On today’s episode of the Daily Variety podcast, University of Michigan Ross School of Business professor Eric Gordon breaks down the Warner Bros. Discovery sale spree as Warner Bros. Discovery shareholders prepare to vote on the company’s sale to Paramount Skydance.
Gordon, who studies mergers and acquisitions and used Warner Bros.’ Discovery as a case study in one of his classes, said the process was “unusual” for both WBD and Paramount Skydance. WBD shareholders will have the opportunity to vote in favor of the transaction on April 23rd. It’s been a long road for the company since rumors of a sale arose last summer. WBD initially sought to retain an aggressive suitor, one of many unconventional aspects of the deal.
“It’s unusual for a target to just say, ‘I’m not going to talk to you, go on a hike. I don’t want to hear it.'” They put their hands over their ears and are like, oh, oh, oh, ah, ah, ah. That’s pretty rare,” Gordon said. “We’re finally at a point where we have a legal obligation. It’s unusual for the pursuer, the acquirer, Paramount Skydance, to be so persistent. So you have to give credit to David Ellison, the guy who was turned down by a girl 23 times. And he asked her out the 24th time, and she said, ‘Okay, I’ll go out with you.'”
The jockeying for WBD, and the tug-of-war between Netflix and Paramount Skydance over the deal, reflects so many crosscurrents disrupting the traditional entertainment business. But fundamentally, companies like Warner Bros. and HBO, which are endowed with unique assets, offer a unique opportunity to acquire important showbiz real estate.
“This deal probably represents all of those big changes, even if it doesn’t really change the industry,” Gordon said.
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