Netflix ‘plotting Warner Bros takeover’

Warner Bros Discovery owns HBO, the TV network behind the hit series Succession - HBO

Netflix is said to be considering a bid for Warner Bros Discovery (WBD) after the Hollywood conglomerate said it was open to takeover offers.

The streaming giant is reportedly among suitors interested in WBD, which is behind Harry Potter and owner of channels including HBO and CNN. Comcast, Sky’s US owner, has also been named as a potential bidder by CNBC.

A takeover of Warner Bros would mark an audacious swoop by Netflix, giving the company access to a rich back catalogue of blockbusters ranging from The Lord of the Rings to Barbie, as well as TV hits including Friends and Succession.

Any deal would mark the latest incursion of Silicon Valley into Hollywood after Amazon bought MGM, the studio behind the James Bond franchise, in an $8.5bn (£6.3bn) deal in 2022.

WBD has already been fielding takeover interest from the billionaire Ellison family, who aim to combine it with Hollywood rival Paramount.

The Ellisons already control Paramount in a consortium alongside RedBird Capital Partners, the private equity firm that is also seeking ownership of The Telegraph.

However, WBD reportedly rejected an approach from the Ellisons’ Paramount Skydance for being too low.David Ellison, the chief executive of Paramount Skydance, has also put in a bid for Warner Bros Discovery - Rodin Eckenroth/FilmMagic

WBD on Tuesday said it was open to a sale after receiving “unsolicited interest” from multiple suitors, firing the starting gun on a potential bidding war.

The media giant is currently planning to split its streaming and studios division from its traditional TV networks, but will now expand its strategic review to consider a sale of either parts of the group or the whole business.

It is thought that Netflix and Comcast would be more interested in WBD’s film and TV studios business than its legacy TV networks. Both companies declined to comment.

David Zaslav, chief executive of WBD, said: “It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market.

“After receiving interest from multiple parties, we have initiated a comprehensive review of strategic alternatives to identify the best path forward to unlock the full value of our assets.”

Shares in the Hollywood giant jumped by more than 11pc in New York.

The comments signal a change in direction for WBD, which had previously been focused on completing its planned spin-off by mid-2026.

The prospect of a bidding war will mark a setback to Paramount Skydance, which is led by David Ellison. It was formed over the summer through the $8bn takeover of Paramount, the maker of blockbusters including Titanic and Forrest Gump and owner of British broadcaster Channel 5.

A tie-up between Paramount and WBD would represent a major reshaping of the US media landscape. Skydance hopes a deal would give the combined entity the scale required to take on the might of deep-pocketed rivals such as Netflix and Disney.

Story Continues

WBD was itself formed just three years ago in a $43bn merger. However, it has struggled to fend off fierce competition from streaming rivals and stem declining audiences in its traditional cable TV business.David Zazlav, Warner Bros Discovery’s chief executive, has received criticisms during his tenure over cancelling film projects (pictured with Steven Spielberg) - Aude Guerrucci/AFP via Getty Images

The company’s share price has languished as it also struggled under its huge debt pile, which stood at $35.6bn at the end of June. However, shares have recovered almost 60pc since news of Skydance’s interest first emerged.

The looming sale process will be a key test for Mr Zaslav, a veteran media executive who previously led Discovery before taking the top job at WBD following the merger.

Mr Zaslav has faced criticisms for decisions made under his tenure, including cancelling projects such as the DC film Batgirl and carrying out a botched rebrand of the HBO Max streaming service.

He also faced a shareholder backlash over his $52m pay package last year, which came amid job cuts at the company’s film studios.

Skydance’s interest in WBD comes against a backdrop of broader empire-building by the Ellisons. Larry Ellison, David’s billionaire father, is part of a consortium of buyers lined up to take control of TikTok’s US operations.

Shortly after the Paramount takeover, Skydance expanded its grip on US media by buying The Free Press, an online news website founded by outspoken journalist Bari Weiss, for a reported $150m.

Larry Ellison, who is a close friend of Sir Tony Blair and has donated hundreds of millions of dollars to the former prime minister’s non-profit institute, has also pledged to invest $5bn in data centres across the UK and has set up a major new research centre in Oxford.

Skydance’s bid for Paramount was backed by RedBird Capital, the US private equity firm trying to take control of the Telegraph.

RedBird earlier this month asked ministers to begin formal consideration of whether its takeover can go ahead.

View Comments