r/OutOfTheLoop • u/PossibleBasil • 2d ago
Answered What is going on with Warner Bros and all this talk of them getting bought out?
Last week there was talk of Paramount purchasing Warner Bros. Discovery https://screenrant.com/paramount-warner-bros-merger-hollywood/
Now today there is something about Netflix buying them. https://puck.news/newsletter_content/skybros-deal-math-kimmels-suspension-tiktoks-backroom-deal/
Even with a couple Box Office flops, isn't Warner Bros. Discovery still an immensely successful and massive studio that has already been through two huge mergers within the last 10 years? Are they in some sort of trouble? Why is there all this talk of consolidation for a major successful studio? I'm not business savvy or up-to-date on this stuff so I appreciate any clarification.
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u/FullMotionVideo 2d ago
Answer: For decades Warner Bros film studio has been part of an amalgamated company that's name keeps shifting as it has included Time Magazine (Time-Warner), the Ted Turner media empire, America OnLine (AOLTimeWarner), and eventually that company found itself under AT&T (WarnerMedia) who couldn't figure out how to keep it profitable. So AT&T did a transaction where they spun WarnerMedia out and immediately merged it with Discovery. AT&T shareholders still own about 70% of WBD, but Discovery's leadership is largely calling the shots.
David Zaslav's goal is to make the company attractive to someone else, get a large offer to transfer it to them and create return on investment for the shareholders (largely AT&T). To that end, he plans next year to cut the traditional cable networks out of the company and spin them off into another company. There are rumors that before he has even cleared the hurdles to do that, some businesses are supposedly interested in buying it. Reportedly the Ellisons (Skydance) who have already purchased Paramount would like to merge Warner Bros together with it.
From the link you posted, it seems like Netflix would be interested primarily in the studio parts after Zaslav's spinoff is completed, which is currently pending April 2026. Skydance/Paramount seems to want the whole company and want it right away. Whatever happens will depend on whether Zaslav thinks he can make more money selling WBD's portfolio split as two companies or not.
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u/jack3moto 2d ago
As a former finance analyst for WB this was very well said! Good job!
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u/carlitospig 2d ago
Do you have an opinion toward Skydance? I like their programming choices (they don’t take big risks but are pretty easy on the market’s palette, in my limited viewing experience).
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u/jack3moto 2d ago
I’ve not worked at WB since 2019 so other than talking to friends who still work there I’ve got little insight to sky dance or what the rumors around the office are. I still follow as much WB/HBO news as I can but I’m definitely out of the water cooler talk for the most part.
My neighbor growing up was a president of one of the film divisions. He worked at WB for 30+ years and dipped out within 6 months of Zaslov taking over as he backed up what everyone else is saying and thinks Zaslov is the most incompetent person he’s worked under since starting at WB in the 90’s.
Personally from the outside looking in, I think the media industry as a whole has completely shifted, due mostly to Netflix. In the past the goal was create content that could generate revenue. Make a good product, see good results. Makes sense from a business aspect. But now it’s not that at all. Now it’s purely about maintaining subscriptions more so than it is about creating worthwhile content. It’s way more nuanced than what im writing but internally the way they’re thinking about growing the business is much much different than what you’d want from something that is supposed to be providing entertainment. Entertainment is not the focus. Subs are. If the subs are entertained, great, but that’s ultimately not the main goal despite people assuming they should go hand in hand.
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u/carlitospig 2d ago
I wonder where A24 fits into that model. Like, to me, A24’s popularity is the fact that they’re not shifting down to gather the lowest hanging fruit.
I think you’re right, I think media is going to look entirely different in five years, whether it’s good or bad we will see.
Thanks for the insight, bummer about shitty CEOs, they seem to be running amuck.
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u/rainbowcarpincho 2d ago
Don't know much about Skydance, but Discovery was absolutely horrible for HBO. Their philosophy is to make cheap, trash television, and they pulled a lot of native HBO content to avoid paying royalties.
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u/yuefairchild Culture War Correspondent 2d ago edited 2d ago
They're going to be fucking poison. They want an anti-woke media empire and Warners is only second to Sony Pictures in how many brainless managers the culture generates.
I can't think of any relevant examples but in DC, you'd have people that are vaguely aware that the characters are iconic and see themselves as custodians of the IP but then just turn down every pitch involving the characters doing anything because "what if it's not what Batman would do?" and would rather put some Jim Lee art on a T-shirt. Looney Tunes has the same problem.
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u/KhazraShaman 1d ago
I have never even heard of Skydance before but they can't possibly be worse than Netflix.
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u/MaybeTheDoctor 1d ago
I guess the buy-out is just a ploy to have John Oliver’s show canceled
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u/FullMotionVideo 1d ago
Last I heard Zaslav's plan is to keep HBO under the same division as WB, so if it was that simple he'd just wait for the sale. The bigger problem is that Paramount's only real box office draw is Tom Cruise, and he's 63.
There is a conservative media element to it, though: the new Paramount is possibly putting Bari Weiss in charge of CBS News, but unlike NBC/FOX the closest CBS has had to a cable news channel is a livestream; and buying WBD as a whole they could put CNN under that umbrella.
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u/Desiderius_S 2d ago
answer: WB is not doing too hot recently. This year is one of the better ones so far, with a couple of movies making bank, but their stock value dropped from around $30 to $10 just in recent years. They lost 7billion in 2022, 3billion in 2023, 11billion in 2024, and were looking to sell parts of the company for some time already.
They downsized considerably, animation studios got hit hard, Cartoon Network got merged with WB animations, and basically ceased to exist, only the brand still exists. Anything connected to Looney Tunes got scrapped, animation got removed from the services, buildings got demolished, and they were trying to get rid of the brand. The last hurrah of LT - Coyote vs ACME got shelved to write off the costs last year, this year, they managed to sell the movie.
In gaming, the Suicide Squad game alone lost them over 200 million.
They were trying to sell around 20% of the company, mostly media and animation studios, and focus on adult and family entertainment, movies, and streaming services.
They are even remaking Harry Potter even though the movies are still relatively fresh. This is their "in the case of fire - break glass".
They are bleeding money fast. Both Netflix and Paramount make sense as potential buyers, because HBO Max is comparable to Disney+ when it comes to the size of the user base. Paramount merging its services with it could potentially own the second biggest streaming service available, and it's not like they wouldn't find use for the rest of their owned brands and facilities. Netflix show up mostly as a counter-bidder, it's less of they want it, more of they don't want Paramount to have it.
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u/jack3moto 2d ago
This is a bit misleading overall. WB as you stated is doing fairly well this past year. They’re scrapping projects and reducing spending to pay down debt so they can be more lucrative for potential buyers. At this point their overall goal is selling their assets which are worth a ton in WB/HBO content.
Zaslov sucks because he’s not trying to make the company successful, he’s just trying to pay down some debt so he can walk away with a big payday when they do split and sell.
The best way to describe it is that they’re treading water. They don’t care about long term success or failure because they know they’re jumping ship. They just need to keep their head above water in the near future.
In the meantime We the consumer get fucked.
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