As Warner Bros. Discovery puts itself up for sale, California’s Justice Department is blasting the idea of further consolidation in Hollywood.
When asked directly about the prospect of a potential sale of the media giant and whether it would sue to block it, a spokesperson for Attorney General Robert Bonta’s office told TheWrap it believes “further consolidation in markets that are central to American economic life — whether in the financial, airline, grocery or broadcasting and entertainment markets — does not serve the American economy, consumers or competition well.”
“We are committed to protecting consumers and California’s economy from consolidation we find unlawful,” the spokesperson added.
However, the agency stopped short of confirming any potential or ongoing investigations into M&A talks around Warner Bros. Discovery to “protect their integrity.”
A spokesperson for Warner Bros. Discovery declined to comment.
The California DOJ’s comments came after the Writers Guild of America slammed the idea of Warner Bros. Discovery merger with any studio or streamer last month, warning it would be a “disaster.”
“Merger after merger in the media industry has harmed workers, diminished competition and free speech, and wasted hundreds of billions of dollars better invested in organic growth. Combining Warner Bros. with Paramount or another major studio or streamer would be a disaster for writers, for consumers and for competition,” the guild said. “The WGAW and WGAE will work with regulators to block the merger.”
Thus far, Warner Bros. Discovery has received three separate takeover offers from Paramount Global, which reportedly ranged between $19 and $23.50 per share and were rejected for being too low.
Additionally, executives from Netflix and Comcast have both signaled their interest in looking at potential deals for the company’s studio and streaming assets, which are on track to split from Warner’s linear networks business in April. The former has reportedly tapped the investment bank Moelis & Co. to explore a potential bid.
In addition to continuing on with its planned split into Warner Bros. and Discovery Global, the company’s board will also consider separate transactions for those two companies or a deal for the entire combined company.
WBD also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
Warner Bros. Discovery is set to report its latest quarterly earnings before market open on Thursday. Shares are up 174% in the past year, 110% year to date and 167% in the past six months and 17% in the past month.
