflix Weighs Bid for Warner Bros. Discovery, Brings in Investment Bank
Netflix is reportedly looking into a potential acquisition of Warner Bros. Discovery’s studio and streaming operations.
According to sources familiar with the matter, the company has hired investment bank Moelis & Co to advise on a possible bid and has been given access to Warner Bros. Discovery’s financial data to evaluate the opportunity.
Acquiring Warner Bros.’ studio business would give Netflix control over some of Hollywood’s biggest franchises, including Harry Potter and DC Comics. The studio also produces TV shows that stream on Netflix, such as You, Maid, and Running Point. HBO and its streaming service could bring additional high-profile content and subscribers to Netflix.
Netflix CEO Ted Sarandos spoke to investors last week, noting that while Netflix is usually “more builders than buyers,” the company does consider acquisitions that could strengthen its content offerings. He also clarified that Netflix has no interest in Warner Bros. Discovery’s cable networks like CNN, TNT, Food Network, or Animal Planet.
“We’ve been very clear in the past that we have no interest in owning legacy media networks. There is no change there,” Sarandos said.
Warner Bros. Discovery is currently evaluating its options after receiving multiple offers, including from Paramount and Skydance. The company is weighing whether to proceed with its planned split, separating its film and TV studios, HBO, and HBO Max from its television business, or to sell part or all of the company.
Reports indicate that Paramount CEO David Ellison is preparing a cash bid for Warner Bros. Discovery. According to Dylan Byers of Puck, Ellison’s offer has prompted other companies, including Netflix, to explore the possibility of a bid.
“Ellison’s seemingly limitless cash and ambition have accelerated Hollywood’s consolidation process, and his decision to bid for all of WBD now—in an attempt to preempt potential rivals—is forcing nearly everyone to dust off their models,” Byers wrote.
Despite Warner Bros.’ success with recent films like Barbie, Superman, Sinners, and Weapons, some analysts are cautious about the stock’s upside. Wells Fargo analyst Steven Cahall told Puck that he does not expect WBD’s stock to rise much above $19 per share and suggested major companies like Apple or Amazon are unlikely to acquire the entire company.
Netflix Co-CEO Greg Peters also commented on the situation at the Bloomberg Screentime conference. “We come from a deep heritage of being builders rather than buyers. I also think that one should have a reasonable amount of skepticism around big media mergers, they don’t have an amazing track record over the history of time,” he said. Peters added, “I would say it’s our responsibility to evaluate all our options.” He emphasized that Netflix’s main goal remains growth.
“Our job is to figure out what’s the best way to grow our business? And we have to think really carefully, how do we invest our capital, our time and our attention, and if that’s the best way to do it, great, and if it’s not, then we should do something else,” Peters said.
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