The potential sale of Warner Bros. Discovery (WBD) is gaining momentum, with three major players actively formulating offers: Paramount Skydance, Netflix, and Comcast. A crucial deadline of November 20 has been set for submission of initial non-binding bids, as reported by Variety, corroborating earlier coverage by the Wall Street Journal.

Amid the bidding frenzy, Paramount Skydance refuted reports suggesting it was forming an investment consortium with sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi to pursue WBD. A company spokesperson labeled the information “categorically inaccurate” and emphasized the confidentiality of the process. Previous rumors had claimed the Ellison family was considering a $71 billion bid involving the Public Investment Fund (PIF), Qatar Investment Authority (QIA), and Abu Dhabi Investment Authority (ADIA).

WBD’s board, having previously rejected a $23.50 per share offer from David Ellison, plans to convene before Thanksgiving to assess incoming bids, aiming for a year-end conclusion. One alternative under consideration involves splitting WBD into two entities: Warner Bros., led by David Zaslav, and Discovery Global, managed by CFO Gunnar Wiedenfels. Analysts estimate that a standalone Warner Bros. could have an enterprise value of $44 billion and an equity value of $37 billion, potentially exceeding the valuation of the integrated company.

Each bidder presents unique strategies. David Ellison, through Paramount Skydance, argues that a merger would create a scaled-up powerhouse to compete against Disney and Netflix, while anticipating potential regulatory hurdles. The Ellison family, including Larry Ellison, backs the bid, with RedBird Capital as a partner. Antitrust concerns are acknowledged, though Ellison asserts the deal would enhance market competition.

Netflix, traditionally a build-over-buy company, sees WBD’s film and TV library, production capabilities, and HBO Max as too valuable to ignore. With a market capitalization of over $470 billion and $9.3 billion in cash, Netflix could submit an all-stock offer. However, antitrust scrutiny looms, highlighted by Rep. Darrell Issa raising concerns about Netflix’s “unequaled market power.” The company must also reconcile Warner Bros.’ theatrical slate with its historically anti-theatrical approach.

Comcast, amid a corporate split of its Versant cable operations, sees potential synergy by combining HBO Max with Peacock and integrating Warner Bros. studios into Universal. Unlike Ellison, Comcast is not pursuing WBD’s cable networks, such as CNN, TNT, HGTV, and Food Network. Challenges include its stock trading near a 14-year low, limiting competitive leverage against Netflix and Ellison, as well as potential political headwinds stemming from Donald Trump’s criticism of NBCUniversal coverage.

Other potential scenarios include fragmented acquisitions, such as Netflix acquiring Warner Bros. studios and Comcast purchasing HBO Max, though these options present logistical and regulatory hurdles. Industry insiders suggest that David Zaslav and WBD’s board may be leveraging competing bids to maximize shareholder value, aiming for the highest possible sale price.