- Paramount, Comcast, and Netflix will submit first-round bids for Warner Bros. Discovery by Thursday, Nov. 20.
- Political and financial influences, including President Donald Trump and Saudi funds, have complicated the acquisition process.
- David Zaslav has given himself a financial escape hatch.
Paramount (PSKY), Comcast (CMCSA), and Netflix (NFLX) will all fete David Zaslav and Warner Brothers Discovery (WBD) with their first official offers on Nov. 20.
The underemphasized aspect, however, is the outsized amount of outside interest. Recent actions from both President Trump, as reported by AOL, and House Republicans led by Congressman Darrell Issa (R-Calif.) have turned what was just a knife fight into a game of machete twister.
What that actually means: This potential deal (which will set the precedent for anti-trust enforcement going forward) just became even more complicated, and at the most critical juncture yet.
Warner Bros. Discovery revealed early this week that first-round, non-binding offers are due this Thursday, Nov. 20, per reporting by Deadline.
That means it’s time for each suitor to ante up and make the case for why their offer — and their plan for Warner Bros’s assets — is the most valuable.
These plans must be both nuanced and comprehensive, given that Warner Bros. Discovery (WBD) is a media behemoth, comprised of prestige streamer HBO, the famous Warner Bros. movie studios, cable assets such as CNN and TNT, and Discovery’s various cable businesses.
And each offer from each other behemoth will come paired with no shortage of political baggage.
Ahead of this hullabaloo, WBD CEO David Zaslav snuck in a quick tweak to make sure he won no matter what.
“The Warner Discovery CEO found time to take care of [his pay] last week,” Puck’s Matthew Belloni informed us. “[He amended] his enormous compensation package to ensure he’s duly rewarded for additional dispositions of the Warner and Discovery assets that he smashed together to leverage the 100-year legacy of the former and prolong for a few years the collapse of the latter.”
A tale as old as time — the rich get richer and the deals get brokered. Here’s the state of each suitor’s pitch.
Warner Bros. Discovery has set a deadline of Nov. 20 for bidders.
Paramount’s pitch backed by Larry Ellison, President Trump
David Ellison, CEO of Paramount Skydance Corporation, has two pretty powerful backers in his pursuit of Warner Bros. Discovery: his dad and President Trump.
His father is Larry Ellison, founder of Oracle (ORCL) and former richest man in the world, according to The Guardian, although Forbes indicates that Larry’s one-time $400 billion net worth has dropped significantly during the recent tech selloff.
Ellison recently reiterated to The New York Post that he is fully in his son’s corner and will provide a “full backstop” to see this deal through.Larry’s considerable funds, added to David’s significant war chest, will definitely be necessary, considering a) the high starting asking price for WBD, b) WBD and Zaslav’s negotiating power given the number of suitors, and c) Zaz’s expensive “reverse spinoff” escape valve, which Puck reports has further jacked the price up.
Related: Disney makes bold statement on Warner Bros. purchase
President Trump’s support, on the other hand, is more of a “the other guy can’t win, so I’m with you” variety. However, the president is a close pal of Larry’s and did say David would “do a great job” with Paramount after Trump helped the deal go through, according to Variety.
With all this in play, David Ellison and his Paramount retinue made their way to the Warner lot on Nov. 18 to make their “reverse management presentation.”
That’s three funny words for “why you should let us buy and take over your company,” or, as Puck puts it more politely, “why their plan is better than others.”
The key to this fourth offer, following three behind closed doors, includes a wholesale purchase of Warner Bros. Discovery (others just want Warner Bros. studios and HBO, not Discovery or cable assets). It also includes a spot for David Zaslav in the newly formed combined conglomerate, and a vision for maintaining separate film studios, according to The New York Times.
As with any of these offers, detractors are flagging regulators to stand in the way of the deal, as the combined film studios would dominate an already perilous box office landscape. Take a look at WBD’s film assets alone:
Warner Bros. Discovery’s most valuable TV/film franchises:
- Wizarding World(Harry Potter & related): $34.5 billion
- Batman: $29.6 billion
- Looney Tunes: $15.9 billion
- DC Extended Universe(DCEU): $7.63 billion
- Superman: $6.9 billion Source: Diverse Tech Geek
Ellison, as reported by The Times, argued to the contrary of these detractors in a recent letter to the Warner Bros. board, making the case that the merger is necessary to compete with tech and telecom giants edging into the industry (looking at you, Amazon, Comcast).
