November 20 will mark an important day in Warner Bros. Discovery's history. The day marks the deadline for interested parties to submit a non-binding bid for the company, in a process that is expected to close by December. Multiple different reports have come out as Wall Street and the entertainment industry keep a close eye on a sale with the power to significantly alter Hollywood's status quo.
Now, important pieces of information regarding the impending sale have come out. Variety published a report discussing the parties involved in the bidding process. Per the trade, WBD CEO David Zaslav, "wants the biggest crown that gives him the biggest portfolio." This makes sense, given the scale of the transaction.
The report also included a very interesting statement regarding Netflix. The trade said that a possible outcome of the sale is Netflix acquiring WBD with David Zaslav as the head of the studio, with Comcast getting HBO Max. Co-CEOs Ted Sarandos and Greg Peters are said to want this to happen. However, Netflix chairman Reed Hastings is reportedly reluctant to deal with regulation procedures that would stem from such a deal:
"Greg [Peters] and Ted [Sarandos] really want this, but Reed [Hastings] doesn't want to deal with the regulatory hassles."
This potential development would be a shocking outcome for Warner Bros., considering how HBO Max is such a pivotal part of the company. Netflix's reported interest in such a deal also comes as a surprise, given that out of all the potential buyers, Netflix has arguably been the most difficult to get a read on. Following the announcement that WBD was up for sale, both Peters and Sarandos seemed to indicate a lack of interest in Warner Bros.
Sarandos said during an after-market analyst call: "We're predominantly focused on growing organically, investing aggressively and responsibly into the growth and returning access cash flow to shareholders."
Later on, though, the streamer was reported to have hired the services of an investment bank to put together a bid for the company. Yet, shortly after that, a report from Variety mentioned that sources had claimed Netflix was not really interested in the company, and allegedly mainly wanted to raise WBD's price for David Ellison's Paramount Skydance.
According to Variety, Netflix is in a position to make a legitimate bid, which would most likely be all in stocks. But, despite the streamer's interest in Warner Bros. Discovery, its chances of actually acquiring it are in question. As reported by Variety, California Representative Darrell Issa sent a letter to Pam Bondi (US Attorney General), Gail Slater (assistant attorney general for the antitrust division of the Justice Department) and Andrew Ferguson (FTC chairman), detailing anti-trust concerns arising from a potential Netflix-WBD merger. The letter partially read:
"As you are aware, Netflix is already the dominant streaming platform in the United States and permitting it to absorb a major competitor raises antitrust concerns that could result in a harm to consumers. With more than 300 million global subscribers and a vast content library, Netflix currently wields unequaled market power. Adding both HBO Max's subscribers and Warner Bros.' premier content rights would further enhance this position, reportedly pushing the combined entity above a 30 percent share of the streaming market: a threshold traditionally viewed as presumptively problematic under antitrust law."
A clearer answer on the matter will likely come once the bids are sent in.