Warner Bros. Discovery Says It Is Considering a Sale

Media|Warner Bros. Discovery Says It Is Considering a Sale

Warner Bros. Discovery, the owner of HBO, CNN and the Warner Bros. movie studio, just hung a “for sale” sign on its business.

In a lengthy statement released Tuesday morning, Warner Bros. Discovery said that it was considering a variety of deals, including a sale of the entire company or a spinoff of some assets, in response to interest from possible buyers.

Warner Bros. Discovery’s announcement could set off a bidding war for one of Hollywood’s most iconic companies. A complete or partial sale of the media colossus would reshape Hollywood, shrinking the number of major studios and epitomizing Hollywood’s relentless march toward consolidation.

“While we aren’t going to get into the specifics of who has expressed interest, it is safe to assume it is multiple parties,” the statement said.

Since Paramount’s interest in Warner Bros. Discovery leaked several weeks ago, other potential suitors have come out of the woodwork. Comcast has also expressed interest in acquiring all or part of the company, according to three people familiar with the matter who spoke on condition of anonymity. Comcast, which is currently completing spinoff of its cable networks, would likely have a high bar for getting deeper into the traditional media business.

In June, Warner Bros. said it would split its streaming and studios business from its cable networks business. The move aims to unshackle promising parts of the company, like the HBO Max streaming service, from the profitable but decaying cable networks like TNT and CNN.

Paramount has expressed interest in acquiring Warner Bros. Discovery before that spinoff happens, hoping to scoop up the cable and streaming businesses in their entirety. Unlike other entertainment giants that are jettisoning their cable networks, Paramount is doubling down on traditional TV, which is still a major profit center.

Executives at Warner Bros. Discovery expect the streaming business to be attractive to a variety of buyers, including tech companies like Netflix, Amazon and Apple. Some analysts think that one or more of those companies could also jump in to bid on all of Warner Bros. Discovery because of Paramount’s interest.

Some companies, though, have poured cold water on the prospect of a deal, particularly given the challenges facing the broadcast industry.

“We come from a deep heritage of being builders rather than buyers,” Netflix’s co-chief executive, Greg Peters, said at a Bloomberg conference this month. “One should have a reasonable amount of skepticism around big media mergers. They don’t have an amazing track record over time.”

The decision by David Zaslav, Warner Bros. Discovery chief executive, to sell or spin off parts of the company is a remarkable about-face from his initial pitch to Wall Street. When Warner Bros. Discovery was created three years ago, Mr. Zaslav sold investors on the combined power of the merged company to compete with streaming giants like Netflix. Other mergers have followed similar logic, including Disney’s acquisition of 21st Century Fox.

This is a developing story. Please check back for updates.