Comcast Warner Bros. bid could have surprise backer
To compete with Ellison & (his) Son’s money, you’ll need some deep pockets.
How does one of the world’s biggest telecom and media conglomerates, backed by the Saudi Public Investment Fund, sound?
Whether Middle Eastern money will begin to be a consideration in forthcoming deals is the question on the mind of every would-be-somebody in Hollywood right now. That’s what Comcast might bring to the table.
Methinks there’s plenty of smoke to the notion. Deadline Hollywood reported on the visit and pledge of $1 trillion from controversial Saudi Arabia Crown Prince Mohamad Bin Salman, while the New York Post detailed Comcast CEO Brian Roberts’ coincidentally recent (wink wink) visit to Saudi Arabia.
Comcast reportedly is only interested in Warner Bros. studio (films) and streaming (HBO) assets, and would separate WBD’s traditional cable network assets (Discovery’s networks, TNT, CNN, more) to avoid regulatory scrutiny.
Warner Bros. and HBO’s existing IP and legendary content library, combined with Comcast/NBCU’s (below), would certainly create a formidable content industry contender.
Comcast/NBCUniversal’s most valuable TV/film franchises:
- “Despicable Me”/Minions: $11.3 billion
- “Jurassic Park”: $8.82 billion
- “Fast & Furious” franchise: $7.91 billion
- “Shrek”: $6.3 billion
- “Madagascar”: $2.59 billion Source: Diverse Tech Geek
Comcast aren’t the only suitor interested in Saudi mediawashing money (this visit being Bin Salman’s first since the murder of Washington Post journalist Jamal Khashoggi in 2018).
Deadline confirmed that Paramount CEO David Ellison will be a guest at a Nov. 19 White House formal dinner with the Saudi delegation. That’s veeery interesting, considering that Paramount recently told Bloomberg it isn’t considering bringing in Arab wealth.
Also worth considering: President Trump famously dislikes Comcast CEO Brian Roberts, calling him a “disgrace to the integrity of broadcasting.” Comcast and Roberts are seeking to mend this by donating to the president’s construction of a new White House ballroom, per The Times.
They’ll have to hope that money talks, as this negotiation teeters on a razor’s edge and political ire could tip it any direction. Speaking of which…
Netflix Warner Bros. pursuit damaged by House Republicans
Netflix has the money, the streaming and prestige TV pedigree, and the ambition to put forward an enticing pitch to Warner Bros. Discovery. Together, they’d be set up to dominate the prestige TV and film world.
Trump-allied House Republicans see this and, for whatever reason (kidding, speculation below), have decided to get involved. As Variety reported, in a Nov. 13 letter to Trump officials, Representative Issa wrote:
Interesting, but that’s only a single voice, right?
It was, until the story came back to life when Senator Robert Marshall (R-Kansas) followed suit Nov. 17 (suspicious timing) with his own letter conveying concerns about a possible Netflix-Warner Bros. deal:
“Such a transaction would constitute a major vertical and horizontal consolidation in a sector that is already marked by limited competition. If Netflix reached a deal to acquire Warner Bros., it would raise significant antitrust questions that warrant especially rigorous review,” Senator Marshall wrote in his letter.
So now concerns seem to have evolved into vague threats. What could prompt this micro-movement?
My theory, one echoed by other press, is that they’re kowtowing for President Trump’s favor by going after Netflix so the Paramount deal that the president wants will go through.
“By focusing on one company and not the antitrust problems of, say, Paramount owning two of the five remaining legacy studios, the Republicans may just be parroting the Ellison talking points and pushing Trump’s plan to deliver Warner Bros. to the president’s buddy Larry and his ‘great’ son, David. There are no heroes here,” Matt Belloni wrote on Puck.
However, as these first bids shake out, the growing conservative fear of a Netflix or Comcast victory is of particular note. President Trump and affiliates are plainly invested in a Paramount acquisition.
Further, the timing coinciding with public-facing White House-Saudi Arabian relations has escalated the stakes of this (already grand) drama.
Poor Zaz must feel like the most wanted guy in town. That will persist until someone else owns his company and the future of Warner Bros. shifts drastically once again.