These are the facts of corporate existence. You release a few products that don’t perform too well, or rumors swirl of problems, then that’s blood in the water and the sharks start to circle. This happens at a time when your share-price feels undervalued compared to where it should be, and you have had expenses that are too high for too long, then you don’t have capital to hand to defend yourselves. Circling sharks move in for the kill as you find yourself a takeover target. Is this where Warner Bros. are now?
The Hollywood Reporter ran a big cover story about Warner Bros. Discovery CEO David Zaslav’s handling of its DC Films division, and the search for new leadership for their most valuable IP.
This inevitably talked about the future direction and plans for the studio and it talked to a current conversation that is live in Hollywood right now.
The “Big 5” (Paramount, Universal, Warner Bros, Disney, Fox) has already become a gang of four after the Disney acquisition of Fox, with MGM and Sony vying for a slot in the club. Yet in Hollywood, among the suits and the financiers, another major studio merger is seen as being inevitable. Amazon snapped up MGM. This leaves Sony as the only major studio without a streaming channel in it’s own tent. However it is not Sony that is seen as the wounded prey.
The rumor is that Comcast’s Brian Roberts will make a move and try and combine NBCUniversal and Warner Bros. Discovery. Due to the Warner Bros. Discovery deal only recently concluded no talks can even happen until April 2024, then there would be anti-trust issues to deal with due to the size of the merger. However if Disney and Fox can be allowed to join, then there is no reason why this would be stopped. The prize? That dirty streaming lucre! As one Executive was quoted as saying:
“Obviously Peacock sucks. There are some good synergies. I’m sure [Roberts] is licking his chops because the [WBD] stock is so low. And I think that’s Zaslav’s endgame. Get the place sold.”
Rampant cost-cutting usually results in analysts starting to like a stock again and the price rises while it saves defence capital. If that’s not happening as Zaslav gets his knife out again and again, then selling up may be the plan as the offer would surely be generous to those fully linked into the corporate structure, and major shareholders.
Maybe this is why executives are not seemingly keen to jump in and take ownership of the mess that is DC?
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