Could Apple Acquire Warner Bros. Discovery?
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A recent Bloomberg report suggests Apple may be eyeing Warner Bros. Discovery — a move that could give Apple TV access to one of the largest film and television libraries in Hollywood.
This week, Bloomberg’s Lucas Shaw reported that the media conglomerate, which officially went up on the auction block earlier this week, has been courting potential suitors for some time — and Apple is among those that have “expressed interest.”
While Apple has deep enough pockets to acquire Warner Bros. Discovery outright if it really wanted to, it’s likely more interested in only the piece of the pie that would bolster its Apple TV streaming service: the entertainment giant’s massive film and TV catalog.
For one thing, Warner Bros. Discovery is the custodian of HBO Max, a prestigious streaming service that’s often been compared to Apple TV for its long history of producing compelling original shows, from The Sopranos to Succession. HBO’s content strategy would likely be a good fit for Apple.
Warner Bros. has a portfolio of thousands of other TV shows and films that go well beyond HBO. Castle Rock Entertainment, New Line Cinema, and Alloy Entertainment are all Warner Bros. labels, and it’s also become one of Apple’s premier partners for its own original content. For example, it was one of the studios behind Ted Lasso and the distributor of F1 The Movie.
Breaking up the Band
Warner Bros. Discovery is a sprawling media empire, with holdings that extend far beyond film and TV production. It also owns entire television networks, including CNN, the Discovery Channel, Cartoon Network, HGTV, and Food Network, plus DC Studios and DC Comics, and even a gaming division — and those are just the biggest household names that fall under the Warner Bros. umbrella. The full list is staggering; an SEC document shows well over 200 subsidiaries.
Warner Bros. Discovery announced in June that it was planning to split its cable networks and streaming/studio businesses. However, Paramount Skydance swooped in last month to try to acquire the entire conglomerate wholesale, The New York Times reported this week. Those talks began in mid-September, well before any of the dealings were made public, but Paramount failed to make an appealing offer, even after three attempts to up the ante.
The Times reports that all of Paramount’s initial bids were rejected for being too low, even after the company repeatedly sweetened its offers. Most recently, it raised its cash portion to 80 percent and boosted its reverse breakup fee — the amount it would pay shareholders if the deal collapses — to $2.1 billion.
However, it seems that Warner Bros. Discovery’s board has grown weary of Paramount’s repeated offers, especially in the face of the attention it’s been getting from other suitors. On Tuesday, it announced that it was strategically reviewing its options after multiple parties expressed interest in acquiring the studios and streaming business.
Those include all the usual suspects: Netflix, Amazon, Comcast, and Apple, though so far Warner Bros. CEO David Zaslav has only said these companies have “expressed interest,” according to Shaw. Netflix and Comcast were seemingly among the first, focusing on film and TV libraries and production assets. Amazon’s and Apple’s interests are slightly less clear, but would likely be similar.
Sources who spoke to Bloomberg say that while Netflix co-CEO Ted Sarandos is keen on acquiring Warner Bros. studio, content library, and film production lot, he has no interest in the TV networks. Comcast may be in a similar spot; it’s already planning to spin off MSNBC and CNBC later this year, and likely has no interest in picking up any more.
That brings us back to Apple — the X-factor in this bidding war. It could easily afford such an acquisition, but it’s also repeatedly shunned the idea. Last week, Apple’s services chief Eddy Cue was a guest on The Town podcast, where host Matthew Belloni asked him pointedly if Apple was going to buy Warner Bros. Cue responded that he “would be surprised,” but added that while he won’t rule anything out, it’s “not our approach”:
I never say no to anything, but we’re not actively looking at buying any company of any size. We like building things ourselves.
Eddy Cue, Apple Senior Vice President of Services
Of course, Apple has a long history of dismissing things as bad ideas — until they’re not. Those are mostly hardware concepts, like an iPod with video playback or a stylus for the iPad, but there’s no reason the same logic can’t apply to services. Cue says Apple is “happy with where [Apple’s] position is” and how it’s growing, so a big acquisition certainly isn’t a priority, but it also makes sense that Apple is at least kicking the tires on the idea. Whether its playbook ever extends to Hollywood’s biggest studio remains to be seen.
