There has been a lot of speculation over whether we will see more M&A activities from Warner Bros. Discovery once their mandatory freeze period post-merger expires. As the company finds itself on a better financial footing than immediately post-merger, and with an ambitious expansion plan underway for their tentpole streamer, Max, CEO David Zaslav is once again raising those M&A flags. Our industry insider, entertainment attorney Brandon Blake from Blake & Wang P.A., shares the news.
Post-Merger Financial Improvements
When Discovery first took the helm of Warner Media, there was significant debt tied to the deal- at one point, in the $50B range. Today, about $15B of that has been paid down, with a stronger free cash flow and better performance from their flagship streamer, Max. Part of the reason for this financial cleanup, according to Zaslav, is to leave the company better positioned to take advantage of any potential M&A deals that may cross their path.
After all, many industry experts are predicting that we will eventually end up with 5 or fewer globally relevant streamers, so most of the market is expecting some M&A shake ups in the near future. However, as Paramount’s recent woes have showcased all too well, that’s sometimes easier planned then carried out. Zaslav, at least, seems confident that WBD will have a prominent role in that consolidation- as the buyer, not the merged company.
Does the Stock Market Agree?
One key hurdle WBD would need to clear, however, is a lackluster share price that is less convinced that WBD has what it takes to truly compete with industry giants like Disney and Netflix. No doubt, the company’s ambitious global rollouts of its newly rebranded streaming platform are intended to address that lack of confidence.
For now, of course, no major deals are brewing other than that for Paramount Global itself. However, it will be interesting to see if this is more “big” talk from ever-positive Zaslav, or if we will see WBD take advantage of its exit from the merger-enforced buying freeze to better position itself globally as a competitive streaming platform.
