Kevin Mayer Shares Positive Insights on Warner Bros. Discovery Amid Paramount-Netflix Bidding Conflict

Candle Media’s Kevin Mayer Anticipates Increased Offer from Ellisons for Warner Bros. Discovery

Kevin Mayer, former Disney executive and current leader at Candle Media, has indicated that the Ellison family may raise their hostile bid for Warner Bros. Discovery (WBD) as they seek to attract shareholders disillusioned with Netflix.

Speaking at the UBS media conference, Mayer emphasized that the situation looks promising for WBD. “There’s nothing but good news here,” he remarked, predicting a potential increase in the bid by an additional five to ten billion dollars.

Paramount has made six prior offers for WBD, the latest being $30 per share in cash, which equates to an enterprise value of $108 billion. However, these bids have all been rejected, particularly after WBD’s CEO, David Zaslav, brokered a deal with Netflix valued at $27.75 in cash and stock—an enterprise value of $82.7 billion. Recently, Paramount has escalated its tactics by presenting a hostile tender offer directly to shareholders. WBD is currently evaluating this proposal.

Mayer contended that simply revisiting the same offer presented to management may not suffice. “It’s just a first step,” he noted, anticipating “fireworks” in the negotiation process.

Having previously collaborated with Disney CEO Bob Iger on the 2019 acquisition of 21st Century Fox, Mayer is well-versed in the complexities of such deals. He recounted that Disney secured a preliminary agreement with Rupert Murdoch at $28 per share before Comcast intervened with an offer of $35. He underscored that boards are required to consider all offers, particularly those that are higher, until a deal is finalized. Ultimately, Disney raised its bid to $38 per share and successfully acquired Fox, although Mayer pointed out that this process inflated the total price by $19 billion.

“I think that points to where we might see this going,” Mayer said during a question-and-answer session conducted via video.

In Mayer’s view, both Paramount and Netflix have compelling reasons to pursue the acquisition, particularly as the media landscape evolves. He raised the question of how regulators might define streaming in relation to this deal. By adding HBO Max, Netflix would further solidify its dominant position—a point emphasized by David Ellison and noted even by former President Donald Trump.

Mayer opined that Netflix’s primary interest in Warner may center around its intellectual property rather than HBO Max itself. “For Netflix — and I could be wrong about this — I think it’s less about HBO Max and more about Warner Bros. the studio,” he said, suggesting that Netflix could potentially concede on streaming regulations to facilitate the acquisition. “If there are antitrust issues … with respect to HBO Max and the streaming, what would they be willing to give up in order to close this?”

When assessing the competing offers, he found them “roughly equal,” depending on how one values the cable networks that WBD would potentially spin off to shareholders with a Netflix arrangement.