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The “for sale” sign is now officially posted for TNT Sports parent company Warner Bros. Discovery.
After weeks of rising speculation and an inbound offer from David Ellison, CEO of CBS Sports parent Paramount Skydance, WBD said Tuesday morning that it has begun a “review of strategic alternatives to maximize shareholder value.” The company said the move was driven by “unsolicited interest” from “multiple parties,” without specifically naming Ellison or anyone else.
“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market,” WBD CEO David Zaslav said in a statement.
NBC Sports parent Comcast and Netflix are also reportedly interested in acquiring at least part of WBD. In each of those instances, as well as Paramount, the resulting combination would create a sports media colossus with extensions in nearly every North American pro sport. Netflix co-CEO Greg Peters, however, said at a Bloomberg conference last week that “we come from a deep heritage of being builders rather than buyers.”
WBD’s move arrived not long after it detailed a plan to split into two independent, publicly traded companies. The majority of the sports assets will reside in a forthcoming Discovery Global, to the point where a new streaming service for that programming is being developed.
Any purchase offer, as a result, will need to beat the upside of that separation.
“We continue to believe that our planned separation to create two distinct, leading media companies will create compelling value,” said WBD board chair Samuel A. Di Piazza Jr. “That said, we determined taking these actions to broaden our scope is in the best interest of shareholders.”
Market Dynamics
There is no timetable for the strategic review process. The WBD separation, however, is targeted for completion by mid-2026, meaning that some type of path could become clear by the spring.
WBD is currently trading at around $20 per share, with early Tuesday activity sending the stock up by nearly 10%. That price was the prior reported offer from Ellison, when the stock previously traded at about $18 per share, meaning that there was minimal premium before, and none now.
Initiating the formal process could elevate the offers significantly beyond that range, but it will bear watching if other inquiries are for all of WBD, as was Ellison’s bid, or for just parts of the company. An Ellison bid, however, could still be the most compelling, and not just because of the greater likelihood of regulatory approval compared to one from Comcast.
“Putting Paramount together with Warner Bros. Discovery sounds compelling,” LightShed Partners wrote in a research note. “Gut the cost structure of the combined company, cherry-pick the best film, TV, and streaming projects, dramatically increase the breadth and depth of library titles, while writing off a ton of weaker projects, and combine streaming platforms and leverage greater scale and sports rights to slow the decline of the combined company’s linear TV portfolio.”
