Warner Bros. Discovery has put up the ‘for sale’ sign. Now what?

Last week, Warner Bros. Discovery finally said publicly what everyone has been talking about for weeks: The media company is up for sale.

Although the news was hardly a surprise — Warner has been unofficially in play for some two months — the prospect of another blockbuster merger has rattled an entertainment industry that has seen a slow but steady drumbeat of consolidation in recent years.

Hollywood insiders still lament the effect of Walt Disney Co.’s acquisition of 21st Century Fox’s entertainment assets and what that has meant for theatrical output and the shrinking buyer’s market. Warner itself is the result of multiple sales and mergers.

More recently, of course, was the takeover of Paramount by tech scion David Ellison’s Skydance Media, a deal which only just closed in August.

The new owners wasted no time getting bigger. Soon after scooping up Paramount, the Ellison-backed media company went on a buying spree, locking down sports media rights and iconic cartoons like “South Park” and luring filmmakers away from competitors.

Now, its sights are on a much bigger target — Warner Bros., the iconic studio behind classics such as “Casablanca,” “Batman” and the “Harry Potter” movies.

As my colleague Meg James has reported, the expanding media company has already submitted multiple bids for its rival, but its offers have been rebuffed as too low. The Ellisons are interested in buying the entire operation, including its cable channels like HGTV, celebrity.land, TNT and Food Network.

That’s important, given that Warner is in the process of splitting itself into two companies and spinning off its basic cable channels and international operations. That planned separation is expected to finish in mid-2026, Warner said in its statement last week.

“Our decision to initiate this review underscores the Board’s commitment to considering all opportunities to determine the best value for our shareholders,” Samuel A. Di Piazza Jr., chair of the Warner Bros. Discovery board of directors, said in the statement. “We continue to believe that our planned separation to create two distinct, leading media companies will create compelling value. That said, we determined taking these actions to broaden our scope is in the best interest of shareholders.”

Precisely what course of action the board will decide on, and whether it is in the best interest of Hollywood, remains murky and clouded by the fact that Warner Bros. Discovery Chief Executive David Zaslav himself seems eager to stay in charge.

Warner’s statement leaves open several scenarios.

Zaslav suggested the company had more than one suitor, saying in the statement that Warner has received “interest from multiple parties,” which triggered the review of “strategic alternatives to identify the best path forward to unlock the full value of our assets.”

Cable company Comcast, which owns NBCUniversal, plans to weigh its options for the company, but no bid has yet emerged.

Streaming giant Netflix, which is rumored to be interested, seemed to downplay such speculation in its earnings call last week. In response to an analyst question, co-Chief Executive Ted Sarandos said the company looks at all potential opportunities for mergers and acquisitions, but that Netflix has been “very clear in the past that we have no interest in owning legacy media networks.”

Still, those remarks don’t completely shut the door on Warner’s studio and streaming service.

Many thought a Paramount-Warner marriage was a foregone conclusion when news broke earlier this month that the Ellisons made an initial bid of nearly $20 a share, which was later rejected by the Warner Bros. Discovery board.

After all, David Ellison’s father, Oracle Corp. co-founder and chairman Larry Ellison, who is the largest shareholder of Paramount, is worth $341 billion dollars, according to Forbes.

TD Cowen media analyst Doug Creutz wrote in a note to clients that a transaction with Paramount remains “reasonably likely” and expressed skepticism that other “more attractive bidders” would emerge.

Meanwhile, any potential deal is facing public pushback from the Writers Guild of America, which recently said combining Warner Bros. with Paramount or another major studio or streamer would “be a disaster for writers, for consumers and for competition.”

The union said it would work with regulators to block such a merger.

Adding to the uncertainty is the possibility that the Warner Bros. Discovery split could still happen, regardless of bids, if the board deems those offers not in the best interest of shareholders.

So about the only thing that’s clear at this moment is that there won’t be a resolution anytime soon.

Stuff We Wrote

Film shoots

Number of the week

Netflix’s third-quarter revenue jumped 17% to $11.5 billion, a feat powered by the success of the “KPop Demon Hunters” movie, the company reported last week.

As my colleague Wendy Lee reported, the animated movie hit has now birthed Netflix a licensing deal with toymakers Hasbro Inc. and Mattel Inc. for themed dolls, action figures, youth electronics and more. Talk about golden.

Finally …

I love visiting national parks, which is why this story about the Joshua Tree short-term rental market’s decline caught my eye. My colleague Alex Wigglesworth looks at how the pandemic-fueled boom in short-term rental listings changed the Joshua Tree area and what that boom has meant for locals.