A Paramount bid for Warner Bros. Discovery could ignite a bidding war, analysts say

By Brian Stelter, CNN

(CNN) — Long-gestating speculation about a sale of Warner Bros. Discovery burst out into public view on Thursday after the Wall Street Journal reported that Paramount’s new owners are preparing a bid for the rival media company.

Analysts told CNN that the potential offer from Paramount is likely the beginning of a bidding war for Warner Bros. Discovery, known as WBD. They cautioned that any actual deal would be a protracted, complicated affair.

Shares of WBD, CNN’s parent, surged 29% to close at a three-year high. WBD’s stock has now almost fully rebounded to the level the company started when it was formed through a merger in 2022.

Shares in Paramount soared more than 15% in a further reflection of investor enthusiasm about the beleaguered media giants.

“The only surprise is the timing,” Bank of America Securities senior media and entertainment analyst Jessica Reif Ehrlich said. “It’s obvious the media industry needs to consolidate.”

If Paramount is making an actual bid for WBD, “they’re not the only ones who are going to be bidding, in our view,” she added.

Warner Bros. Discovery has been preparing to split itself into two in early 2026, a move that Wall Street analysts viewed as a precursor to further deal activity in the media industry.

But Paramount wants to make an offer for the whole company, in advance of the planned split, according to the Journal, which cited anonymous sources.

Comcast, Amazon and Netflix have been named as other potential bidders for all or part of WBD.

Earlier on Thursday, analysts at Wells Fargo called the streaming service and movie studio side of the WBD house “an attractive M&A candidate” and asserted that Netflix “is the most compelling buyer.”

Paramount’s apparent interest is no surprise since the company’s ambitious new CEO, David Ellison, has talked about a desire to strike further deals.

Ellison, son of Oracle billionaire Larry Ellison, headed up the much smaller Skydance Media, and spearheaded the recent takeover of Paramount’s TV and movie studio assets.

Having worked hard behind the scenes to win Trump administration approval for the deal, Ellison has spent recent weeks setting the merged Paramount Skydance on a new, digitally native path.

John Malone, chair emeritus of WBD’s board and a longtime mentor to WBD CEO David Zaslav, said during a recent book tour that he has conferred with Ellison about “further consolidation in the media industry.”

Malone told The New York Times that he met with Ellison on the sidelines of an annual conference of media and tech moguls in Sun Valley, Idaho, last summer.

Of Ellison, Malone said he would “bet on that guy.”

Representatives for the two companies declined to comment on the Journal’s account of an expected bid.

WBD, meanwhile, is continuing to prepare for its corporate breakup. CNN and other TV networks will be part of “Discovery Global,” while HBO, HBO Max, the Warner Bros. studio and other assets will be part of “Warner Bros.”

At an investor conference earlier this week, Zaslav said that “everything’s on track” for the split.

Zaslav has spoken repeatedly about the need for consolidation in the industry, and some observers have speculated that the two halves of WBD, once split in 2026, would seek to be buyers, rather than sellers.

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