Warner Bros. Discovery Hinting At More Mergers And Acquisitions Through Interviews

Warner Bros. Discovery, just over two years after closing the merger of WarnerMedia and Discovery, will be “opportunistic” about seeking M&A deals in the next two or three years, president and CEO David Zaslav said.

“I think some companies will be for sale,” Zaslav said, speaking Thursday at the Bernstein 40th Annual Strategic Decisions Conference in New York. “We can be opportunistic but we’re going to be very disciplined.”

“I think there’s likely going to be some consolidation. There are a lot of players. There are a lot of players that are losing a lot of money,” Zaslav said. “One of the reasons why we really fought to drive our free cash flow and pay down our debt is to be in a position — as we roll out globally, as we fight to build our business — that we’re a healthy company.”

Speaking of losing money, Warner Bros. Discovery reported full-year 2023 revenue of $41.3 billion, down 4% on a pro-forma basis, and a net loss of $3.13 billion (versus a net loss of $5.36 billion on a pro-forma basis in 2022). The media conglomerate during the first quarter of 2024 repaid $1.1 billion of debt to end the quarter with $43.2 billion of gross debt.

“Over the next two to three years, I expect that there’s going to be some opportunities,” Zaslav said. “There’ll be some players that want to get out of the business, that will look to consolidate their streaming businesses with others. And so I think we will look to be opportunistic during that time,” he said, adding that he believes there will be 4-5 dominant global streaming platforms as things shake out.

“The global nature of this business is going to require a number of players to decide whether they want to go it alone,” according to Zaslav. He said “consolidation can happen in a lot of different ways,” including through bundling — such as WBD and Disney’s forthcoming Disney+/Hulu/Max bundle — and he also suggested “over the long term some of the smaller players in streaming will end up wanting to be part of a bigger global organization.”

Regarding Paramount Global — which has been in talks about a potential sale to Skydance Media and has been reviewing a joint bid from Sony Pictures-Apollo — Zaslav didn’t address WBD’s recent interest in exploring a merger with the company, but he commented in a lightning-round Q&A about Paramount, “Great storytelling heritage.” Zaslav met briefly late last year with Paramount’s then-CEO Bob Bakish to size up a potential merger but those talks didn’t continue.

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