Warner Bros. Discovery Explores Strategic Options Amid Acquisition Interest

Warner Bros. Discovery (WBD) has initiated a strategic review to explore options for maximizing shareholder value, following unsolicited acquisition interest from multiple parties, including Paramount Skydance.

On October 21, 2025, WBD's Board of Directors announced the commencement of this review, considering alternatives such as completing the planned separation into two distinct media companies by mid-2026, pursuing a transaction for the entire company, or considering separate transactions for its Warner Bros. and/or Discovery Global businesses. Additionally, the company will consider an alternative separation structure that would enable a merger of Warner Bros. and a spin-off of Discovery Global to shareholders.

David Zaslav, President and CEO of WBD, stated, "We continue to make important strides to position our business to succeed in today's evolving media landscape by advancing our strategic initiatives, returning our studios to industry leadership, and scaling HBO Max globally."

Samuel A. Di Piazza, Jr., Chair of the WBD Board of Directors, added, "Our decision to initiate this review underscores the Board's commitment to considering all opportunities to determine the best value for our shareholders."

This announcement follows reports that Paramount Skydance, led by David Ellison, has made multiple acquisition attempts, with the latest offer reportedly being rejected by WBD. Paramount Skydance's proposed $35.6 billion acquisition of WBD aims to create a media giant with 203.4 million streaming subscribers, rivaling Disney and Netflix. Strategic goals include leveraging iconic franchises (Harry Potter, DC) and combining HBO Max's premium content with Paramount+'s sports to boost competitiveness in the $811 billion 2025 streaming market. Regulatory hurdles loom as the Department of Justice and Federal Trade Commission scrutinize antitrust risks, while political ties to Trump allies raise concerns over media bias and CNN's editorial independence. Financial challenges include $51.1 billion combined debt, pressure to cut costs, and potential divestitures of underperforming assets like cable networks.

As of October 27, 2025, WBD's stock price is $21.14, with an intraday high of $21.39 and a low of $20.89. The company faces significant financial challenges, including a net debt of $34 billion, mostly merger-related, and a downgraded credit rating by S&P Global to BB+ (junk status). Despite a potential valuation increase if split—where the TV arm could be worth $28 billion and the streaming/studio unit $56 billion—the heavy debt load poses a critical obstacle. The streaming and studio segment, in a separation scenario, would inherit a problematic debt ratio of five times its projected 2026 EBITDA, compromising its ability to invest in growth and compete effectively. Meanwhile, the company’s stock has plummeted from a high of $77 in 2021 to around $10.

WBD has undergone significant restructuring in recent years. In December 2024, the company announced a reorganization into two main divisions: Streaming & Studios and Global Linear Networks. This move was seen as a precursor to potentially larger strategic changes in the media landscape, reminiscent of Comcast's recent split. The reorganization aimed to delineate the company’s waning television networks from its burgeoning streaming services and film production divisions. The restructuring, advised by JPMorgan, Evercore, and Guggenheim Securities, triggered a 15% rise in WBD's stock price and could pave the way for future deals, especially with Zaslav hinting at consolidation in a deal-friendly political environment. The traditional television sector is struggling, and this strategic shift may unlock substantial value, potentially seeing WBD's enterprise value rise significantly. The company itself originated from a spin-merge with Warner Media, separated from AT&T in 2022, indicating a precedent for such restructuring.

The potential restructuring and acquisition attempts have significant implications for the media landscape. A successful acquisition by Paramount Skydance could lead to further consolidation in the industry, potentially reducing competition and diversity of content. Regulatory scrutiny is expected, focusing on antitrust concerns and the impact on consumer choice. Additionally, the involvement of political figures and potential biases in media coverage could influence public perception and trust in news outlets.

WBD's strategic review marks a pivotal moment for the company and the broader media industry. The outcomes of this process could reshape the competitive landscape, influence content diversity, and have significant financial implications for stakeholders.