Warner Bros. Discovery puts itself up for sale, citing interest from ‘multiple’ suitors

By Brian Stelter, CNN
(CNN) — Warner Bros. Discovery, the parent of CNN, is contemplating a sale.
The media giant says it has received “multiple” expressions of interest from potential buyers, indicating that Paramount Skydance is not the only suitor for the media company.
In a Tuesday morning statement, WBD said its board of directors has started a “review of strategic alternatives,” which could result in a sale of the entire company, a continuation of the current plan to split the company into two, or some other outcome.
Paramount has been making overtures to buy all of WBD in advance of the planned split, signaling that a behind-the-scenes bidding war is underway. The WBD board rebuffed the first offer, two people with knowledge of the matter told CNN last week. One of the sources said both sides recognized it was a “lowball” proposal by Paramount’s new CEO, David Ellison.
Paramount has declined to comment on its interest in WBD, but Ellison has kept up the pressure in recent days, the sources said.
Warner Bros. Discovery CEO David Zaslav has been preparing to split the company into two publicly traded halves, believing Warner Bros. (which would house the HBO Max streaming service and the movie studio) and Discovery Global (which would house CNN and other cable channels) will be much more highly valued that way.
WBD may still decide to complete the planned split, but Tuesday’s announcement suggests that other outcomes may be more likely.
Comcast is one of the other media industry heavyweights that is evaluating WBD’s assets, given Warner’s openness to a deal, two people with knowledge of the matter said. A Comcast spokesperson declined to comment.
Wall Street analysts have asserted that both Comcast and Netflix could be interested in the streaming and studios half of WBD, given the iconic brands and shows that the company controls.
Rather than kicking the proverbial tires next year, after the breakup would take effect, suitors are likely to conduct due diligence and consider a bid now, since WBD has said it is open to offers.
“It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market,” Zaslav said in a statement. “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.”
Zaslav told employees in a separate memo that “evaluating potential interest, conducting due diligence, and assessing next steps will take time, likely over a period of weeks and months.” He said “there’s no set timeline for final decisions.”
Zaslav outlined several possibilities: The already-planned split, “a transaction involving the entire company,” “separate transactions for Warner Bros. and/or Discovery Global,” or “an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to our shareholders.”
Shares in WBD spiked more than 11% in midday trading Tuesday.
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