Netflix would be 'killing three birds with one stone' by buying Warner Brothers Discovery, BofA says | Fortune

"The global media industry is standing at the precipice of a "historic transformation," with Warner Bros. Discovery (WBD) positioned directly at the "epicenter" of a significant shift in asset valuation and competitive strategy, according to Bank of America (BofA) Global Research. With WBD the focus of intense consolidation efforts, attracting bids from at least three key players: Paramount Skydance (PSKY), Netflix (NFLX), and Comcast (CMCSA), BofA sees nothing less than "industry realignment" as the result of the bidding war."

"While there are multiple scenarios for WBD's future, including a whole-company acquisition by PSKY or a structural engineering combination by CMCSA, BofA highlights the unique strategic leverage afforded to Netflix. The report asserts an acquisition by Netflix could potentially be "killing three birds with one stone," with WBD the latest must-have asset in the competition once known as "the streaming wars.""

"The intense interest in WBD stems largely from the scarcity premium commanded by its primary asset: the Warner Bros. Studio. WBD's intellectual property (IP) library, ranging from Harry Potter to DC Comics to Game of Thrones, makes the studio a "crown jewel" asset, BofA said, with one of-if not the most valuable-content libraries in the world. BofA analysts, led by senior media and entertainment analyst Jessica Reif Ehrlich, estimated the takeout value of the consolidated WBD at approximately $30 per share."

Bank of America Global Research sees Warner Bros. Discovery at the epicenter of a historic transformation and predicts industry realignment driven by consolidation. Multiple bidders — Paramount Skydance, Netflix, and Comcast — are pursuing WBD, creating competing acquisition scenarios including a full takeout or structural combination. Netflix is uniquely positioned to target WBD's Studio and Streaming assets in a deal potentially exceeding $70 billion, representing a strategic shift toward buying established franchise moats. Warner Bros. Studio's scarce IP library, including Harry Potter, DC Comics, and Game of Thrones, commands a scarcity premium and underpins an estimated takeout value near $30 per share.

Read at Fortune