In a significant development within the media industry, a former top Walt Disney Co. strategist has weighed in on the fierce takeover battle for Warner Bros. Discovery Inc., predicting a victory for Paramount Skydance Corp.
Mayer's Bold Prediction on Bloomberg TV
Kevin Mayer, the former chief strategy officer at Disney who oversaw major acquisitions like Marvel and Lucasfilm, stated on Bloomberg TV that he expects Paramount to emerge victorious. "I think they will come back with a higher bid. Shareholders haven't spoken yet. I think the likelihood is Warner Bros. ends up with Paramount," Mayer said during his Friday appearance.
Mayer highlighted the financial backing behind Paramount's offer, noting the involvement of the Ellison family, founders of Oracle Corp., and the investment firm RedBird Capital Partners. "The Ellisons are smart and aggressive. Don't count out RedBird," he advised viewers.
The Competing Offers and Investor Pressure
The corporate drama escalated this month when Warner Bros. agreed to sell its streaming and studio assets to streaming giant Netflix Inc. However, Paramount has launched a competing, hostile tender offer of US$30 per share for the entire company. This bid is set to expire on January 8.
Adding pressure for a sweeter deal, several prominent Warner Bros. investors have publicly stated they want to see Paramount increase its offer. Notable voices include investment veterans Mario Gabelli and Harris Associates. Their support for a higher bid aligns with Mayer's prediction that Paramount will return to the table with improved terms to win over shareholders.
Industry Consolidation: Pain for Jobs, Gain for Hollywood?
Addressing the broader implications, Mayer acknowledged that a merger between Warner Bros. and either Netflix or Paramount would likely lead to job losses in the short term as operations are consolidated. Despite this immediate pain, he argued that the long-term health of Hollywood would benefit from creating a stronger, more financially viable entity.
"It is better to have fewer competitors that are financially viable that can buy more product and support a high production value than have one more buyer, Warner Bros. independently, in a weaker financial position," Mayer explained. His perspective is informed by his tenure at Disney, where he supervised transformative acquisitions, and his current role as co-founder of Candle Media, which owns production companies like Moonbug Entertainment and Reese Witherspoon's Hello Sunshine.
The outcome of this bidding war, set to unfold in early January, will significantly reshape the competitive landscape of the global entertainment industry, determining the future of one of its most storied studios.
