A MESSAGE FROM INSTAGRAM

On Wednesday evening, before flying back to New York to assess the new round of offers for Warner Bros. Discovery, David Zaslav hosted a party for the Hollywood A-list at the old Woodland estate, formerly the home of Robert Evans, that he purchased in those halcyon days during his WarnerMedia courtship. Back then, Zaz was preparing for his takeover of the town with private conclaves, tête à têtes, and various legacy media interview sessions. Those were the days, of course, before the synergies and the bad press, before balance sheets became insurmountable and “debt servicing” became the strategy. (Disclosure: As a result of our recent acquisition of Air Mail, Zaz has become a de minimis investor in Puck.)

In conversations there and elsewhere in recent days, Zaz has seemed humbled by the prospect of an impending sale, which is likely to bring an end to his brief dalliance with Hollywood moguldom. He has described it to associates as “bittersweet.” At the same time, he has projected a characteristic optimism about the options available to him in the current bidding war—and, of late, he has spoken bullishly about the interest from Netflix.

On Thursday, Zaz began reviewing the fourth formal offer from Skydance’s David Ellison for the entire company, for what I’m told is around $23.50 a share, as well as first-time offers from Comcast and Netflix for the Warner Bros. Studios and Streaming business. The universal expectation is that neither of these offers comes close to the $30-a-share high-water mark that Zaz and his mentor John Malone had suggested they could fetch in the market or through a split of the company.

Beyond that, there’s not much to go on. Executives at all three companies declined my entreaties, unsurprisingly, and their comms teams weren’t much more helpful. “I am closed for business on this matter,” Mel Zukerman, Ellison’s spirited chief communications officer, told me after the bids came in on Thursday afternoon. “Next topic!”

A MESSAGE FROM INSTAGRAM

Still, there is significant reason to believe that the dynamics have not fundamentally changed and that Skydance remains in pole position, Zaz’s optimism notwithstanding. Ellison’s $23.50-a-share offer already represents the highest M&A premium for a media deal in recent memory, and it contemplates the whole enchilada—saving God knows how much time, banker’s fees, and legal costs that would otherwise go toward a sale of one part of the company to Comcast or Netflix, followed by the spin of the cable assets into a separate public company. And, crucially, it faces the clearest path toward regulatory approval, as I explained last month. (And, no, Senator Elizabeth Warren’s facile protests on The Late Show aren’t going to change that).

Comcast’s Brian Roberts faces significant political pressure from Trump, of course, which may not be surmounted by a donation to the White House ballroom alone. But he has less financial leverage, too—less cash than the Ellisons and a stock that trades at a mere 5x multiple. Some analysts, like Rich Greenfield, have urged Roberts to be bold and seize this “once-in-a-generation opportunity,” but it’s hard to fathom an offer he could make that would prove more appealing to the White House and the WBD board, even if MS NOW has technically set off on its solo expedition.

The big unknown is Netflix, and whether Reed Hastings and Ted Sarandos are willing to reverse themselves on the theatrical question—a prerequisite for any deal—and confront the potential regulatory challenge. (As my partner Matt Belloni has noted, they’re certainly willing to extend some symbolic olive branches.) Netflix already has more than 300 million global subscribers, while Paramount+ and Peacock have just 80 million and 40 million, respectively. Reed and Ted, along with co-C.E.O. Greg Peters, have built Netflix into a $450 billion business while keeping it out of Trump’s crosshairs. Do they want to wade into that fight for Warners, especially given Reed’s longstanding support for Democratic causes? And do they want to do so by raising Ellison on an already high premium? CNBC’s Alex Sherman reported this week that Netflix is expected to be “disciplined” with its offer, which may not bode well for Zaz.

In any event, there’s a lot for Zaz and the WBD board to chew over during the Thanksgiving holiday. They are then likely to call for at least one more round of bids and then settle on a buyer before Christmas—unless, I suppose, the offers underwhelm and the board, which is filled with M&A jefes, makes the uncomfortable decision to pursue its spinoff plans, which sure seem secondary at this point. The truth, however, is that these potential acquirers are really sending signals to the market more than to Zaz. Sure, Netflix executives suggested that they were going to be disciplined. Did we expect the opposite? And the Ellisons, despite their inconceivable wealth, have been holding the line with their multiple bids—despite the reality that moving to the other side of $25 per share might materially alter the process.

During his short tenure in this town, Zaz always stuck out a bit for his New York energy. He had cut his teeth as a deal guy under Jack Welch and made his centimillions by cleverly combining subscale cable companies and cutting beneficial deals with distributors. His ability to navigate this current moment—inching bidders forward, making one side blink—is imbued with a slight tinge of irony. The qualities that made him stand out could ensure his legacy and Hollywood ending.