^{Photo: Axios}

Market Reaction

Shares of Warner Bros. Discovery (WBD) surged 10% in morning trading Tuesday after the company revealed it is expanding its strategic review and is open to a potential sale. Investor enthusiasm reflects confidence that the firm’s portfolio, which includes HBO Max, Warner Bros. studios, and Discovery’s global networks, could command significant market value.

Strategic Review and Split Plans

Earlier this year, WBD announced a plan to divide into two distinct entities: one combining its studios and streaming operations, and the other overseeing global networks. The separation is still on track, but the company is now considering all strategic alternatives in light of “unsolicited interest” from multiple parties.

CEO David Zaslav emphasized that the company’s dual approach — advancing the planned split while reviewing acquisition offers — aims to unlock maximum value for shareholders. He highlighted efforts to return Warner Bros. studios to industry leadership, scale HBO Max internationally, and strategically position the company in a rapidly evolving media landscape.

Potential Buyers

Industry insiders indicate that Netflix and Comcast are among the parties exploring WBD’s assets. While Netflix reportedly is not aiming to acquire legacy media assets, it is monitoring developments to prevent WBD from being sold at a lower valuation. Comcast, though not actively pursuing a deal, is assessing the potential acquisition.

Previously, WBD had rejected several bids from Paramount and another higher unsolicited offer, signaling that management is seeking a deal that reflects the true strategic value of its content and distribution assets. Analysts note that buyers may prefer to acquire WBD’s studios and streaming units after the planned split, which offers tax advantages.

Financial Context

Since merging WarnerMedia and Discovery Inc. in 2022, WBD has been navigating significant financial pressure, carrying over $40 billion in debt. The company has responded with aggressive cost-cutting measures, content pipeline restructuring, and a focus on profitable franchises, including spinoffs from Harry Potter and Game of Thrones.

Despite these efforts, investor skepticism persists due to exposure to declining cable network revenues as audiences shift toward streaming services.

Looking Ahead

WBD’s expanded review underscores the company’s commitment to evaluating all options that could maximize shareholder value, whether through a sale, strategic partnership, or the planned corporate split. Analysts expect continued market attention as offers and negotiations develop, with the potential to reshape the competitive landscape for media and streaming companies.