With new bids, Warner Bros. Discovery looks to narrow the auction field

Warner Bros. Discovery’s winnowing of bidders is expected to accelerate this week.

Monday marks the deadline for a 2nd circular of proposals, which Warner’s committee members expect volition bring sweetened bids from the 3 rivals vying for the prize. Comcast, Paramount and Netflix each submitted archetypal non-binding offers past month, forming the auction’s floor.

Warner bankers privately person signaled to the funny parties that this circular whitethorn not beryllium the last flex, but they bash expect that Monday’s bids volition assistance them zero successful connected a preferred merger partner, according to radical adjacent to the process who were not authorized to comment.

Warner Bros. Discovery hopes to marque its prime earlier the wintertime holidays begin.

“The planetary media manufacture stands astatine the precipice of historical transformation,” Bank of America media expert Jessica Reif Ehrlich and 3 colleagues wrote successful a Monday probe report.

The merchantability of Warner Bros. represents Hollywood’s biggest consolidation since a buying spree that began 30 years agone with Walt Disney Co.’s acquisition of Capital Cities, which owned ABC and ESPN. That epoch was capped by Time Warner’s ill-fated merchantability successful the aboriginal 2000s to dial-up net work supplier AOL — a disastrous national that plundered the worth of Warner’s prestigious properties. It took much than a decennary for the institution to recover.

Since then, Netflix, Amazon and Apple person swarmed the field, ushering successful a streaming gyration that has dramatically altered user behavior, leaving the amusement industry’s fiscal instauration — bulky cablegram TV bundles and blockbuster theatrical releases — connected shaky legs.

Warner’s existent bidding warfare “reflects the economical world ... that mid-sized bequest media studios/companies tin nary longer vie with the portion economics of Netflix oregon the ecosystem of ample tech players specified arsenic Amazon,” the Bank of America analysts wrote.

They noted that some the Larry Ellison family’s Paramount and Comcast’s NBCUniversal whitethorn consciousness the request to bulk up, prompting some to claw for Warner’s assets, which see the Warner Bros. movie and tv studios successful Burbank, premium transmission HBO and streaming work HBO Max.

Representatives of Warner, Paramount, Comcast and Netflix declined to comment.

Paramount is seen arsenic astir apt to prevail, fixed the Ellison family’s immense wealthiness and governmental connections.

President Trump considers Larry Ellison among his friends, which could guarantee a creaseless regulatory reappraisal process with the Justice Department successful the United States. The president has indicated helium wants to spot Ellison power CBS — presently nether the Paramount-Skydance umbrella — and CNN, which is owned by Warner Bros. Discovery.

Paramount offers the astir businesslike take-over arsenic it has expressed involvement successful buying each of Warner, including its cablegram channels that see TBS, TNT, HGTV, Food Network and Animal Planet. Tech scion and Paramount Chairman David Ellison informally kicked disconnected the bidding successful September, making 3 offers by mid-October.

But Warner’s committee rejected each 3 proposals, considering them to beryllium excessively low. The institution past opened the process to different bidders, allowing Comcast and Netflix to articulation the field.

Ellison precocious visited oil-rich Middle Eastern countries, holding preliminary talks with sovereign-wealth funds astir perchance investing should Paramount triumph the Warner auction, according to 2 knowledgeable sources.

Warner Bros. Discovery shares traded astir $24 connected Monday.

Some analysts expect a surge from Comcast, which is controlled by Philadelphia cablegram mogul Brian Roberts.

Warner Bros. Discovery Chief Executive David Zaslav prefers Comcast implicit Paramount, knowledgeable radical say.

Through its ownership of the European broadcaster Sky, Comcast has widened its planetary footprint.

But Comcast carries important indebtedness and its banal has been stalled for years.

Comcast and Netflix person each expressed involvement successful buying lone the studios, HBO and the streaming service.

Neither Comcast nor Netflix are funny successful Warner’s linear cablegram channels. Comcast is readying to jettison its ain portfolio of cablegram networks, including USA Network, CNBC, MS NOW (formerly MSNBC) and Golf Channel, successful a spin-off that should finalize successful January. The cablegram channels volition signifier a caller entity called Versant.

“The marketplace is witnessing the endgame of the cablegram TV era,” the Bank of America analysts wrote. “The Warner Bros. workplace is the crown jewel, with [intellectual property] ranging from Harry Potter to DC Comics to Game of Thrones (and overmuch more).”

Buying Warner Bros. and HBO would boost NBCUniversal’s tv accumulation capabilities and its lagging Peacock streaming service, which has struggled to mint scripted streaming hits.

Comcast executives besides person an oculus connected Warner’s beloved franchises that see Superman and different DC Comics, “Lord of the Rings,” and “The Matrix,” which could supply much characters for its increasing Universal Studios taxable parks.

Netflix besides sees large worth successful the Warner Bros. franchises. In addition, Warner Bros. Television has agelong been among the industry’s astir palmy amusement producers, giving commencement to “The Big Bang Theory,” “Ted Lasso,” and “The Pitt.”

Scooping up Warner Bros. would besides springiness Netflix Co-Chief Executive Ted Sarandos a legendary movie workplace batch — thing Netflix presently lacks. The streamer’s L.A. offices beryllium connected a comparatively tiny tract overlooking the 101 Freeway.

Any of the combinations would punctual layoffs successful the media industry, which is already reeling from a TV and movie accumulation slowdown and the elimination of thousands of workers implicit the past 2 years.

Paramount has shed much than 2,600 workers successful caller months. The Ellison household and RedBird Capital Partners consolidated their acquisition of Paramount successful August.

Warner Bros. Discovery besides has purged unit arsenic it has struggled nether a colossal indebtedness load brought connected by its past merger — Discovery’s $43 cardinal takeover of WarnerMedia from AT&T successful 2022.

Warner inactive carries astir $34 cardinal of debt.