Warner Bros on the verge of being sold!
Warner Bros Selling: We all have seen the magical world of ‘Harry Potter’, the thrill of ‘Matrix’ and the unmatched action of ‘The Dark Knight’ on the big screen. The company making all these blockbuster films is Warner Bros. Discovery (WBD), one of the oldest and most respected names in Hollywood. But now, this Hollywood company is standing on the verge of being sold. The company itself has confirmed that it has received ‘unsolicited’ purchase offers from many big companies and it is now considering its future strategies.
Why did the empire of the King of Hollywood break?
This crisis faced Warner Brothers when the entire global media industry is going through a major change. There are two major reasons for this crisis, which has shaken the foundation of WBD.
- Growing dominance of streaming services: Companies like Netflix and Disney+ have changed the way of entertainment. People are now abandoning cable TV and moving towards streaming, due to which the earnings of traditional TV networks (like CNN, TNT and TBS) are falling rapidly. WBD’s own streaming services—HBO Max and Discovery+—also lag behind the market leaders.
- Heavy financial burden: The company currently has a debt of more than 40 billion dollars (40 Billion USD). The company’s CEO David Zaslav had already indicated that in the current market environment, reducing such a huge debt and simplifying its business was the only way forward.
Due to this pressure, WBD has planned to divide its business into two separate companies by 2026. One company will handle the studio and streaming, and the other will handle the network and news segments. Investors believe that this split will bring out the real value of the company, which will make the selling process easier.
Who wants to buy Warner Bros. Company?
Warner Bros. has a library of more than 6,000 films dating back to 1923, including iconic franchises like the ‘DC Universe’ (Batman, Superman), ‘Harry Potter’ and ‘Game of Thrones’. Many big companies of the world are in the race to buy this ‘treasure of content’:
- Apple: If Apple makes this deal, its Apple TV+ streaming platform will immediately get the most premium content from Hollywood. This deal will bring Apple into direct competition with Netflix and Amazon Prime Video.
- Netflix: For Netflix, buying this studio would mean gaining complete control over the content. Currently it is dependent on external studios to create content, but after purchasing WBD it will become the content king.
- Comcast (NBC Universal): The deal gives Comcast access to a massive film library and Hollywood’s best creative teams.
However, according to reports, Paramount-Skydance has prepared a bid of around $22 to $24 per share and is currently leading in this race.
Rise in shares, money doubles in 6 months
Usually, when news of a company being sold comes, its shares fall, but the opposite has happened with WBD. Amidst the news of the sale, there has been a tremendous rise in the company’s shares. In the last 6 months alone, the stock has registered a growth of 163%. Analysts believe that if WBD is sold in parts or merged with a big tech company, its real ‘value’ will be unlocked. Some analysts are predicting a further growth of 20-25% in the stock by 2026.
Indian audience will also be affected
In India too, we all watch WBD content (like DC movies, HBO series), which is available on platforms like JioCinema, Amazon Prime Video and Zee5. If WBD is acquired by a global tech company, it will directly impact the Indian audience. If Apple buys this studio, it is possible that it will flood Hollywood content on Apple TV + in India and make major changes in its subscription model. If Netflix makes this deal, there will be a major change in its content strategy, which may affect the availability and prices of content in the Indian market.